This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

8 Health Care Penny Stocks to Buy Now

By Louis Navellierof InvestorPlace

NEW YORK ( TheStreet) -- 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.


Cardica (CRDC)

Cardica (CRDC) 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.

Pro-Dex (PDEX)

Based in Santa Ana, Calif., Pro-Dex (PDEX) 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 (CASM)

Medical-technology company CAS Medical Systems (CASM) 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.

TearLab (TEAR)

TearLab (TEAR) 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 buying.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs