A typical "penny stock," believe it or not, can trade for as
much as $5 a share. The idea behind penny stocks is the same,
however, whether the investment is worth 3 cents or $3.03 - a
very small-cap equity or microcap stock with the ability to break
out and post big gains.
When I screen for penny stocks, I always omit companies that
are illiquid, trading for only a few pennies or listed on the
pink sheets. These penny stocks are just too risky to make sense.
However, that doesn't mean investors can't find a number of
bargain breakouts by combing through cheap stocks.
Here are eight examples of breakout penny stocks in the
health-care sector. All it takes is one big drug approval, a
buyout from big pharma or a plump contract from a major provider
to send shares of penny stocks like these soaring.
) designs, manufactures and markets products used by cardiac
surgeons. These products are frequently used when
performing coronary bypass surgery. Cardica also makes
endoscopic microcutters which are used in various other
surgeries. This penny stock has boasted an impressive gain
of 82.8% since January. In early August, Cardica reported
total product sales of $1 million for its fiscal fourth quarter
ending June 30. Its stock price of $2.14 is down slightly
from its 52-week high of $2.85; however Cardica is still a good
bargain buy at this time.
Based in Santa Ana, Calif.,
) designs, develops and manufactures rotary drive systems for the
medical device and dental industries. These rotary systems
are also used in cranial, spinal, arthroscopic and orthopedic
surgery. This penny stock has climbed 46.5% since January,
or 71 cents a share. In its last income statement, PDEX
reported quarterly revenue growth of 33.7% year over year, along
with a net profit margin of 2.82%. Investors can buy into
Pro-Dex stock at $2.22 per share.
CAS Medical Systems (
CAS Medical Systems
) develops manufactures and markets non invasive patient
monitoring products. The company's products are divided
into the following segments: critical care monitoring, blood
pressure measurement technology and bedside monitoring.
While this penny stock is up just 4.7% year-to-date, it is still
riding high from its 52-week change of 43.2%. Its stock
price of $2.22 is not far off from its 52-week high of $2.51,
which is an encouraging sign for potential investors.
) is known by many by its former name of OccuLogix. Based
in San Diego, the health-care company is known for its tear
testing platform which allows eye doctors to test for highly
sensitive and specific biomarkers. Since March 1, the
stock has climbed an incredible 162%. The huge spike in
stock price occurred when OccuLogix announced that investors had
agreed to buy 1.5 million shares of the company's common stock
for $3.22 per unit. The purchase cost investors
approximately $5 million and sent TearLab's stock
surging. Since the purchase, the stock has leveled
off, however at $2.63 a share, this penny stock is still worth
Synergetics USA (
Headquartered in Missouri,
) is a medical device company that designs, manufactures and
markets microsurgical instruments. These instruments are
used in microsurgery and are often used by ophthalmologists and
neurosurgeons. Synergetics is another penny stock that has
had a successful 2010. Year-to-date, this health-care stock
has climbed 113.7% compared to small gains by the broader
markets. Equally impressive is the company's quarterly
earnings growth of 622.5%, which was reported in its last income
) is a global provider of therapeutic based laser systems and
delivery devices used to treat eye diseases and skin
conditions. Its products consist of laser probes that are
used in treating eye diseases including diabetic retinopathy,
glaucoma and macular degeneration. Over the past 52 weeks,
IRIX stock has gained 35.7%. This penny stock has also
outperformed earnings estimates for two straight quarters, which
has pleased shareholders. A net profit margin of 8.2% last
quarter also adds to this stock's impressive resume.
Animal Health International (
As its name would suggest,
Animal Health International
) distributes animal health products in the U.S. and
Canada. Its products include pharmaceuticals, vaccines,
parasiticides, diagnostics, capital equipment and sanitizers,
among others. According to the company, it sells over
40,000 products to approximately 71,000 customers. The last
52 weeks have been a bumpy ride for AHII, but the penny stock is
up 19.8% during that time. Investors are optimistic as
analysts have upped earnings estimates to eight cents this
quarter and EPS of seven cents last quarter. At $2.60, AHII
is a very affordable stock to buy right now.
Simulations Plus (
Based in Lancaster, Calif.,
) produces software used for pharmaceutical research and
educational purposes. The company also makes computer
software and hardware to be used specifically by people with
disabilities. Since January, this penny stock is up 93.5%,
and it posted a net profit margin of 23.7% last quarter.
Likewise, this stock met earnings estimates last quarter, after
exceeding expectations in the two prior quarters. Its
quarterly earnings growth of 30% year over year also makes this
penny stock a valuable buy at this time.
As of this writing, Louis Navellier did not own a position
in any of the stocks named here.
Top 5 Stocks for the 4th Quarter Surge.
Louis Navellier details five stocks set to deliver record
earnings this October and jump 30%-50% in the next 90 days as
the big money piles in.
Get their names online here,
including Louis' buy-below and target prices.