Best 2 dollar stocks to buy
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If so, then you've got enough to buy a share of either satellite radio provider Sirius XM NASDAQ: SIRI or biotech start-up Organovo NASDAQ: Both of these companies have had solid runs since hitting lows in February. SIRI data by YCharts. Organovo has two key products on the market: The former has been available for over a year, while the latter was only recently released.
The idea behind these tissues is that biopharmaceutical companies can test their drugs on these tissues to see if there are any toxicity issues. Historically, such toxicities only show up when a drug enters clinical trials, and large ones at that -- which can often lead to a company shelving a drug after already investing a ton of money.
By offering a way to let drug companies kill their ideas faster because they're toxic , Organovo allows big pharma to save billions in sunk costs. At the same time, the Organovo is far from profitable, and may need to dilute shareholders if it starts running out of money.
Analysts also don't see the company being profitable anytime soon. Shareholders should understand that Organovo is a high-risk, high-reward stock before purchasing shares. Sirius couldn't be more different than Organovo -- an established business that's been around since and has billions in annual revenue.
Currently, Sirius XM has over Its customer count has been growing for a long time. And while that growth had been slowing heading into , those trends seem to have reversed themselves. That's important, because once customers are locked in to Sirius' plans, there's a relatively low churn rate of 1. In other words, customers tend to stay for a long time. Equally important, many new cars are installed with a free trial of Sirius.
Shares appear to be somewhat pricey right now, at 34 times trailing earnings. But because this is a subscription-based service, I think free cash flow is a better metric. Here, the company is trading for a much more reasonable 17 times trailing free cash flow.
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While the risk is less with Sirius, the reward is probably lower than it could be for Organovo. But there's a bigger takeaway: If the stock goes up or down by the same percentage, your gains and losses are exactly the same. That being said, I still think these two are worth investigating based on your comfort with risk.
Brian Stoffel owns shares of Organovo Holdings. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Brian Stoffel has been a Fool since , and a financial journalist for the Motley Fool since He tends to follow the investment strategies of Fool-founder David Gardner, looking for the most innovative companies driving positive change for the future.
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Best Cheap Stocks Under $10 to Buy Now | InvestorPlace
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