Penny Stock Screener
Most penny-stock lists rank whatever moved most today. This one starts from the opposite question — which of these companies can still fund itself next year — because at this end of the market that is what usually decides the outcome.
How the score is weighted — Microcap Survivors
What counts as a penny stock?
There is no single definition, which is part of the problem. US regulators generally treat anything under $5 a share as a penny stock. In everyday use most people mean something under $1. In the UK the term simply covers anything quoted in pence.
Share price alone is a weak way to define the category. A company can have a $2 share price and a perfectly real business, or a $40 share price and almost nothing behind it — the price tag mostly reflects how many shares happen to exist. What actually makes these companies behave alike is size.
So st-ox screens on market value rather than price: roughly $50M to $500M, converted and scaled for each of the twelve markets it supports. A share-price floor is still applied, but for a specific reason covered below — not as the definition.
This follows directly, and is worth stating before you run it. Share price and company size are only loosely related — a $400M company might be ten million shares at $40 or four hundred million shares at $1 — so screening for small companies does not return a list of low-priced shares.
In practice, on the US market the median result sits around $10 and only about a quarter come in under $5. London runs genuinely cheaper, with most of its list under $5; Tokyo looks much like the US. What you will not see is a column of sub-dollar tickers. That is the screen working as intended rather than failing — but if a low share price is specifically what you are looking for, this is the wrong tool, and the section above explains why we think it is the wrong thing to look for.
Why this end of the market is so unforgiving
The usual explanation is that small companies are risky because they are volatile. That is true but not very useful, because it suggests the answer is simply to hold on through the swings. The real difficulties are structural, and holding on does not fix them.
1. Dilution — the one that catches most people
A company that spends more cash than it brings in has to get that cash somewhere. For a business this size, the bank is rarely an option and the bond market is not available, so the answer is almost always to issue new shares.
When it does, your holding stays the same size while the company gets bigger in share count — so your claim on it shrinks. This is why a microcap can grow its revenue nicely for three years running and still leave shareholders down: the business grew, and the number of slices it was cut into grew faster. Nothing on a price chart shows this happening.
2. Running out of road
Dilution is the symptom; the cash balance is the cause. When a company that burns cash gets low, it raises on whatever terms are available — which, by definition, are worst exactly when it needs the money most. That is the difference between a company that may raise capital and one that must.
3. Delisting and reverse splits
US exchanges require a minimum bid price of around $1. A company that stays below it gets a deficiency notice and a limited window to fix things. The usual remedy is a reverse split — ten old shares become one new one, so the quoted price multiplies by ten while the business is unchanged. The chart resets and looks respectable again, and a stock that has done this repeatedly can appear far healthier than its history warrants.
4. The spread is a real cost
In a thinly traded share, the gap between the price you can buy at and the price you can sell at can be several percent. You pay it going in and again coming out. A strategy that would work on paper can fail on that alone, which is why any usable screen at this size has to filter on how much actually trades — not just on how good the company looks.
5. OTC and the pink sheets
Much of the penny-stock universe does not trade on a major exchange at all. On the OTC tiers, reporting requirements are far lighter — some companies file very little, and the numbers a screen depends on may be stale or missing entirely. It is also where promoted shares concentrate. st-ox excludes these outright on the US market, covering NYSE, NASDAQ and AMEX only.
These five points are not reasons the category is impossible — they are reasons a screen built on price movement is the wrong tool for it. A list sorted by today's biggest gainers selects for the companies most likely to be promoted, most likely to be diluting, and least likely to still be listed in three years.
Cash runway: the number the screen leads with
Runway answers a single question — how long can this company keep going before it needs money? It is calculated from cash and short-term investments divided by the current rate of burn, and expressed in quarters:
| Shown as | Meaning |
|---|---|
| FCF+ | The company generates cash rather than burning it. It needs no runway, and no raise is being forced on it. |
| 8q and above | At least two years of funded operations at the current burn. This is the minimum st-ox accepts. |
| 4–8q | One to two years. A raise is foreseeable rather than imminent. |
| Under 4q | Under a year. At this point new shares are not a risk, they are a schedule. |
The figure stops counting at twelve quarters, so 12q should be read as "at least three years" rather than exactly three. Note also that a company which does not report the figures needed to calculate this is excluded rather than given the benefit of the doubt — on a screen whose whole premise is knowing that a company can fund itself, an unknown is not a pass.
The hard gates
These are pass/fail. Cash amounts are converted into each market's own currency, so the same standard applies everywhere:
The four factors
Whatever survives the gates is scored 0–100:
Cash runway against the current burn, current ratio, low debt, and whether the company generates cash at all — can it fund itself without issuing stock?
Return on invested capital, gross and free-cash-flow margin, and low net-debt-to-EBITDA.
Price-to-book and price-to-sales. Earnings-based ratios are deliberately absent — most companies this size have neither positive earnings nor positive cash flow, so a PEG or price-to-free-cash-flow leg would be blank on nearly every row.
One-year relative performance and position against the 52-week high, on wider bands than the large-cap screens use, because microcaps swing harder.
There is deliberately no growth factor. Year-on-year growth off a tiny base is mostly noise, and it is not the question that decides the result down here.
What the screen deliberately will not do
- Rank by today's movers. That selects for exactly the wrong things. Price action appears only as the smallest of four factors.
- Include OTC or pink sheets. Covered above — the data is unreliable and the promotion is concentrated there.
- Go below about a dollar. Beneath that line, listing rules rather than the business start driving the outcome.
- Cap the share price. There is a floor at roughly a dollar and nothing above it, so plenty of results are $10, $20 or more. Price is not what makes these companies behave alike, so using it to select them would drop good businesses for an irrelevant reason.
- Return a long list. Most of this universe is meant to fail these gates. A market returning one or two names is telling you something real, not misbehaving.
What it still cannot see
A screen reads reported figures, and there are things no set of ratios will show you. Before acting on any name from a list like this, the filings are where the answers are: the share count history over several years, which is where past dilution actually shows up; whether the auditor has raised going-concern doubt; any at-the-market offering or shelf registration already in place, which is permission to issue shares that has already been granted; and the ordinary qualitative questions of management, competition and litigation.
The screen is a way of narrowing a few thousand companies down to a couple of dozen worth that effort. It is not a substitute for it.
Related
The same engine runs three other presets — see the GARP screener for the quality-growth version and how the scoring works in general. For timing an entry once you have a name, the dip-buy signal is applied to every ticker in the app, including these.
Frequently asked questions
What is a penny stock?
Why are the results not all under $1?
Are penny stocks a good investment?
What is cash runway and why does it matter so much?
Does the screener include OTC and pink sheet stocks?
Why does the screen exclude shares under about $1?
Is the penny stock screener free?
Run the microcap screen in st-ox
Pick a market, choose the Microcap Survivors preset, and get a ranked shortlist with cash runway, balance sheet and valuation on every row. Free, no ads.
Open st-ox free →For information and educational purposes only. Not investment advice, and not a recommendation to buy or sell any security. Microcap and penny shares carry a high risk of permanent loss. Screen results are a starting point for your own research.