The S&P 500 ($SPX) was barely in the red on Tuesday, down 0.2% on the day. With war, it’s not a bad day.
That said, it was volatile, ranging from a high of 6,845.08 to a low of 6,759.74, closing at 6,781.48 for the day. It is now down to about 1% in 2026.
There were 119 new 52-week highs and 157 new 52-week lows on the NYSE and Nasdaq yesterday. As daily numbers go, it’s pretty good. Typically, in 2026, both the 52-week high and low are in the hundreds. This suggests that investors are not sure where the market is headed.
Among the 157 new 52-week lows, I thought I’d focus on penny stocks. On the Nasdaq, there were 79 penny stocks ($5 or less) and 8 on the NYSE. Aside from those under $1, three stood out as potential bets for extreme risk takers.
Here’s why.
Biote Corp. (BTMD) Yesterday it hit a 52-week low of $1.68. It was the 22nd in the last 12 months. Its share price is down 35% in 2026.
Biot operates a scalable practice building platform in the hormone optimization sector to implement personalized hormone replacement therapy (HRT) programs for certified practitioners.
The company’s tools include professional education and certification, practice and inventory management software, HRT product sourcing, and marketing support, complemented by a proprietary line of dietary supplements.
It makes money in two primary ways: fees for using the company’s biotech tools and revenue from sales of its proprietary dietary supplements.
Why is the stock down 35% in 2026 and 59% over the past year? We’ll know more after it reports Q4 2025 results after markets close today.
The company adopted a new organizational structure in May 2025 to accelerate growth in the number of new specialists, strengthen relationships with existing doctors’ clinics, and improve its financial position.
More work in progress — it brought in a new CEO in February 2025 — has restructured its business team to focus on those priorities.
It’s worth noting that despite the turmoil and the decline in revenue, it’s profitable — gross profit margin for the first nine months of 2025 was 72.6%, up 250 basis points from a year ago — generating an operating profit of $37.3 million in the 12 months ending September 220, 2023.
Based on trailing 12-month free cash flow of $34.4 million and an enterprise value of $140.5 million, according to S&P Global Market Intelligence, it has a high free cash flow yield of 24.5%. I consider anything above 8% to be value territory.
Less than $2 and useful, a Hail Mary can’t hurt.
KinderCare Learning Companies (KLC) It hit a new 52-week low of $3.20 yesterday. This was the 40th incident in the last 12 months. Its share price is down 26% in 2026.
Of the three penny stocks, KinderCare is the name I am familiar with. Founded in 1969, it is the largest private provider of high-quality ECE (Early Education and Child Care Services) in the United States by number of students. It serves children from 6 weeks to 12 years through 1,500 early childhood education centers, with a capacity of more than 200,000 children.
I can remember a friend of mine years ago who was very important in the first three years of a child’s life. KinderCare relies on it.
KinderCare went public in October 2024, selling 24 million shares at $24 each. It used most of the $535 million in net proceeds to pay down some of the $1.5 billion in long-term debt.
As you can tell from the IPO price – down 87% in 17 months – a lot has gone wrong since going public. Either that, or it was overvalued at its IPO.
The first place I looked for answers was its Swiss-based private equity owner, Partners Group, which acquired KinderCare in July 2015 for an enterprise value of $1.5 billion. At that time, it had 1,400 centers in 38 states, operating under the KinderCare, CCLC (Children’s Banners) and Education Ban centers. It was the largest US private equity buyout in its history.
Typically, private equity firms like to buy businesses at a significant profit and then exit their positions through an IPO or sale within a few years. In this case, it took 9 years to reach an IPO, in large part because COVID got in the way.
However, from a low of $1.37 billion in 2021, its top-line sales increased 96% to $2.69 billion in the 12 months ending September 30, 2025. In the same period, it went from an operating loss of $93 million to an operating profit of $30.4 million.
The big problem for KinderCare was its Q4 2024 report, its first as a public company. The company lost $92.8 million on a GAAP basis because of $123 million in stock-based compensation. Investors were not prepared for such a high number.
But actually, the shares have gradually fallen from $17.68, the closing price the day before the bad news was announced, to a little over $3 today.
The reality is that businesses do not have a high return on capital. Since the beginning of 2020, the highest ROC rate in 2023 was 2.1%. With annual capital expenditures averaging $130,000, this is not an asset-light business model.
Why take a chance?
In December, the company announced the return of Tom White as CEO. Witt led the company for 12 years from 2012 to June 2024. He owns 4.4 million shares of KinderCare, making him the company’s fourth largest shareholder.
The partners want to exit their nine-year investment. White could be the change needed to get the share price out of the money stock situation.
Apartment Investment and Management Company (AIV) Yesterday it hit a 52-week low of $4.21. It was the 19th in the last 12 months. Its share price is down 29% in 2026.
The latter is the largest of the three by market cap. It will also have the shortest shelf life as a public company.
In November 2025, the multifamily residential property owner announced that it would proceed with a transition plan to fully liquidate its assets from the REIT and wind down the business. The decision was made following a strategic review of its business.
As the company said in early January, it expects the liquidation sale to generate between $5.75 and $7.10 per share for shareholders.
On March 13, it will make its initial distribution of $1.45 per share. That’s up from $520 million in property sales in December. It has contracts to sell properties worth $680 million in Chicago, Nashville, New York City, and Aurora, Colorado. This would result in a dividend of between $0.85 and $0.95 per share. This should be done by the end of June.
So, assuming the company’s dividend yield is on the lower end of estimates, it still has $4.75 to pay.
If you buy a share now at the current price of $4.24, you can get $5.70 a share ($4.75 plus the high end of the $0.95 distribution) once it’s done, a return of 34%. If it makes all the distributions at the end of the year, that’s an annual return of 43%.
Probably depends on the sales prices. If liquidation takes too long, your returns decrease by the day.
Do you feel happy?
As of the date of publication, Will Ashworth had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
