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.
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, 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. It’s important to know that information at the outset.
In short, read a little bit before you throw your money at a broker-dealer.
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.
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 $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.
While it may seem like a big hill to climb, it is not. Penny stocks have high volatility.
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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 about. It’s also helpful to know a lot about the company’s sector as well as their main competitors, if 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. Okay, 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 focuses on mini golf and has been very popular among casual players. Their Dallas location is already open, with locations in Charlotte, Washington D.C., Houston, and Miami to follow.
Drive Shack’s most recent financial report was a positive one. They reported positive operating income as well as year-over-year revenue growth of 130 percent.
This is all despite the challenges of the pandemic. Social distancing regulations have continued to fluctuate in many parts of the country, but Drive Shack has been able to adapt and keep their properties open.
This stock is down slightly from its peak in June, presenting an opportunity to buy at a discounted price.
This exciting entertainment brand is one to keep your eye on throughout 2021, and it’s one of the top penny stocks on Robinhood right now.
BRF S.A. (NYSE: BRFS)
BRF is a Brazilian food company based in Sao Paulo. They have a massive portfolio of over 30 brands that are sold globally.
Normally we would expect a food company like this to be a relatively stable long-term investment with slow but steady growth, but this doesn’t appear to be the case with BRF.
This stock has been very volatile over the past few months, with lots of price shifts and high trading volumes for a penny stock.
It doesn’t matter if you have $500 or $5 million.
Here’s what I recommend you do with your money right now.
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The interesting thing here is that there isn’t much news coming out of the company that would be driving these price shifts. Instead, the volatility is driven entirely by investors.
Investors who time their purchases right can really benefit from this volatility in the short term.
Some analysts think BRF is relatively cheap given its financial status, which could drive positive growth in the future.
The company’s large portfolio of essential products and their global presence are also very promising.
Alto Ingredients (NASDAQ: ALTO)
Alto Ingredients is a stock with a lot of untapped potential. After struggling for several years, their shares are finally on an upswing.
For years, the company was called Pacific Ethanol and focused entirely on ethanol products.
They rebranded to Alto Ingredients in early 2021 and switched to developing specialty alcohol products.
These products are used in a wide variety of consumer goods, including food, beverages, household cleaners, cosmetics, pet products, and more.
They also make a products for industrial and commercial use and even develop renewable fuel sources.
By expanding their business operations, Alto Ingredients has managed to dramatically increase their potential revenue streams.
This sets them up well for future financial growth. Their sales have consistently increased over the past few quarters.
Their share price has consistently gone up throughout October as well.
Their next earnings report will likely set the tone for future growth, so investors will want to keep an eye on that moving forward.
What Are the Most Popular Penny Stocks?
Elys Game Technology Corp. (NASDAQ: ELYS)
Elys Game Technology is a company that develops digital sports betting technology. They work with casino operators in Europe and North America to develop online betting solutions.
Digital gambling and sports betting became very popular during the pandemic, as casinos were closed and people could not enjoy these activities in person.
Many casinos developed digital betting platforms as a result. Elys is a company that really benefitted from this trend, as they provide the technology necessary to develop these platforms.
Additionally, many U.S. states loosened restrictions around digital gambling, which increased the market potential for these types of platforms.
Even though casinos are open again, people have gotten used to the fun and convenience of digital sports betting, and will likely continue to use Elys’ technology.
Elys also recently announced a partnership with the New York State Restaurant Association.
This partnership will help develop sports betting opportunities within restaurants and bars in New York, while also advocating for the restaurant and entertainment industries as a whole.
Elys’ most recent earnings report was a positive one.
Their revenue is up year-over-year and they have positive cash flow, which is always a great sign for a penny stock.
Phunware Inc. (NASDAQ: PHUN)
Phunware is an Austin-based tech startup with a diverse portfolio of operations. They also have offices in Miami, Irvine, and San Diego.
Phunware’s products help companies develop apps and other software for their audiences. Some of their features include audience monetization, location services, analytics, content management, and more.
This company also has blockchain technology products. They have two crypto products – PhunToken and PhunCoin.
PhunToken is a mobile loyalty program that businesses can use to reward their customers and keep them coming back.
PhunCoin is a consumer-facing blockchain program that rewards consumers for voluntarily sharing their data and taking services.
Not only does this reward its users with buying power, but it also helps Phunware’s clients acquire valuable data that they can use to market their products.
Cryptos have been all the rage lately, and investing in Phunware could be a good way to capitalize on this trend.
However, Phunware’s portfolio of products goes far beyond just cryptos, which provides them with more stability.
They recently announced that they will be buying Lyte Technology, a company that markets and distributes high-end computers.
One popular use for these computers is Bitcoin mining, so Phunware could use them as part of their crypto strategy.
Phunware is a company with huge potential moving forward. Although they may be a penny stock now, they could grow dramatically if companies implement their solutions on a wider scale.
Comstock Mining Inc. (NYSE: LODE)
Comstock Mining is a mining company with a unique focus on sustainable extraction processes and renewable resources.
While there are many interesting mining penny stocks on the market right now, this one stands out from the pack because of their unique business model.
They do have a full portfolio of mining operations that includes gold, nickel, lithium, silver, cobalt, and more.
Their mining properties are in the Comstock mining region of Nevada.
However, they’ve taken a different approach from other companies by focusing on eco-friendly extraction. They’ve also decided to focus on mining for materials that support the clean energy market.
For example, both cobalt and nickel are essential for developing electric vehicles.
The electric vehicle market has been picking up steam over the last several years, and the stock market has reacted accordingly.
Getting into this industry will likely be a smart move for Comstock as demand for electric vehicles continues to increase.
Comstock stock spiked in February 2021 during a period of market volatility and has continued to perform fairly well – albeit with some ups and downs.
This company has also created the industry’s first commercial mercury remediation system.
This system will help prevent their mines from contaminating the surrounding landscape.
Finally, they’ve announced that they have acquired a majority stake in a company called LiNiCo, which recycles lithium-ion batteries.
This helps them diversify their operations and get involved further in the electric vehicle industry.
Right now, Comstock Mining has an extremely low price-to-earnings ratio, which means that they could be undervalued.
What Are The Best Penny Stocks To Buy?
Netlist Inc. (OTC: NLST)
Netlist is a California-based company that develops computer SSDs, memory modules, and embedded flash products.
They can also design custom semiconductor logic devices.
Netlist’s products are in high demand this year. Consumer demand for computers and other electronic devices is extremely high, which means that there’s a constant need for these components.
This has been reflected in the company’s recent financials.
Their revenue is up nearly 500 percent year-over-year, and their net income is up more than 1600 percent after posting a loss last year.
The stock has spiked as a result, delivering investors returns of nearly 650 percent from last fall.
All of this looks incredibly promising for Netlist moving forward.
SOS Ltd. (NYSE: SOS)
The cryptocurrency markets have been the subject of intense public interest and scrutiny this year. Many investors have looked for stocks that are involved in the cryptocurrency, rather than investing directly in cryptocurrency itself.
SOS is one of these companies, and it’s been of particular interest to retail investors on Reddit and other platforms.
SOS is based in China and has several subsidiaries.
They’ve adjusted their business model several times since their inception, drawing some criticism from experts. However, their most recent approach seems to be working.
They’ve invested in the technology to mine both Bitcoin and Ethereum en masse. They also provide a variety of emergency services throughout China.
SOS’s most recent earnings report was a solid one.
Because they’ve only recently started mining cryptos, this is actually a reflection of their other business operations, which appear to be solid.
The company has also announced huge revenue growth in the first half of the year.
Mining for Bitcoin and Ethereum should only add to this financial stability.
If you’re interested in cryptocurrencies as well as investing in China’s rapidly growing economy, this could be a penny stock worth keeping your eye on.Stock Advice That Beats The Market! Stock Advisor's recommendations have beaten the market over the past 19 years. Tired of picking losers? Stock Dork readers can join for only $99 a year! Check out Stock Advisor today!
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.
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