You may have heard of penny stocks but don’t be confused, these stocks don’t cost one cent. Any stock that costs less than 5 dollars is considered a penny stock. Our picks for the best penny stocks are just a small sampling of what’s available. If you include OTC markets, there are hundreds of penny stocks currently available on public exchanges.
For even more low-priced stocks, be sure to check out our other hot stock picks, including the best stocks under 1 dollar; the best stocks under 5 dollars; and the best stocks under 10 dollars. These articles are great places to start for traders searching for cheap stocks.
Best Penny Stocks: Our Top Picks
These are our picks for top penny stocks this month. These low-priced stocks are all listed on major exchanges, like NASDAQ and the New York Stock Exchange. Our best penny stock picks include micro-cap stocks. If you’re only interested in small-cap or larger, check out the best stocks under 5 dollars; featuring stocks with market caps of no less than $300 million.
Without further ado, I present to you The Stock Dork’s best penny stocks of July 2019.
Hexo Corp. (HEXO)
The sixth-largest cannabis producer in Canada, Hexo supplies cannabis to Quebec, Canada’s second-most populous province. Hexo has a partnership with Molson-Coors (TAP) to produce cannabis-infused beverages, and the company signed the largest provincial supply contract in Canadian history this year.
This stock has had a rough run, but its long-term prospects are good. Like most cannabis stocks, HEXO has seen significant declines over the past month or two. However, it could be a buying opportunity for patient investors. Bank of America’s analyst Christopher Carey picked Hexo as his number one cannabis stock earlier in the year.
Hexo is trading right under 5 dollars so, technically, it might not be a penny stock for long. However, this stock could potentially be a great value at these prices. The company’s supply contract with Quebec will provide Hexo with stable income for years to come, and the company is discussing expanding into other markets.
On the technical side, Hexo is showing some signs of bottoming. Share prices have consolidated around $4.90, but where it goes from here is any one’s guess. The entire cannabis sector will likely need some kind of catalyst to get it running again, but HEXO could be one of the best long-term plays in the space. At less than 5 bucks, this stock is a solid value and could be an opportunity or patient investors.
Intevac, Inc. (IVAC)
Intevac makes ‘vacuum deposition equipment’ that is a key component in high-precision optical equipment. Its flagship products include things like night vision goggles and high-sensitivity digital sensors. IVAC operates two business segments: Thin Film Equipment develops photo processing systems; and the company’s Photonics segment provides high-precision optical equipment, like night vision goggles, to defense clients.
The company recently landed a $40 million contract award from the U.S. Government for the production of night vision goggles, representing the largest single booking to date for the micro-cap firm. IVAC is trading around 1.0x price/sales, which is better than the industry average of 1.3, and EPS growth is expected to be strong next year.
This stock has both value and growth characteristics. It could be a great speculative pick with a lot of upside potential.
Looking for some exposure to the Internet of Things (IoT) industry? Lantronix sells IoT assets to consumers across the U.S., Europe, the Middle East, Africa, and the South Pacific. The company offers both IoT gateways and IoT building blocks.
The IoT industry is expected to grow significantly over the next few years, and LTRX could be a big beneficiary of the sector’s projected expansion. The company makes quality products that have been recognized as some of the best in the industry. In addition, LTRX is profitable and priced at a value. Its price to book ratio is hovering around 2.0 and the company is forecasting earnings to grow by over 30% next year.
The stock recently took a big hit when the company announced the acquisition of two small companies, Maestro and FALCOM Holdings Limited. However, the drop could be a buying opportunity if the buyouts work out for Lantronix.
If you’ve been looking for IoT exposure in your portfolio, this cheap stock could be exactly what you’re looking for. Plus, Lantronix is small enough that it still has tons of room to grow and the stock could see big gains if the company continues to execute.
Tile Shop Holdings (TTS)
Tile Shop Holdings shareholders went from feast to famine in 2019. This specialty stone and tile retailer took investors on a wild ride in 2019. It opened the year gaining over 36% in just a month, but it didn’t last long. Reported weakness in the housing industry rapidly swung sentiment to the downside, and the stock is since down 76% from its previous 2019 highs.
However, the downward move may have been overdone. Share prices have held to support at $4, and the stock is starting to look pretty appealing from a valuation perspective. Price to book is less than 2.0, and the price to sales ratio is less than 1! In addition, this stock pays a 4.84% dividend yield.
Proceed patiently. TTS is reporting earnings on July 23, and the firm is expected to report an earnings decline. Expectations are low and this stock has been beaten up, so It could be a positive catalyst if Tile Shop reports better-than-expected results. But, if the report is worse than expected, the Tile Shop could have more declines in its future.
If you like this stock, it could be smart to wait until after the earnings report to enter into a position.
Best Penny Stocks: Closing Thoughts
Now that you’ve seen our picks, here are some things you should take into account before making any investment decisions.
How To Find The Best Penny Stocks
If you’re interested in finding your own penny stocks, a stock screener is a great place to start. We’ve listed 5 of our top picks for the best penny stocks, but it’s a big market out there filled with lots of opportunities that you may be like even better than the picks here. You can find the best penny stocks for yourself using a stock screener.
Stock screeners help traders find stocks that meet a predetermined set of criteria. They are like search engines for stocks. If you’re not sure where to find a stock screener, check out the free one on Finviz. It has enough features to meet the needs of most retail investors and its free. Check out the free Finviz stock screener here.
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