10 Best Penny Stocks on Robinhood To Invest In for 2023

Written By Ben Broadwater

Updated November 8, 2023

Many new investors are drawn to penny stocks on Robinhood due to their low share prices. In fact, penny stocks have long been a subject of fascination and intrigue within the financial world. These stocks are often associated with small, emerging companies considered high-risk, high-reward investments. With modern trading platforms like Robinhood, penny stocks have become more accessible to a wider range of investors.

Robinhood, a popular commission-free brokerage platform, has gained significant attention for its user-friendly interface and democratization of investing. It allows individuals to buy and sell stocks, including penny stocks, with ease and convenience directly from their smartphones. This accessibility has attracted many novice investors, drawn by the allure of potentially huge gains from these low-priced stocks.

However, it's important to approach penny stocks with caution. While some investors have achieved impressive returns, penny stocks' volatility and speculative nature can lead to substantial losses. Due to their small market capitalization and limited trading volume, penny stocks are prone to manipulation and price manipulation schemes.

Investing in penny stocks on Robinhood requires careful research and a thorough understanding of the associated risks. Investors should consider the company's financial health, management team, market trends, and potential catalysts before making investment decisions. Having a well-defined investment strategy, risk management plan, and a realistic understanding of the possible outcomes.

best penny stocks on robinhood

List of 10 Best Penny Stocks on Robinhood

  1. Aphria Inc. (NASDAQ: APHA)
  2. VistaGen Therapeutics, Inc. (NASDAQ: VTGN)
  3. Marathon Oil Corporation (NYSE: MRO)
  4. Aurora Cannabis Inc. (NYSE: ACB)
  5. Exela Technologies, Inc. (NASDAQ: XELA)
  6. MFA Financial Inc. (NYSE: MFA)
  7. Nokia Corporation (NYSE: NOK)
  8. Verb Technology Company, Inc. (NASDAQ: VERB)
  9. Senseonics Holdings, Inc. (NYSE: SENS)
  10. Broadway Financial Corporation (NASDAQ: BYFC)

How to Buy Penny Stocks on Robinhood

To buy penny stocks, you can follow a step-by-step process that involves navigating the platform, conducting research, and executing trades. Here's a detailed guide on how to buy them:

1. Sign up and Fund Your Account

  • Download the Robinhood app or visit their website to create an account. ( Apple or Google Play )
  • Complete the registration process and verify your identity.
  • Fund your account by linking it to your bank account.

2. Research Penny Stocks

  • Conduct thorough research on potential penny stock investments. Look for information about the company's financials, management team, industry trends, and recent news.
  • Utilize external sources like financial news websites, market research reports, and company filings to gather relevant information.

3. Set Up Stock Alerts

Use Robinhood's stock alert feature to set up notifications for the penny stocks you're interested in. This way, you'll receive updates on price movements and market news.

4. Place a Trade

The ease of buying and selling penny stocks on Robinhood has led to an increase in trading activity. Here's how to place a trade.

  • Open the Robinhood app and search for the desired penny stock by its ticker symbol.
  • Click on the stock's page to access its information, including the current price, historical data, and news articles related to the company.
  • Choose whether you want to buy the stock at the current market price or set a limit order with a specific price.

5. Determine Order Size and Quantity

  • Decide how many penny stock shares you want to purchase and enter the quantity in the order placement section.
  • Consider your risk tolerance, available funds, and portfolio diversification while determining the order size.

6. Review and Confirm Trade

  • Double-check the details of your order, including the quantity and price.
  • Review any applicable fees or commissions associated with the trade.
  • Once satisfied, confirm the trade to execute the purchase of the penny stock.

It's important to note that trading penny stocks, or any other platform, carries inherent risks. It's crucial to perform thorough research, diversify your portfolio, and be cautious of penny stocks' potential volatility and manipulation. Keep track of your investments and regularly review their performance to make informed decisions.

Best Penny Stocks on Robinhood to Buy Now

When it comes to penny stocks available on the Robinhood platform, there are several options that investors can explore. These stocks, priced under $5 per share, have the potential to generate significant returns for those willing to take on the associated risks. The best penny stocks offer opportunities for investors seeking high-reward investments, from emerging pharmaceutical companies to technology startups.

1. Aphria Inc. (NASDAQ: APHA)

Aphria Inc. (NASDAQ: APHA) is one of many outstanding penny stocks on Robinhood. Aphria is a leading Canadian cannabis company engaged in cultivating, processing, and distributing medical and recreational cannabis products. As a pioneer in the industry, Aphria has established a strong domestic and international presence. With its diverse portfolio of brands and strategic partnerships, the company aims to capitalize on the growing cannabis market.

However, it's important to note that investing in Aphria, like any penny stock, carries risks associated with the volatile nature of the cannabis industry and the potential impact of regulatory changes. Investors interested in Aphria should conduct thorough research, evaluate market trends, and monitor industry developments before making investment decisions. Additionally, it's advisable to exercise caution, diversify one's portfolio, and be prepared for potential stock price fluctuations.

Interested in more cannabis stocks? Check out these Marijuana Dividend Stocks

2. VistaGen Therapeutics, Inc. (NASDAQ: VTGN)

As a biopharmaceutical company, VistaGen focuses on developing innovative therapies for various central nervous system (CNS) disorders. Their research primarily centers around utilizing stem cell technology to create novel drug candidates.

Investors interested in VistaGen Therapeutics may consider factors such as the company's pipeline of drug candidates, ongoing clinical trials, and partnerships within the industry. However, it's crucial to conduct thorough research and understand the potential risks associated with investing in biotech companies and the volatile nature of penny stocks.

3. Marathon Oil Corporation (NYSE: MRO)

penny stocks on robinhood - mro stock

Marathon Oil is a world-renowned oil and gas exploration and production company. While its current stock price is above typical "penny stock" range, this stock has spent a good amount of time under the $5 mark throughout its history.

Headquartered in the United States, the company blends the discovery, development, and exploration of unconventional assets to meet client needs. Marathon Oil is active in multiple geographies, including North America, the Middle East & Africa, South America, Asia Pacific excluding Japan (APEJ), and Western Europe.

Marathon Oil has a collaborative partnership with ExxonMobil Corp., the biggest integrated oil company in the world. As such, it's expected that Marathon Oil will continue to benefit from Exxon Mobil's financial assistance and global footprint in pursuing oil and gas opportunities worldwide.

4. Aurora Cannabis Inc. (NYSE: ACB)

Aurora Cannabis Inc. (NYSE: ACB) is a notable penny stock on Robinhood. As a leading cannabis producer, Aurora Cannabis has attracted the attention of investors looking to capitalize on the growing marijuana industry. However, it is important to note that the cannabis sector can be highly volatile and subject to regulatory changes.

Investors considering Aurora Cannabis or any other penny stock should conduct thorough research, assessing the company's financials, market position, and competitive landscape. Understanding the risks involved and having a well-defined investment strategy are crucial when considering penny stocks like Aurora Cannabis on Robinhood.

5. Exela Technologies, Inc. (NASDAQ: XELA)

Next on our list of The Best Penny Stocks on Robinhood is Exela Technologies, Inc. (NASDAQ: XELA). Exela recently made news for its innovative digital transformation solutions. The company offers automation software and services that streamline business processes, enhance customer experiences, and improve operational efficiency. Its technology solutions have gained attention for their potential to revolutionize industries such as healthcare, finance, and legal services.

With a focus on digital transformation and workflow optimization, Exela Technologies aims to address the evolving needs of businesses in an increasingly digital world. This news has sparked interest among investors and industry observers as the company continues to develop and deploy cutting-edge solutions that have the potential to shape the future of various sectors.

6. MFA Financial Inc. (NYSE: MFA)

penny stocks on robinhood - mfa stock

MFA Financial Inc., listed on the New York Stock Exchange under the ticker symbol MFA, is a company engaged in real estate finance. As a real estate investment trust (REIT), MFA primarily invests in mortgage-backed securities and holds a portfolio of residential mortgage loans.

The company generates income from these investments' interest and principal payments. MFA Financial Inc. aims to provide attractive risk-adjusted returns to its shareholders through a diversified portfolio of mortgage-related assets. Investors interested in the real estate finance sector may consider researching and evaluating MFA Financial Inc. as a potential investment opportunity.

7. Nokia Corporation (NYSE: NOK)

Nokia Corporation (NYSE: NOK) is a well-known multinational telecommunications and information technology company. Listed on the New York Stock Exchange (NYSE), Nokia has a long history in the industry and is involved in various segments, including networks, software, and licensing.

As a prominent player in the telecommunications sector, Nokia has garnered attention from investors interested in penny stocks on Robinhood. However, it's important to note that investing in Nokia or any penny stock carries risks, and thorough research is essential to understand the company's financials, competitive landscape, and potential catalysts before making investment decisions.

8. Verb Technology Company, Inc. (NASDAQ: VERB)

Verb Technology Company, Inc. (NASDAQ: VERB) is a penny stock listed on the NASDAQ exchange. The company provides sales enablement and customer relationship management solutions through its proprietary technology platform. As a penny stock, VERB carries a higher level of risk due to its lower market capitalization and potential volatility.

Investors interested in VERB should thoroughly research the company's financials, growth prospects, and competitive landscape. It's important to stay updated on relevant news and market trends that may impact the stock's performance. As with any penny stock, caution and a well-informed investment strategy are essential when investing in VERB.

9. Senseonics Holdings, Inc. (NYSE: SENS)

Senseonics Holdings, Inc. (NYSE: SENS) is a company that focuses on the development and commercialization of glucose monitoring systems for people with diabetes. Senseonics aims to provide convenient and accurate continuous glucose monitoring solutions with its innovative technologies.

As a publicly-traded company listed on the New York Stock Exchange (NYSE), investors can access and trade Senseonics' stock through various brokerage platforms, including Robinhood. By offering advanced glucose monitoring products, Senseonics aims to improve the lives of individuals managing diabetes and potentially create value for shareholders.

10. Broadway Financial Corporation (NASDAQ: BYFC)

Broadway Financial Corporation (NASDAQ: BYFC) is engaged in the provision of banking and financial services. As a publicly traded company, its stock can be bought and sold by investors on the stock market. Investors interested in Broadway Financial Corporation can track its performance, monitor market news related to the company, and make investment decisions based on their analysis and risk tolerance. Trading the BYFC stock on platforms like Robinhood allows investors to participate in the potential gains or losses of the company's stock price.

Another Way to Invest in Penny Stocks – ETFs

If you're interested in investing in penny stocks or microcap stocks, you might want to consider the iShares Micro-Cap ETF. Made up of over 1,600 stocks, the iShares Micro-Cap ETF can expose you to many small U.S. companies while helping to diversify your stock allocation.

penny stocks on robinhood - microcap etf

Tips for Choosing The Best Penny Stocks on Robinhood

1. Research the Company's Financial Health

When choosing the best penny stocks on Robinhood, it is crucial to research the company's financial health thoroughly. Analyzing revenue growth, profitability, debt levels, and cash flow can provide insights into the company's overall stability and potential for future growth.

Assessing the financial health helps investors gauge the company's ability to weather economic downturns, fund operations, and deliver returns. By examining key financial metrics and ratios, investors can make more informed decisions and reduce the risk of investing in financially unstable penny stocks.

2. Analyze the Management Team

The competence and experience of the company's leadership can significantly impact its success. Research the backgrounds of key executives and directors to evaluate their track record, expertise, and reputation. Assess their ability to navigate challenges, execute strategies, and drive growth.

Strong leadership with relevant industry experience can inspire investor confidence and increase the likelihood of positive outcomes. Conversely, inexperienced or questionable management can be a red flag, signaling potential risks or mismanagement. Thoroughly examining the management team helps investors make more informed decisions when considering penny stocks.

3. Look For Potential Catalysts

When choosing penny stocks, it's important to consider potential catalysts impacting the stock's performance. Here are some factors to look for:

  • Positive developments in the company's industry or sector.
  • New product launches or innovations.
  • Partnerships or collaborations with reputable companies.
  • Regulatory approvals or favorable legislative changes.
  • Earnings reports exceeding expectations.
  • Expansion into new markets or geographic regions.
  • Acquisition or merger announcements Identifying these catalysts can help investors gauge the potential growth prospects.

4. Consider the Industry Trends

The industry in which the penny stock is listed and its market capitalization can help inform prospective investors. Penny stocks typically fall into one of three broad categories:

When choosing the best penny stocks on Robinhood, looking at other companies that may offer similar opportunities is important. For instance, if a company is focused on a specific industry (like real estate), its peers could be similar companies serving it. Similarly, if a penny stock is listed on the Nasdaq or NYSE, it may be worth looking at other companies with financials similar to the company's and trends closely aligned with their own.

5. Review Recent News and Announcements

The quality of the company's news and announcements can provide valuable insight into potential growth prospects. Sifting through hundreds of news articles and announcements can be daunting, but it's important to research and monitor relevant news outlets for potential catalysts.

By knowing when positive or negative events occur, investors can evaluate how well the company acted in each instance and how conversations around its market share may be affected.

6. Assess the Trading Volume and Liquidity

It is important to evaluate the average daily trading volume of the stock, as higher volumes indicate greater liquidity and ease of buying or selling shares. Stocks with low trading volumes may be illiquid, resulting in difficulty exiting positions. Liquidity also impacts the bid-ask spread, which can affect transaction costs. Therefore, considering a penny stock's trading volume and liquidity helps investors understand its market dynamics and make informed decisions about potential investments.

7. Evaluate the Stock's Historical Performance

Analyzing the stock's price movements over time can provide insights into its volatility and potential for growth. By examining past trends, patterns, and price fluctuations, investors can better understand the stock's behavior and make more informed decisions. This evaluation can help investors assess the stock's stability, identify recurring patterns, and gauge its potential for future price appreciation or decline.

Trading Strategies for Penny Stocks

Trading strategies for penny stocks require careful consideration of the unique characteristics and risks associated with these stocks. Here are a few strategies that traders often employ when trading penny stocks:

1. Momentum Trading

This strategy involves identifying penny stocks with significant price movements and high trading volumes. Traders aim to capitalize on the short-term price momentum by buying stocks showing upward trends and selling them quickly for a profit.

2. Breakout Trading

Traders employing this strategy look for penny stocks breaking out of established price ranges or chart patterns. They enter positions when the stock's price surpasses a key resistance level, anticipating a significant price move in the same direction.

3. Fundamental Analysis

Some traders analyze the fundamental aspects of penny stocks. They evaluate financial statements, management teams, industry trends, and potential catalysts to identify undervalued stocks with long-term growth potential.

4. Swing Trading

This strategy involves taking advantage of short- to medium-term price fluctuations in penny stocks. Traders aim to capture profits by entering positions during price swings and selling when the stock reaches its profit targets or predetermined exit points.

5. Risk Management

Some investors have had success with penny stocks on Robinhood. However, effective risk management is crucial when trading penny stocks. Traders may implement strategies such as setting stop-loss orders to limit potential losses, diversifying their portfolio, and avoiding excessive exposure to any stock.

Common Mistakes to Avoid in Penny Stock Investing

When investing in penny stocks, it's important to be aware of common mistakes that can lead to significant financial losses. Here are some mistakes to avoid in penny stock investing:

1. Lack of Research

Failing to conduct thorough research on a penny stock before investing is a common mistake. Investigating the company's financial health, management team, industry trends, and potential risks is crucial before making any investment decisions.

2. Chasing Hyped Stocks

Investing based solely on rumors, social media buzz, or promotional campaigns without proper due diligence can be detrimental. Avoid getting caught up in the hype and make informed decisions based on reliable information.

3. Ignoring Liquidity and Volume

Penny stocks often have low liquidity and limited trading volumes. Ignoring this can lead to difficulty buying or selling shares at desired prices, resulting in slippage and losses. Consider the liquidity and volume of a stock before investing.

4. Overlooking the Risks

, Penny stocks are inherently risky due to their small market capitalization, limited trading history, and potential for price manipulation. Failing to recognize these risks can lead to significant financial losses. Understand the risks involved and be prepared for potential volatility.

5. Lack of Diversification

Putting all your capital into a single penny stock can expose you to unnecessary risk. Diversify your portfolio by investing in multiple stocks across different industries to mitigate the impact of any single stock's poor performance.

6. Emotional Decision Making

Making investment decisions based on emotions like fear or greed can cloud judgment and lead to poor choices. Develop a disciplined investment strategy and stick to it, avoiding impulsive trades driven by emotions.

7. Not Setting Stop-Loss Orders

Failing to set stop-loss orders to limit potential losses can be a costly mistake. Establishing predefined exit points helps protect against significant downturns and allows for better risk management.

Also, by avoiding these common mistakes and approaching penny stock investing with a cautious and informed mindset, investors can enhance their chances of making sound investment decisions and minimize potential losses.

Final Thoughts

The best penny stocks on Robinhood offer a unique opportunity for investors seeking potentially high returns. The accessibility and user-friendly interface of Robinhood have made it easier than ever for individuals to participate in trading penny stocks. However, it is important to approach these investments cautiously, conduct thorough research, and be aware of the risks involved. Penny stocks are volatile and speculative, and investors should have a well-defined investment strategy, risk management plan, and a realistic understanding of the potential outcomes. By staying informed and making informed decisions, investors can confidently navigate the world of penny stocks on Robinhood.

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