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?
Ok, these are the penny stocks right now that we think have the most potential for the rest of 2020.
Bionano Genomics, Inc. (BNGO)
Bingo was its name O. And that song has nothing to do with genome analysis, which is what Bionano is all about.
The San Diego genomics company offers a technological alternative to current DNA sequencing. Bionano’s Saphyr System can do long DNA reads and makes a structural understanding of a genomic structure possible.
This is compared to the current analysis that uses short reads and can often lead to errors are unclear pictures of composition. BNGO is a speculative stock but it has very significant and substantial technology.
Saphyr is more efficient than other methods and allows scientists to see greater variations of genome strains. Now, the Saphyr has not been selling like hotcakes, which is why the stock is a few pennies.
But, the company has pivoted its sales approach. Buyers can now get Saphyr analysis at different tiers. This might make the service more affordable. Time will tell.
Guardion Health Sciences, Inc. (GHSI)
GHSI is a company with ocular nutrition products and diagnostic tech. The company is coming off a solid quarter.
Q2 revenues for GHSI were $1.19 million, which is a 356% increase from Q2 last year. The growth was from the sale of an immune-related formula to a Malaysian company.
In addition for GHSI, ocular health products also saw a 26% increase from the previous year. Unfortunately, the company’s medical device line sales fell by a hefty margin.
Now, the sales were poor because doctor offices around the country were closed. These numbers will increase as we head into 2021 and the stock should see benefits from that.
Turquoise Hill Resources Ltd. (TRQ)
This is one Canadian miner to watch. They are not mining in Canada, but rather in East Asia.
The company explores for and develops mines producing gold, copper, coal, molybdenum, and other minerals.
On August 28, TRQ increased its gold production outlook for 2021 by about 100,000 ounces. But, there is some bad news on the horizon.
TRQ will have to likely dilute shareholders after debt discussions with Rio Tinto. The penny stock will have to issue at more than $2 billion in new equity.
What Are the Most Popular Penny Stocks?
These penny stocks are names you might know from just normal consumer products or stocks that are gaining momentum right now.
ToughBuilt Industries, Inc. (TBLT)
TBLT builds tools and has been selling well on Amazon. In fact, recently, Toughbuilt sold $1.35M through its Amazon U.S. and Canadian storefronts.
Those are nice numbers. And they helped TBLT actually beat revenue estimates for the same quarter. The penny stock company had revenues of $6.86M, a 44% increase year-over-year.
Plus, this number beat the consensus estimate by $0.84M. A lot to like for TBLT.
Lastly, TBLT also just put 64 new products on Rona.com, a Canadian constriction seller. Bags, belts, knee pads, sawhorses, and other items are all being sold on the site. The company said this about the new placement:
“Rona’s great distribution throughout Canada allows us to expand our brand awareness and increase our market share in this growing market. We also believe and look forward to a significant growth in both professional and DIY business in Canada.”
J.C. Penney Company, Inc. (JCPNQ)
JC Penney. The store that will not die. Yes, the clothing store with so many clothes in it you can barely find your way out is making our hot penny stock list.
Ok, before you call us (or just me) a bunch of kooks, hear…me…out. The Simon Property Group is buying JCPNQ assets—not all the assets, just some—and a lot is happening with the deal.
Now, that may not sound very interesting, but the stock is worth a quarter and the value of the liquidated assets could be worth more than that. COVID-19 is affecting how to value retails assets and mall property.
Of course, I recommend reading the court documents and statements by the presiding Judge Jones. He has had it with the case and wants to move quickly. Previous J.C. Penney shareholders will not be made whole, but you could swoop in and make some easy cash on the liquidation.
Naked Brand Group Limited (NAKD)
Ok, this stock has fallen from grace after a couple of previous deals with Elle McPherson clothing and even Dwayne Wade back in the day.
In fact, earlier this year the company sold off the Naked Brand name (the company used to sell underwear and swimwear) and assets to an Italian company.
The company is now in the middle of a strategic turnaround and will be asset light. NAKD will now sell wholesale and through direct-to-consumer channels.
NAKD is primarily Bendon Limited, which is a New Zealand clothing brand. And the new management team has the balance sheet in order and they are looking to operate at a profit.
“We are better positioned to seize immediate-term growth opportunities than at any time in our recent history.”
This is a distressed asset play and NAKD, in the past, had a very popular line of intimate wear. Obviously, the company has shifted gears, but a healthy balance sheet will pay dividends if they return to their roots of quality design.
What Are The Best Penny Stocks To Buy?
These are the best penny stocks that you should be watching closely. There are numerous catalysts on the horizon for these stocks and you may not want to sit back and chill on these.
Camber Energy, Inc. (CEI) & Viking Energy Group, Inc. (VKIN)
CEI and Viking Energy have an ongoing merger that I think is worth following. Both companies are small oil companies operating in the Texas and Gulf Coast states. Viking also has some notable assets in Kansas.
In this case, Camber will merge into Viking and the latter will be a subsidiary of Camber after the deal. VKIN has done an excellent job of keeping a tight balance sheet over the years, and the company is adept at buying distressed oil assets during a recession.
We are seeing this take shape and VKIN’s James Doris knows how to hedge against downward oil prices. The company logged a net loss of $17.67 million compared to a net income of $1.29 million for the same time last year.
But, this net loss will eventually rebound and the combined oil assets have logged quality production. We see this as a buy-low opportunity on a company (combined company) that knows how to find solid oil assets for cheap.
Express, Inc. (EXPR)
Another distressed mall asset. Again, this is a high-risk bet on a company that has taken a beating during the pandemic.
EXPR is the definition of mall exposure. The company seems to have a gigantic piece of real estate in every abandoned mall across America.
But, this stock has proven it can sell clothes and make money, which is far away better than money other penny stocks on the market right now. I mean how many companies have shifted to selling COVID-19 sanitizers after pivoting from selling CBD? Come on.
EXPR is being priced like they are going out of business. This is not true. Of course, the company needs to develop a better website and deliver on some winning lines—clothing choices are shifting.
All that said, EXPR can shore up its balance sheet, it is already underway. And if people return to shopping malls, you could see a bounce here. But, similar to JCPNQ, this is not one to hold onto for the long-term.
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.