The list of companies you can buy for $5 is undoubtedly shorter today than it was 10 years ago. However, there are always plenty of stocks that trade at such low prices.

Robinhood investors seem to especially like cheap stocks. Of the 100 most widely held stocks on the trading platform, 14 of them have share prices below $5. While these stocks are popular among Robinhood investors, I wouldn't touch many of them with a 10-foot pole. There are only two Robinhood stocks under $5 I'd even consider buying right now.

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A process of elimination

I'm at least somewhat familiar with over half of the stocks with share prices below $5 that currently rank in the Robinhood top 100. Two of them are Canadian marijuana stocks that face declining sales and a tough market environment -- OrganiGram and Sundial Growers. I think that OrganiGram is worth watching, but the headwinds for both companies make it relatively easy for me to check them off the list.

Other cheap Robinhood stocks that I'm familiar with are unattractive for various reasons. For example, Zomedica's Truforma diagnostic platform for animals is promising, but it's way too early to know if it will be the commercial success the company hopes it will be.

There are also several of the cheap Robinhood stocks that I don't know much about. Maybe I'm being too hasty in eliminating them from consideration, but there's some wisdom to investing legend Peter Lynch's advice to invest in what you know.

So which two stocks would I consider buying? Senseonics Holdings (SENS 2.16%) and Tonix Pharmaceuticals (TNXP 0.82%).

Why Senseonics and Tonix stand out

Senseonics and Tonix catch my eye for two main reasons. First, both companies have products that could be big winners over the long run. Second, their valuations aren't ridiculous in light of their prospects.

Nearly 1.6 million Americans have type 1 diabetes, which requires close monitoring of their glucose levels. Senseonics' Eversense is an implantable continuous glucose monitoring (CGM) system that can be used for 90 days. The company is awaiting U.S. approval for a 180-day sensor. Leading diabetes-care company Ascensia Diabetes Care (ADC) co-markets Eversense with Senseonics. 

Senseonics only expects to generate around $15 million in sales this year. However, it anticipates revenue of between $150 million and $200 million by 2025. The company's market cap currently stands around $900 million. I think it's possible that increased adoption of Eversense could make Senseonics a long-term winner.

Tonic doesn't have a product on the market yet. However, the drugmaker expects to report results from a late-stage study of TNX-102 SL in treating fibromyalgia later this year. This could set the stage for a potential regulatory filing in 2022. The chances of success with this late-stage study appear to be pretty good, considering that Tonix has already announced positive results from another phase 3 study of TNX-102 SL.

The drugmaker's pipeline also includes other intriguing programs. Tonix hopes to advance a couple of programs into phase 2 testing this year -- TNX-601 CR in treating major depressive disorder and TNX-1300 in treating cocaine intoxication. It also anticipates the initiation of a phase 1 study of COVID-19 vaccine candidate TNX-1800 in the first half of 2022. While this vaccine is a latecomer, it might be able to provide long-lasting protection against coronavirus infection with a single shot.

Tonix's market cap of around $327 million makes it the smallest company on the Robinhood top 100 list. I suspect that positive results for the company's late-stage study of TNX-102 SL or any of its other pipeline candidates would provide tremendous catalysts for this clinical-stage biotech stock.

My waffle word

Note that I only said that Senseonics and Tonix are the only two Robinhood stocks trading at under $5 per share that I'd consider buying right now. My use of the waffle word "consider" was intentional.

Both Senseonics and Tonix are risky. There's no guarantee that Eversense will achieve the sales that Senseonics and ADC expect. Tonix's experimental drugs and vaccines could flop in clinical testing.

Because the two companies are unprofitable, they also must frequently look at alternatives for raising more cash. This is especially the case for Tonix since it isn't generating revenue and its research and development costs are increasing.

I'm not at a point where I'm ready to buy either of these cheap Robinhood stocks. However, if they deliver on their potential, Senseonics and Tonix might not be so cheap in the future.

Editor's note: We have removed the mention of Rolls-Royce from this article because the writer referred to the wrong company. The publicly traded Rolls-Royce Holdings is an industrial technology company.