Top 5 penny stocks to watch in 2026
Penny stocks are highly volatile shares that can make or break an investment portfolio – if too much is invested in these low-value stocks. They’re easily accessible because they don’t cost a lot, but buyer beware: they bring great risk in addition to their potential for generous profits.
Important to know
This article is for informational purposes only and does not constitute investment advice. Please ensure you understand the risks and consider your individual circumstances before trading.
Key takeaways
- Penny stocks trade at US$5 or less, making them accessible to stock traders who want to buy a lot of one company’s shares
- Their potential for high returns is great, but stock traders can just as easily lose their initial investment
- Penny stocks to watch right now include Beach Energy, M&G, Immunic, MTN Nigeria and Dingdong (Cayman)
What are penny stocks?
Penny stocks refer to companies with a stock price lower than US$5 per share. They can be a steal in the market – if you know which ones to watch out for. But that also means they’re inherently risky: volatile, often with lower liquidity. Because they’re thought of as high-risk, the returns or losses can be substantial.
Why trade penny stocks?
Stock trading penny stocks can be a profitable investment, especially if you do your research well and pick shares of companies that have a favourable outlook. However, as we mentioned, no matter how much research you conduct, there will always be an element of risk involved in stock trading.
Advantages of penny stocks
The advantages of trading penny stocks are:
- Diversification: Because they’re high-risk, stock traders can allocate a small portion of their investment portfolio to penny stocks with the hopes of receiving high returns
- High potential for profit: Because they’re often undervalued, penny stocks have the ability to return extraordinary gains. However, they can just as easily lead to great losses. This is true of stock trading and CFD trading
- Small capital: Due to the low share price, you don’t need a massive outlay to start trading penny stocks
- Potential for growth: Penny stocks can grow into mid-sized stocks, effectively increasing their value
Risks of penny stocks
Just as there are pros to trading penny stocks, so are there disadvantages, too. Let’s look at them:
- Illiquid: Penny stocks are easily bought, but not so easily sold. This makes them risky if you want to sell before you lose money
- Potential for bankruptcy: Companies that have penny stocks are more likely to declare bankruptcy. If you trade stocks close to the time of a company going under, you’re more likely to lose your investment
- Prone to pump-and-dump schemes: Pump-and-dump schemes happen when a low-value stock is hyped up artificially, luring traders to buy shares. The stocks are then sold when they’re overpriced and the traders being scammed lose their investments
Top 5 penny stocks to watch in 2026
The penny stocks we’ve selected were chosen for their optimistic current and future outlooks, along with positive company and broad macroeconomic trends in their respective industries.
Overview of the penny stocks in this article
These stocks are available to trade via CFDs with us: Beach Energy Limited, M&G Plc and Dingdong (Cayman) Limited.
The following stocks are available to stock trade through us: M&G Plc, Immunic, Inc and Dingdong (Cayman) Limited.
All figures are accurate as of 1 April 2026.
Company |
Sector |
Market cap |
Stock price |
Six-month stock price gains |
Available for CFD trading with us |
Available for stock trading with us |
Energy minerals |
A$2.96 billion1 |
A$1.29 |
12.17%2 |
✓ |
X |
|
Finance |
£6.44 billion3 |
£2.81 |
12.38%4 |
✓ |
✓ |
|
Health Technology |
US$144.82 million5 |
US$1.11 |
12.84%6 |
X |
✓ |
|
Communications |
₦15.02 trillion7 |
₦760.00 |
78.82%8 |
X |
X |
|
Retail trade |
US$548.43 million9 |
US$2.57 |
12.56%10 |
✓ |
✓ |
1. Beach Energy Limited (ASX: BPT)
Industry: Energy minerals
Market cap: A$2.96 billion
Stock price: A$1.29
Beach Energy is a key player in the Australian energy sector, operating as an independent explorer and producer of oil and gas. The company maintains a diverse portfolio of assets across five major basins in Australia and New Zealand, including the Cooper, Otway and Perth basins.
Its business model focuses on supplying natural gas to the domestic Australian market while also exporting oil and liquids globally. By managing the entire value chain from initial exploration to final sales, it plays a vital role in regional energy security.
Why traders might be interested
Stock traders may find this stock appealing due to its strategic position in the transition towards cleaner energy. As coal is phased out, natural gas is increasingly viewed as a necessary 'bridge fuel', potentially sustaining long-term demand for the output of the company.
Risk context
The energy sector is highly sensitive to fluctuations in global commodity prices, which can be volatile based on geopolitical events. Operationally, the company has recently faced challenges with margin compression, where the cost of producing and delivering energy has risen faster than its revenue.
There’s also the inherent technical risk of 'dry holes' in exploration or unexpected delays in bringing new plants to full commercial capacity, which can weigh heavily on the stock price.
2. M&G Plc (LSE: MNG)
Industry: Finance
Market cap: £6.44 billion
Stock price: £2.81
M&G is a prominent UK-based investment manager and savings institution that serves both individual and institutional clients.
The company operates through two main divisions: Asset Management, which invests across equities, fixed income and real estate, and Retail & Savings, which provides retirement and investment solutions.
Its business model relies on generating fees from the assets it manages, meaning its success is closely tied to the performance of global financial markets and its ability to attract new customer capital.
Why traders might be interested
M&G Plc is often attractive because of its commitment to returning value to shareholders. The company has a history of offering a high dividend yield, making it a frequent choice for those looking for regular income.
Also, its diversified approach across different asset classes provides some protection against a downturn in any single market, and its focus on expanding into international markets offers a pathway for future growth.
Risk context
The primary risk for this stock lies in its sensitivity to the broader economy. If global stock markets experience a significant correction, the value of the assets managed by the company will drop, leading to lower fee income.
Additionally, the investment industry is becoming increasingly competitive, with low-cost passive funds putting pressure on the profit margins of traditional active managers. Changes in UK government regulations regarding pensions or savings could also impact its business model unexpectedly.
3. Immunic, Inc (Nasdaq: IMUX)
Industry: Health Technology
Market cap: US$144.82 million
Stock price: US$1.11
Immunic is a clinical-stage biotechnology firm that focuses on developing oral therapies for chronic inflammatory and autoimmune diseases. Based in the US, but with a global research footprint, the company specialises in treatments for conditions such as multiple sclerosis and gastrointestinal disorders.
Unlike traditional profitable companies, its business model involves heavy investment in research and development (R&D), aiming to prove the safety and efficacy of its drugs to gain regulatory approval.
Why traders might be interested
Stock traders are often drawn to Immunic, Inc because of the 'high-reward' potential associated with late-stage clinical trials. The company is currently progressing with its lead drug candidate, vidofludimus calcium, which is in Phase 3 trials. Positive data from these trials, expected by the end of 2026, could act as a massive catalyst for the share price.
Risk context
The risk context for this stock is high, as is typical for the biotech sector. The company currently does not have a product on the market and is not yet profitable. If its clinical trials fail to meet their goals or if the US Food and Drug Administration (FDA) denies approval, the stock value could decline sharply.
4. MTN Nigeria Communications Plc (NSE: MTNN)
Industry: Communications
Market cap: ₦15.02 trillion
Stock price: ₦760.00
MTN Nigeria is the largest mobile network operator in Nigeria and a leading provider of digital services in Africa. The company has shifted its business model from being a traditional voice-call provider to a data-first organisation. It provides high-speed internet, home broadband and fintech services through its MoMo PSB platform.
By leveraging its massive infrastructure, the company aims to connect millions of households and businesses across Nigeria to the digital economy.
Why traders might be interested
There has been explosive growth in data consumption within its home market. As smartphone penetration increases, the revenue of the company from internet services and mobile banking has seen double-digit growth.
Risk context
The stock carries unique risks related to the Nigerian macroeconomic environment. The company is highly exposed to fluctuations in the value of the Naira – if the local currency weakens significantly against the US dollar, its debt-servicing costs and the cost of importing equipment can spike.
There are also regulatory risks, as telecommunications companies in the region are often subject to strict government oversight, fines or changes in licensing requirements that can impact profitability.
5. Dingdong (Cayman) Limited (NYSE: DDL)
Industry: Retail trade
Market cap: US$548.43 million
Stock price: US$2.57
Dingdong (Cayman) is a leading on-demand ecommerce company that provides fresh groceries and daily necessities to consumers in China. Its business model centres on a front-end warehouse system, which enables it to deliver fresh produce, meat and seafood to households in as little as 30 minutes. By digitising the agricultural supply chain, the company connects farms directly to urban customers, aiming to provide a superior and more efficient shopping experience.
Why traders might be interested
The company represents a play on the changing consumption habits of the Chinese middle class. The move towards online grocery shopping appears to be a permanent shift, and Dingdong has been working hard to achieve profitability by optimising its delivery routes and increasing its private-label product offerings.
Risk context
The risk profile for this stock includes intense competition and high operating costs. The ecommerce sector in China is crowded with giant rivals like Meituan and Alibaba, which can lead to price wars that thin out profit margins. Additionally, the 'quick-commerce' model requires a massive amount of manual labour and logistics infrastructure, making the company sensitive to rising wages and fuel prices.
How to trade penny stocks with IG UAE
CFDs
- Open a CFD trading account with IG UAE
- Search for penny stocks on the IG platform
- Decide whether to go long (buy) or short (sell)
- Choose your position size
- Set stop-loss and limit orders
- Place your trade and monitor it
Stock trading
- Open a stock trading account with IG UAE
- Search for penny stocks
- Choose the stock you want to buy
- Determine how many stocks you want to purchase
- Place your order
- Monitor your investment
FAQs about penny stocks
What are undervalued stocks?
Undervalued stocks are those that trade below their perceived or calculated intrinsic value. In other words, the stock is worth more than what stock traders pay for it.
Penny stocks are sometimes, but not always, undervalued.
What are multibagger stocks?
Multibagger stocks are those that provide significant returns on a stock trader’s investment. For example, an 8-bagger stock provides eight times the return.
They’re often associated with penny stocks, which have the ability to soar in value.
How do I trade penny stocks online?
To trade penny stocks online, find a reputable broker, like us, that offers penny stocks on its platform. With IG, you can open an account, check out our stock screener and hit the buy button when you’ve found the penny stock you want in your portfolio.
Alternatively, if you want to trade CFDs, you can pick a direction in which you think the stock will move and press the ‘buy’ or ‘sell’ button depending on your outlook.
Footnotes
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
- TradingView, April 2026
Important to know
This information has been prepared by IG Limited (DFSA reference No. F001780). It is intended for general information purposes only and does not take into account your personal objectives, financial situation or needs. It should not be regarded as investment advice or a recommendation. Trading CFDs carries a high level of risk and professional clients can lose more then they deposit. Please ensure you fully understand the risks involved and seek independent advice if necessary. All information is accurate at the time of publication and may be subject to change.
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