3 Stocks Under $5 To Watch in Biotech, Electronics and Basic Materials

When stocks make big price moves in a few days, investors should watch what happens next.

Large price moves among stocks are often accompanied by above average volume. Entry and exit points may be created at those times, along with high volatility. Last week, a number stocks under 5 dollars moved significantly. So we took a closer look.

In the biotech sector, Galena Biopharma (GALE) was in the spotlight. Galena has drugs in the developmental stage that relate to cancer treatment. Similar to other developmental stage drug companies, its shares are highly speculative. After peaking at $7.77 this year, Galena shares closed at $3.73.

Media took note of recent insider selling volumes over the last few months. Galena came under fire because its advertising and marketing activities may have helped boost its share price.

Galena issued a statement to address the accusatory coverage, and also pointed out a few of its achievements:

Acquired Abstral(R) (fentanyl) sublingual tablets, implemented a commercial team, launched the drug in October 2013, and currently have approximately 5% of the branded market after only four months of launch. Continued to progress pivotal, Phase 3 PRESENT trial for NeuVax(TM) (nelipepimut-S) and added another commercial partnership with Dr. Reddy's in India. Progressed enrollment with Phase 2b combination trial with NeuVax and Herceptin(R) (trastuzumab). Broadened portfolio into hematology with the acquisition of Mills Pharmaceuticals and anagrelide controlled release, now GALE-401.

Click on the interactive chart to see Galena’s share price over time.

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Fuel cells

In the alternative energy technology space, Plug Power (PLUG) traded below $3.50 earlier last week, but closed at $3.78. Companies that supply fuel cells and hydrogen fueling systems are no stranger to volatility. (Ballard Power (BLDP) traded above $100 over a decade ago, and is now at $2.40.)

Investors cheered after Plug Power won a contract to supply 1,500 fuel cells to a retailer.

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Plug Power trades at high multiples, but its sales were steady over the last four fiscal years. Its R&D and general expenses declined in those years, too.

In the resource sector, Augusta Resource (AZC) closed at $3.21 after bottoming at $1.40 on January 21. The firm has large reserves of copper/molybdenum in Arizona. Hudbay Minerals (HBM) suggested in early February that it wants to acquire Augusta.

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So will increasing volume and volatility lead to higher prices for these stocks under $5? 

 

Written by Chris Lau. 

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