Learning Center
Plans & pricing Sign in
Sign Out

Biotechnology Penny Stocks: Lucrative Options for the Future?



Biotechnology Penny Stocks: Lucrative Options for
the Future?
Technology investments are becoming more and more popular day by day. These are
investments in companies in the field of electronics, software, information technology
and the like. Such companies are associated with the researching, developing and
distribution of goods and services that are based on technology. With this sector fast
developing by leaps and bounds, such investments look quite promising in the long run.
Biotechnology covers a wide variety of subjects; like genetic production of crops (which
produces better yields of crops), research of stem cells (this information may be used in
certain life-saving or important surgeries), replacement of the human body parts by
intelligent programmed or robotic parts, etc. For the same, living organisms as well as
bio-processes are used. This field is a boon to mankind as its diverse applications could
help in the betterment of human life; some even go so far to believe that soon a cure for
death could be found! In short, if you consider genetic research, it involves the
modification of living organisms so that the same can be used for a particular objective.
As such, biotech investment is looked upon as a future asset as the innumerable
studies, research and development involved herein offer good scope for even small firms
in this sector to grow once a break-through in any technology is achieved. Stocks of
such firms or companies can give good returns and hence investments in this field can
be lucrative indeed.
Biotechnology Penny Stocks are stocks of such biotech companies that trade below $10 a
share. Investing in biotech stocks of companies that deal with research in drugs to help
mankind or those involved in the manufacture of drugs and which offer good returns to
investors could be profitable. The reason is that many drugs and healing medicines
using DNA tech-research are being continuously developed and enhanced in order to
treat many complex human diseases. While it is true that putting money in such penny
stocks is risky, it is also equally true that once the company performs well and gets the
needed breakthrough, it can give maximum profits.
Unlike other sectors, biotech field can be viewed as a future growth market. Here, the
individual development in terms of products that boost its sales and profits of a company
propels its stock value forward. Hence shares of these stocks can be volatile. In addition,
such companies need to ensure utmost safety in their operations. Due precautions that
there are no adverse side effects have to be taken otherwise their stocks suffer a lot.
The U.S. Food and Drug Administration (FDA) approval is very necessary for the
biotechnology penny stocks, foe which they need to pass through three phases:
Phase 1: This is the initial stage development phase involving small sample groups.
Phase 2: This is a continuation of Phase 1 stage
Phase 3: This is the most complicated stage wherein the fate of the penny stock can be
sealed. On account of the high costs incurred, it may dip in value due to no gains or
revenue. But if it thrives in this condition due to the drug passing its test, it may reap
good benefits as it is admitted directly to the stage where FDA approval will be sought.
And when this is approved, the stock value escalates.
All the biotechnology stocks that are listed on the NASDAQ stock exchange are owned
by the ishares NASDAQ Biotechnology Index Fund. Market capitalization and volume
determines the biotech stock picks of which some are owned by the SPDR S&P Biotech
exchange traded fund. It would be wise to have a diversified portfolio of biotechnology
companies. Investing in biotech stocks can be done through exchange traded funds. In
order to purchase an ETF, you could take the help of stock charts and choose an entry
point. Prior to purchasing any share, check whether the timing is proper. Do wait if there
is a down trend in shares. Look for the time it bottoms and upturns and then act.


To top