Some of the most promising penny stocks are up-and-coming and just just getting started. The world of penny stocks is all about speculating which young firms have the potential to become the next big companies. The risk is well known. Penny stocks are volatile and the potential for losses is generally greater overall. But so too is the potential for gains. What’s interesting about the shares listed below is that most of them have recently proven their ability to provide quick returns. That will draw interest in June and could realistically lead to further gains. Further, all but one of the companies listed below trades on the Nasdaq. They, therefore, tend to be safer than their OTC counterparts.
Reunion Neuroscience (REUN)
Reunion Neuroscience (NASDAQ:REUN) is an exciting early-stage pharmaceutical firm developing therapeutics to address unmet mental needs. It’s exactly the type of firm one might expect to be full of promise: It’s inexpensive, biotech, and focused within the mental health space which is a burgeoning niche.
The Toronto-based firm’s lead candidate drug, RE104, is a psychedelic compound and the only drug of its type in development. It is being studied in relation to its efficacy as a treatment for postpartum depression providing rapid durable relief. RE104 received U.S. patent protection 14 months ago as well.
What’s interesting is that Reunion Neuroscience is being taken private by MPM BioImpact per an agreement reached on June 1. All REUN shareholders will be entitled to $1.12 per share from MPM BioImpact per that agreement which will be put to vote on July 12. The opportunity is simple: REUN shares now trade slightly below $1.12 and all indications are that the deal will pass. There’s currently a spread available to investors and it may get larger.
Kaixin Auto Holdings (KXIN)
Kaixin Auto Holdings (NASDAQ:KXIN) is a Chinese firm that provides unique insight into the EV and retail automotive sector of the country. The firm engages in two distinct automotive niches and like Reunion Biosciences above, is actively engaged in acquisition activity.
Before diving into that, let’s understand what the company does. Kaixin operates a premium used car and new car dealership network. China has a rapidly growing market for premium used vehicles and Kaixin operates online and in-person sales platforms. That’s one important aspect of the business.
The other is its EV business. Kaixin Auto is in the process of acquiring POCCO, an EV brand that has produced and sold tens of thousands of EVs in recent years. The company is owned by Morning Star Auto, which Kaixin Auto is planning to purchase. Upon completion of the deal Kaixin Auto plans to pivot toward an EV export business model targeting Southeast Asia, the Middle East, and Europe. Kaixin’s announcement of continued progress toward that deal caused prices to rise quickly on June 2.
SPAC-funded deals may be tapering off but Apollomics (NASDAQ:APLM) stock shows that they haven’t disappeared entirely. The oncologics clinical-stage biopharmaceutical firm completed its business combination with Maxpro Capital Acquisition on March 30. That deal provides $23.65 million in Private Investment in Public Equity (PIPE) financing with which Apollomics can advance its oncology pipeline.
Upon the business combination, APLM stock spiked to $30 and immediately fell to $5 within weeks. It looked like another SPAC bust that enriched a few at the cost of the masses. What’s interesting is that APLM shares continue to trade near $5 with a target price of $21.50 from teh 2 analysts with coverage.
News that analyst Robert Burns from HC Wainwright has initiated coverage with an $18 target price has renewed interest in APLM shares. That makes 3 analysts with coverage all of whom believe APLM shares to be worth 3X their current price. It certainly raises the possibility of a very strong June for APLM stock.
MultiMetaVerse Holdings (MMV)
Investors looking for a unique opportunity should consider MultiMetaVerse Holdings (NASDAQ:MMV) stock. The company is an animation and entertainment firm for young consumers in China. There’s nothing particularly unique about that. Rather, it’s the unfamiliarity of the market that makes the opportunity unique.
MultiMetaVerse Holdings just signed an agreement to acquire an equity stake in Taomee. Taomee was formed in 2007 and is apparently one of China’s leading entertainment brands for young viewers with popular brands including ‘Mole’s World’, ‘Seer’, and ‘Flower Angel’. Again, these are ostensibly entirely unfamiliar names to most readers who have little to no insight into this market.
The transaction will now undergo a period of due diligence and is expected to close sometime in the second half of the year. The news caused share prices to more than triple from 95 cents to above $3 from which they are settling downward. For investors with more intimate knowledge of the brand and market, this could be a good deal in the lead-up to the closing of the deal in the second half.
Wearable Devices (WLDS)
Wearable Devices (NASDAQ:WLDS) is one of many lesser-known firms developing technology to make the metaverse a reality. The Israeli firm has created wristbands that allow for control of connected devices through finger motion.
One is called the Mudra band. It is an aftermarket device for the Apple watch that enables touchless control of the watch and iPhone as well. Users move their wrists and fingers through the air in order to interact with objects on their Apple Watch and iPhone.
Wearable Devices also sells a Mudra kit for developers wishing to create their own applications of the technology.
The reason investors should follow Wearable Devices in June relates to news from May 25. The company announced that the Mudra Band for Apple Watch is available for preorder on that date. Wearable Devices is in the process of manufacturing its initial volume batch of the technology. Although the Mudra band was initially developed with the Apple Watch and iPhone in mind, it has since been expanded to Apple’s product ecosystem.
NanoViricides (NYSEAMERICAN:NNVC) is a company that develops therapeutics based on nanomedicine, making the stock attractive. But what is nanomedicine? You probably know that nanomedicine is concerned with small particles with medical applications. But just how small those particles are might surprise you. Nanomedicine refers to devices and particles between 1 and 100 nanometers. 1 nanometer equals 0.0000001 cm.
NanoViricides is developing nanomedicine that attaches to virus particles and destroys the virus more effectively than antibodies and immunotherapeutics. The company’s lead candidate drug is NV-CoV-2 which is being studied in the fight against COVID and Long COVID. That drug is about to enter 2 clinical trials in India in connection with a licensing agreement with Karveer Meditech.
The hope and potential here for NanoViricides relate to a loss of efficacy of other COVID drugs. NV-CoV-2 promises to be able to address emerging resistance to current drugs and is formulated for different severities of the disease.
SciSparc (NASDAQ:SPRC) is another biotherapeutics firm focused on leading-edge opportunities. The company is leveraging the endocannabinoid system and new chemical entities to address Central Nervous System disorders.
SciSparc’s business model is to take compounds with previous US FDA approval and repurpose them for its business needs. That means a focus on Tourette Syndrome, Autism Spectrum Disorder, Epilepsy, Obstructive Sleep Apnea, Alzheimer’s Disease and Agitation, and Pain through new combinations of FDA-approved substances.
The idea is simple but smart because it theoretically should speed SciSparc’s progress through the developmental pipeline. Its pipeline includes synthetic forms of THC and natural forms of CBD among others. The company also currently boasts 3 U.S. patents and many more pending.
The company also makes money through nutraceutical sales currently. It isn’t a biotech that depends upon a future breakthrough drug designation or FDA approval in order to one day get sales. Also, it trades for $0.68 and carries a target price of $20.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.