While it’s true that trading penny stocks is inherently risky, there’s also an opportunity for making massive returns. Some penny stocks are set to explode, and if you can spot them before they take off, you could stand to gain a lot. Follow along for our picks for the best penny stocks to buy now and a breakdown of each company on our list.
The key is taking advantage of their volatility and getting in before a stock’s price swings up and getting out before it drops.
But what penny stocks should be on your radar?
Check out our list of top penny stocks to buy now to find out.
Penny Stocks that Could Take Off
DiDi Global Inc. (NYSE: DIDI)
DiDi Global provides rideshare services through its mobility technology platform.
A global leader, its app-based services extend across Asia, Latin America, and Africa.
These services include chauffeur, ride hailing, taxi hailing, auto solutions, delivery, and transportation.
In turn, the company provides much-needed driving jobs in these parts of the world.
Although still carving out a niche, DiDi already sees more than 490 million users per year.
Competing with the likes of Uber and Lyft, DiDi has made a statement in parts of the world where these rideshares aren’t prevalent.
DiDi does hope to move into Europe and North America in the near future, greatly expanding its area of influence.
Taseko Mines Ltd. (NYSEAMERICAN: TGB)
Taseko Mines has over 55 years of experience in the exploration and extraction of minerals.
Its mines are almost exclusively located in British Colombia, with one mine outside Phoenix in Arizona.
Through these mines, Taseko brings in large amounts of copper and molybdenum.
The company brought in 140 million pounds of copper and 2.5 million pounds of molybdenum in the last year alone.
Taseko has a majority of complete ownership in all the mines it serves.
As far as financials go, Taseko was able to increase revenue, net income, and earnings per share across the board.
These initiatives have pushed share prices up 200% over the last two years, and Taseko hopes to drive things up even further.
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Penny Stocks to Watch in 2022
Professional Diversity Network, Inc. (NASDAQ: IPDN)
Professional Diversity Network helps connect businesses with potential employees.
Employers can post jobs on the site, and applicants can view what’s available.
Professional Diversity Network’s services are looking more and more relevant as the pandemic persists, which could allow it to grow quicker than expected.
The company reported that its market had expanded by three to five times since the pandemic began.
Share prices are down currently, but financial numbers are all moving in the right direction.
Some key takeaways are that revenue was up 28%, net income 91%, and net profit margin 93%.
It’s still operating at a loss, but the company’s recent reports show that it might be turning a corner — though only time will tell.
If the company can continue its momentum, its stock price could follow.
Phunware Inc. (NASDAQ: PHUN)
Phunware is an Austin-based tech startup with offices in Miami, Irvine, and San Diego.
Its products help companies develop apps and other software for their audiences.
Some of Phunware’s features include audience monetization, location services, analytics, content management, and more.
The tech venture also looks to blockchain technology through two crypto products — PhunToken and PhunCoin.
PhunToken is a mobile loyalty program that businesses can use to reward customers and keep them coming back.
PhunCoin is a consumer-facing blockchain program that rewards consumers for voluntarily sharing their data.
Its stock price shot up in October 2021, reaching about $8 a share before falling back down.
Phunware’s stock price is on a downward trend, but it’s still 50% higher than last year.
Although it may be a penny stock now, it could grow dramatically if companies implement its solutions on a broader scale.
Palatin Technologies (NYSE: PTN)
Palatin Technologies is a rising star in the biotech sector.
The company has a broad spectrum of drugs it’s in the process of developing at present.
It has already received FDA approval for Vyleesi®, designed to treat women with generalized Hypoactive Sexual Desire Disorder.
As a result, Palatin has a source of revenue to fuel its future projects.
Other pipeline projects address dry eye, diabetic retinopathy, and inflammatory bowel diseases.
Gross product sales for Vyleesi® are up almost 89% from last quarter.
With all it has currently in place, Palatin Technologies looks like it could have a bright future, especially if its newest drugs see the same success as its flagship product.
Transocean Ltd. (NYSE: RIG)
Transocean Ltd. is one of the largest offshore drilling companies in the world and is based out of Vernier in Switzerland.
The company uses rig-based well construction services with trained staff, innovative technology, and quality equipment to locate oil.
It tends to focus on demanding environments where other drillers do not go.
Each of Transocean’s 37 rigs can drill as deep as 40,000 feet below the water’s surface to access hard-to-reach areas.
Ten harsh environment rigs can travel to the most remote sections of the ocean.
Transocean also works to take care of the Earth, with plans to reduce greenhouse emissions by 40% before 2030.
Share prices have been a bit up and down of late, currently sitting just a bit lower from last year.
The drop is likely from a recent earnings report that showed a miss in earnings per share and revenue numbers.
With expansion and sustainability at the forefront of Transocean’s business model, this could be an excellent opportunity to buy the dip before share prices head back up.
Hottest Penny Stocks to Buy Today
Gran Tierra Energy Inc. (NYSE: GTE)
Gran Tierra is an energy company headquartered in Calgary that explores and produces oil and natural gas in Colombia and Ecuador.
Gran Tierra uses its technology to harvest resources safely and responsibly through three locations in these two countries.
In addition, it is also working hard to provide sustainable practices that do not affect the ecosystems its teams are working in.
The company’s stock has performed well from 2021 going into 2022, but it’s not a surprise given the success that the oil industry has seen lately.
Right now, the stock is up about 60% over the past year.
Gran Tierra announced that it plans to allocate 70% of its 2022 capital program to bolster its core assets, including $70 million to develop its Acordionero field, $40 million toward its Costayaco field, and $30 million to its Moqueta field.
Only time will tell if this investment pays off, but investors who get in now could see solid returns if these developments fortify Gran Tierra’s exploration capabilities in the long run.
Snipp Interactive Inc. (OTCMKTS: SNIPF)
Snipp Interactive is a global marketing venture looking to combine SaaS technology with expertise.
The company further looks to build meaningful relationships with clients to preserve long-term growth for both sides.
Through various building blocks, Snipp sets the stage for customer acquisition, retention, and engagement.
Snipp uses contests, promotions, rebates, and rewards to keep customers coming back.
As data rolls in, it provides the insights and analytics needed to understand what’s working and what isn’t.
While Snipp is still very much in penny stock range, it has shown significant growth over the last year.
Substantial revenue and net income numbers over the last year also bode well for the company moving forward.
What Is a Penny Stock?
As defined by the Securities and Exchange Commission, penny stocks are defined as stocks that trade for $5 or less.
These stocks are characteristically more volatile because they have low liquidity.
Should You Buy Penny Stocks?
Whether or not you should buy penny stocks mostly depends on your risk tolerance and your general attitude as an investor.
Do you have money you’re willing to lose, and can you stomach a serious loss?
If so, you might have the temperament to start trading penny stocks.
There’s a lot of trial and error with this investment style, so you’ll need to learn how to study the markets and weed out legit stocks from scams.
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 you have not studied.
This is especially true if you want to start day trading penny stocks.
It’s also helpful to know a lot about the company’s sector and its main competitors.
If you are an avid gemologist, you may know more about junior miners or precious metal companies.
If you know a lot about cannabis, you might be able to spot a decent cannabis product.
Can Penny Stocks Explode in Value?
Penny stocks can explode in value, but most are duds.
Unless you’re a penny stock pro like Timothy Sykes, you might want to temper your expectations.
Cheap stocks are typically high risk, so proceed with caution or you might end up stepping into pump and dump schemes.
How Do Beginners Invest in Penny Stocks?
If you want to trade on the penny stock market, you’ll need a broker.
There are plenty of great online brokers to choose from, but we recommend starting your search with Robinhood and Webull.
These are great places to find stocks listed on major exchanges like the New York Stock Exchange and Nasdaq.
A quick note, neither platform allows you to trade OTC stocks.
Our stock picks are listed on major exchanges, so accessibility shouldn’t be a problem, though.
These brokers do not charge trading commissions.
Buying Stocks that Could Blow Up on Robinhood
The Robinhood trading platform caters only to these exchanges and does not have any listings from over-the-counter markets.
Robinhood is also quite user-friendly and great for those diving into the stock market for the first time.
So if you’re new to investing, you might want to pick them as your first brokerage account.
Is Robinhood Safe for Penny Stocks?
Robinhood is a safe platform; however, there have been some security concerns from users since its latest hack.
Buying Stocks that Could Blow Up on Webull
Webull’s user interface is a bit more advanced and may take some getting used to if you are new to the game.
If you want to trade on the OTC market, you’ll want to look for a broker like Fidelity.
Is Webull Safe for Penny Stocks?
Webull is a safe platform to trade penny stocks on.
Final Thoughts on the Best Penny Stocks
Trading penny stocks could be a solid investment strategy if you do your due diligence and have the risk tolerance to offset your losses.
Still, there are no guarantees in investing, which is especially true for trading penny stocks.
These are very volatile investments that can skyrocket or plummet overnight.
That being said, savvy investors who execute proper market timing can take advantage of this volatility and get out before a stock crashes.
At the end of the day, if you want to make money trading penny stocks, you’ll need a lot of patience and persistence.
Top Penny Stocks FAQ
Take a look at our answers to the most commonly asked questions about buying penny stocks.
Is It Profitable to Buy Penny Stocks?
It can be profitable to buy penny stocks, but they also come with a lot of risks.
More often than not, you stand to make a lot or lose it all.
What Stocks Have a Buy Rating?
- Drive Shack Inc. (NYSE: DS)
- Phunware Inc. (NASDAQ: PHUN)
What Is So Bad about Penny Stocks?
Penny stocks are risky because they are very volatile, and the companies that list them are not bound by the same disclosure rules by the Securities and Exchange Commission.
Many penny stocks are pump and dump scams.
Can You Make a Living off Penny Stocks?
You can make a living off of trading penny stocks, but this is a risky market to be involved in.
If you want to trade penny stocks for a living, you’ll want to commit to some serious research.
Has Anyone Ever Got Rich off Penny Stocks?
There are plenty of people who have gotten rich off of penny stocks, including Timothy Sykes.
He’s an investment guru who helps folks develop strategies specifically for penny stocks.
Was Apple a Penny Stock?
Apple (NASDAQ: AAPL) was a penny stock around the early 2000s.
Another wildly successful company that first started trading as a penny stock was Amazon.