Stocks you can buy for $5 or less are often called penny stocks, even though you need a bit more than a few pennies to buy them. While they're not often cheap by traditional valuation metrics, their low share prices make them attractive to many beginning investors. However, for every penny stock that hits, there are dozens of others that don't go anywhere.

While many are start-ups, others are formerly successful companies that have fallen on hard times. Some may bounce back, others won't. But here are a couple of stocks trading under $5 with solid growth prospects.

Waitr Holdings

Waitr Holdings (NASDAQ:WTRH) is a food delivery company whose stock has enjoyed a meteoric rise thanks to the COVID-19 lockdown economy. At the start of this year, it was trading at $0.35 per share, but its share price of $4.61 at Monday's close gives it an increase of just over 1,200% year to date.

The Louisiana-based company allows people to order food from the restaurant of their choice either online or through an app. It serves cities throughout the South, from Texas to Virginia. Waitr has benefited from its focus on small and mid-sized markets, not just serving the big cities that rivals like DoorDash and GrubHub tend to dominate. In these smaller southern markets, Waitr typically is first or second in market share.

A man wearing a mask and gloves making a food delivery

Image source: Getty Images.

But there's reason to believe that Waitr will continue to grow, even as states have reopened and relaxed restrictions on restaurants. Trends indicate a growing demand for delivery services, perhaps accelerated by the pandemic.

The other reason it could be a good investment is that it has turned itself into a good buyout candidate in a consolidating food delivery market. In June, European company Just Eat Takeaway announced plans to buy GrubHub, and Uber Technologies, which owns Uber Eats, made a deal to buy delivery company Postmates in July.

Waitr is an attractive target because it provides direct access to those smaller markets that the big companies don't serve as much. Plus, in addition to its rising stock price, Waitr saw revenue rise in the second quarter from $51.3 million to $60 million year--over-year and for the first time become profitable, with net income of $8 million.

Genius Brands International

Genius Brands (NASDAQ:GNUS) has been busy this summer. The children's entertainment company launched a new network in June, the Kartoon Channel, a video-on-demand (VOD) platform. Targeted to kids from age 2 to 11, it will be available in over 100 million U.S. households and on 200 million mobile devices through various outlets.

Unlike other VOD platforms, it is free, supported by ads. After its launch, the stock skyrocketed from about $1.50 per share to almost $8. It has since come back to earth, currently trading back at $1.55 per share -- but it's still up some 468% year to date.

With this stock, you definitely have good and bad. First, the good.

Genius signed deals with Walmart and Amazon to sell toys from one of its shows, Rainbow Rangers. In July, it signed a deal with Stan Lee's POW Entertainment to create the Stan Lee Universe, through which it plans to develop content from the "over 100 original, heretofore unexploited properties" created by Lee, Chairman and CEO Andy Heyward said. These will be characters outside the Marvel Universe -- characters like Tomorrow Men, Stringbean, Black Fury, and Virus. Genius Brands will develop and license seven properties per year. The first property is Stan Lee's Superhero Kindergarten, with the main character voiced by Arnold Schwarzenegger, who is also an investor in the company. The head writer is Steven Banks, former head writer for SpongeBob SquarePants. It will launch on Amazon Prime in the U.S. and Alibaba in China in the spring of 2021. Also, the company also has a publishing agreement with Archie Comics for the Stan Lee Universe.

The bad news is, Genius Brands has struggled to generate revenue and his not profitable. In the second quarter, post the Kartoon Channel launch and the Stan Lee deal, revenue increased 20% to $560,000. But expenses are high and the company reported a net loss of $2.3 million in the quarter.

However, the balance sheet is strong and the company has boosted its cash position to $54 million, up from $305,000 at the start of the year, due to an infusion of investor cash. Plus, the company eliminated its debt and has the capital position to grow. Heyward said the company expects to start seeing returns from these investments in the first part of 2021, when the first of the Stan Lee shows launches.

So, at this point, Genius Brands is pretty speculative, but with its cash position and the new content and distribution platforms in place, it is a penny stock worth watching. A big if is if these new investments can generate revenue. Keep an eye over the next few quarters for revenue growth following the launch of the Kartoon Channel and these new properties to look for positive momentum.