The Five Best Nasdaq-Listed Biotech Penny Stocks to Buy Now

If you look at the trading strategies of Wall Street elites such hedge funds and star fund manager Cathie Wood, you’ll notice that penny stocks aren’t their favorite investments. However, cheap stocks that trade under $5 remain popular with retail investors. What are the best penny stocks to buy now>

According to SEC standards, a penny stock is a stock trading below $5. Some investors call them micro-cap stocks.

Penny stocks are associated with small companies, usually startups. Most penny stocks trade on OTC (over-the-counter) markets, but some trade on major exchanges such as the NYSE and Nasdaq.

Regardless of whether they trade on OTC markets or the major exchanges, penny stock prices usually range from less than $1 to just under $5. You’ll find most cheap stocks on OTC markets. The problem is that OTC markets are loosely regulated, leading to limited transparency, and you may struggle to find sufficient information about your target companies for due diligence. If you can’t thoroughly research your target stocks, you may be at risk of fraud and market manipulation.

As a result, many people hunt for penny stocks on the NYSE or Nasdaq for the sake of investor protection measures. Moreover, penny stocks on the major exchanges may be easier to access. The reasons are that some brokers don’t support OTC markets or will impose extra charges on those who want to trade on OTC markets.

You can find penny stocks across industries. For many people, healthcare is among the most exciting sectors to invest in. Demand for better drugs for cancer and other diseases is only growing, meaning that a healthcare-related business can be lucrative. These are some of the biotech penny stocks on Nasdaq that you may want to consider:

• Athersys (ATHX).

• MEI Pharma (MEIP).

• Alzamend Neuro (ALZN).

• GlycoMimetics (GLYC).

• Unity Biotechnology (UBX).

Athersys (ATHX) develops treatments for a variety of diseases. The Ohio-based company has several drug candidates in its pipeline, including a potential treatment for stroke in adults. ATHX stock’s $7 price target suggests a 3,800 percent upside.

MEI Pharma (MEIP), a California-based biotech, develops cancer therapies and has several drug candidates in its pipeline. The company has a co-development arrangement with Japan’s Kyowa Kirin in a deal that could earn it nearly $600 million in milestone payments. MEIP stock’s $10 price target implies a 1,800 percent upside.

Alzamend Neuro (ALZN) develops treatments for Alzheimer’s and other psychiatric and neurodegenerative disorders. The Georgia-based biotech has two drug candidates in its pipeline. ALZN stock’s $15 price target implies a 1,500 percent upside.

GlycoMimetics (GLYC) develops glycobiology-based therapies for cancers, targeting areas of unmet medical need. The Maryland-based company has at least five drug candidates in its pipeline, at various stages of development. GLYC stock’s $13 price target implies a 1,500 percent upside.

Unity Biotechnology (UBX), a California-headquartered company, develops anti-aging therapies. Billionaire Amazon founder Jeff Bezos has backed its efforts. UBX stock’s $8 price target suggests a 1,300 percent upside.

There's nothing like a sure investment. But if you invest in high-quality businesses, you can make a killing with penny stocks. It may be lost of many that Monster Beverage (MNST) was once a penny stock. The energy drink company’s stock traded under $1 for many years, and now it's worth about $100. Sirius XM (SIRI) and Ford (F) also once traded as penny stocks.