Before we look at the best penny stocks and dive into business profiles, let’s talk about how to trade this niche market.
The first thing to know when trading the best penny stocks is you have to be able to spot potential red flags and signs of fraud. First things first, if there is a caveat emptor sign. Or a skull and crossbones next to the penny stock’s name, well, yeah, maybe stay away.
Next, if a company suddenly starts skyrocketing on no legitimate news. As nice as that sounds, the stock is probably being manipulated. These are very small companies and even some with wonderful business models will not leap significantly overnight.
Penny stocks take time to mature because they are small operations. Check the charts and make sure the trades are not abnormal.
After that, do your own research and throw price out the window. The best penny stocks are speculative and pricing is notoriously spooky. Make sure you know the penny stock’s real value and that you have enough information to make a holistic decision about the company.
And yeah, let’s ponder the obvious question: why is the stock’s price so low? Investors have signaled that the shares are not worth much. Or the company has fallen on difficult times financially or business model-wise. So, know that information at the outset.
In short, read a little bit before you throw your money at a broker-dealer.
And about that money burning a hole in your pocket. Before you place it on a penny stock, it best not be your inheritance. It better be cash you can afford to lose. Statistically speaking, penny stock traders lose a lot more money than they make.
So, make sure you are ready to ride. Penny stocks require a person who can handle volatility. And oh yeah, if you are trying to trade penny stocks because you saw an ad on Youtube with someone flying on a private jet, stop right now. You are already in over your head.
Can You Get Rich Off Penny Stocks?
Ok, so you saw that video of that guy in the jet. He was once a loser at a desk and now he is eating caviar out of a football helmet. Sure. We have seen it as well.
It’s a real rags-to-Tyler Durden kind of story. But, we are here to tell you that if your BS meter did not flinch, well, this may not be right for you.
The short answer to the question is: yes. Yes, you can get rich trading penny stocks.
It is a low probability, though.
But, sure, you can get rich. Why? Sheer math. You are trading stocks that are worth pennies. Often you buy a lot of stock. If that stock goes to a dollar or even say $10, you can do pretty well.
For example, let’s say you own 1,000 shares of a company at a quarter. Your total investment is $250. Now, if that stock goes to $2.50, your $250 investment is now worth $2,500.
That was a sandbox example. But add a few zeroes in there and you will see the allure.
And while it may seem like a big hill to climb, it is not. Penny stocks have high volatility.
What Are the Best Penny Stocks To Invest In?
The answer to that question is simple: the one you have researched thoroughly. Do not invest in any penny stock company that you have not read financial about. Or know a lot about the sector. And the company’s peers and the technology, if there is any.
You should be passionate about the company and what they do. Penny stock investing where you know a lot about the industry is better. If you are an avid gemologist, you may know more about junior miners or precious metal companies.
Are you a person who knows a lot about cannabis? No judgment. Ok, then you might be able to spot a decent cannabis product.
Are you aware of a new video game that is going bonkers on the App Store? If that company is public, you may know something other people don’t.
Use these tools to make sound investment decisions.
Alright, we are ready to get down off our soapbox and talk penny stocks to buy and the top penny stocks right now.
What Are the Best Penny Stocks Right Now?
Drive Shack Inc. (DS)
Drive Shack is a company that combines golf with other forms of entertainment for an exciting social experience. Each of their locations features a professional golfing range with fun augmented reality features. They also offer a wide variety of other fun games as well as food and drinks.
Recently, Drive Shack announced a partnership with professional golfer Rory McIlroy to launch an exciting new entertainment brand called the Puttery. This new venture will focus on mini golf, and their first locations will open in summer 2021.
Drive Shack stock shot up when this partnership was announced. They’ve increased by more than 20 percent from the start of the year, and are now trading for over $3.
This company struggled last year due to the pandemic shutdowns, so this growth is very exciting for investors. As governments start to loosen health restrictions, Drive Shack will be able to reopen all of their facilities at full capacity. This could lead to an increase in revenue and continued share growth.
This exciting entertainment brand is one to keep your eye on moving forward into 2021, and it’s one of the top penny stocks on Robinhood right now.
AIM Immunotech (AIM)
AIM Immunotech is a small biopharmaceutical company with big ambitions. They have several intriguing drugs in their pipeline right now, many of which could treat very challenging health problems if they are successful.
One of their most exciting products is Ampligen. This product has already been approved by the FDA to treat chronic fatigue. However, the medical community is curious to see if it could be helpful for managing severe COVID cases.
Tests are currently underway in several countries right now to evaluate the viability of this option. Recent results from early-stage testing look promising, although the product still has a ways to go in clinical trials.
AIM Immunotech is also looking into using Ampligen to treat several different types of cancer. Their Alferon N Injection pipeline could be used to treat genital HPV, Influenza A, MERS, and other conditions, although they are still testing many of these options.
With so much going on, AIM Immunotech’s stock has gone up and down slightly over the past few months. Investors should keep an eye on AIM Immunotech’s product pipeline moving forward.
Meten Edtech Education Group Ltd. (NASDAQ: METX)
Meten Edtech Education Group is a Chinese education company that creates digital English training programs for its customers. They have three different subsidiaries, with programs that cater to both adults and children.
Since Meten’s programs are entirely online, they make English learning more accessible to people who can’t learn in person. They also use AI technology to enhance their programs.
There’s been huge demand for English education throughout China in recent years. The Chinese economy is growing quickly, and learning English gives Chinese professionals an easy way to communicate with others around the world.
Meten Edtech reported huge subscription numbers at the end of April, with a nearly 500 percent increase in both subscribers and gross billing numbers. If the company continues to grow at this explosive pace, it could mean huge returns for investors moving forward.
What Are the Most Popular Penny Stocks?
Allied Esports Entertainment (AESE)
Esports have taken the world by storm this year. As people haven’t been able to get together to play games in person, they have turned to the internet for entertainment and social interaction.
Allied Esports is a holding company that runs Allied Esports International and the World Poker Tour. They operate esports arenas around the world and coordinate events.
What makes this stock so exciting is their new streaming platform. They recently launched 24/7 esports programming to meet a huge increase in demand.
As a result, their stock price has spiked multiple times in the last few months. Even as the world recovers from the pandemic, esports and other forms of virtual entertainment will be here to stay. This esports company still has plenty of potential moving forward.
ENDRA Life Sciences (NDRA)
This biotech company’s shares skyrocketed in January after releasing a new patent. Their stock is now trading for over $2 per share, whereas it was trading for less than $1 per share before that point. They’ve been able to maintain growth up over the last few months.
ENDRA’s products use a combination of ultrasound and radio technology to detect liver disease in its early stages. Since liver disease can lead to other serious chronic health issues, there is a lot of interest surrounding this new patent.
The company’s most recent earnings report was a positive one, highlighting many important steps the company took to improve their bottom line. This included a sale of common stock in December that made $18.5 million.
This huge jump in share price is very exciting for investors. Only time will tell if it will lead to an increase in sales, but for now, this is a penny stock to keep your eye on.
Gran Tierra Energy (NYSE: GTE)
Gran Tierra Energy is a Canadian oil and gas company with operations in South America. Specifically, they have oil production facilities in Colombia and Ecuador.
While the energy sector can be quite volatile, there are reasons to be excited about oil and gas companies right now. COVID-19 restrictions around the world are loosening, which means that people will be driving more frequently. Oil demand and oil prices could go up as a result.
For Gran Tierra, these looser restrictions have meant an increase in production in recent months. This shows that the company is resilient and has a business model that can bounce back from challenges.
Gran Tierra stock started moving up slightly at the end of April. Investors seem excited about the possibility of a continued increase in production.
What Are The Best Penny Stocks To Buy?
Color Star Technology (CSCW)
As the Chinese market is growing, many American investors have been diversifying their portfolios with Chinese stocks. One interesting Chinese penny stock to keep your eye on is Color Star Technology Co. They are a company that focuses on AI and virtual reality – two exciting technologies that are highly sought after right now.
Most recently, Color Star has been working with app developers to create virtual reality concerts. VR experiences like this are particularly appealing right now, since concerts are not allowed under current restrictions in most parts of the world. Color Star also creates immersive online music education programs.
They launched the Chinese version of their Color Star app in September 2020 and followed up with an English version in December. This innovative entertainment app is subscription-based and offers a library of performances, celebrity classes, and other content from popular influencers.
Color Star recently used a unique strategy to raise $26 million. They decided to price their shares at a premium of $1.30 each to do so. They plan on using the money to improve their AI and virtual reality technologies.
While this stock is cheap right now, it has huge potential to grow as the app builds its subscription base. Color Star has already managed to build up a solid subscription base in just a few months, setting the stage for ongoing growth throughout the year.
BGC Partners (NASDAQ: BGCP)
BGC Partners are a brokerage company that runs several brands in the fintech space. The fintech industry has boomed this year, as both businesses and individual consumers sought out contactess payment options.
They run several different brands, which provide a variety of services for the financial sector. In addition to fintech, they provide analytics and data for their clients.
This company and its subsidiaries have been steadily growing over the past year. Out of all of their subsidiaries, Lucera and Capitalab have grown the most. As a whole, the company now has a market cap of $2.02 billion.
BGC Partners stock has steadily increased in price over the past year, with a consistent jump from October to December and another large jump in February.
Having a large portfolio of subsidiaries helps to minimize BGC’s financial risk. Since some of their brands have been on a steady growth trajectory, it protects them financially in the event that another one of their brands struggles.
The Best Penny Stocks: Final Thoughts
That rounds up my best penny stocks in the market right now.
The market is always shifting and we will be looking for more stocks that we think have value as we move into a new season. Volatility is certainly ahead for the markets, so these picks are safer than some others. Did we miss any stocks that you like? Let us know in the comments.