While it’s true that trading penny stocks is inherently risky, there’s also an opportunity for making massive returns. Follow along for our top picks to kickstart your research.
Penny Stocks that Could Take Off
DiDi Global Inc. (OTCMKTS: 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. The share price has been down since May, possibly due to lackluster second-quarter financials.
As the company developed its Gibraltar pit’s higher benches, extraction of 21 million lbs of copper and 236 over a thousand lbs of molybdenum proceeded as planned.
For the remainder of this year, its Gibraltar pit will serve as the principal ore source, and as mining moves into deeper benches, grades and stability of mineralization are anticipated to increase steadily.
Taseko hopes these improvements will swing share prices and revenue back in the right direction.
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.
Its services proved invaluable during the pandemic but still hold an important place in the current job market.
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.
Compared to the previous year, total consolidated revenues for the three months grew by almost $2.2 million or 50%. Revenues for the PDN Network segment climbed around $200,000, or 15%, compared to revenues for the same time last year.
If Professional Diversity Network can continue this 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.
Phunware had a new first-quarter record for reported sales as a public company, and actual revenues surpassed a 310% increase to start the fiscal year. The second quarter still showed a considerable revenue increase of 280% but fell short of expectations.
In addition to the gains accomplished with top-line growth, the company kept investing in its operations to strengthen its product line and broaden its ecosystem of digital assets. With that, the decentralized exchange Uniswap now offers PhunToken.
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.
The company recently announced that its Phase 3 Pivotal Study of PL9643 is currently on track with patient enrollment. Topline results are anticipated to be released in the second half of 2022.
A recent financial report showed gross product sales for Vyleesi climbed by 75%, net product revenue by 225%, and the number of prescriptions filled by 45% compared to the previous quarter.
Plus, it has completed a $15 million private placement of convertible, redeemable preferred stock. The company initiated Phase 2 Clinical Study of PL8177 in July, with topline results to be released in the first quarter of 2023.
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 ventures 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 higher than last year at this time.
Despite the offshore drilling rig operator’s stock seeing ups and downs along with the market as a whole, the enterprise was still on track and was optimistic about the next months.
This was due to Transocean winning a $181 million extension from Equinor SA for its Transocean Spitsbergen floater, a harsh environment semisubmersible.
Drilling is anticipated to start in October 2023 and terminate in April 2025 for the nine wells covered by the expanded contract, as well as two one-well options.
The company and investors have been waiting for a recovery in the offshore drilling industry for some time, and Transocean’s most recent order is proof of it. Investors may believe that Transocean has even brighter days ahead of it even with uncertainty around oil and gas prices.
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 160% over the past year.
Gran Tierra announced that it plans to allocate 70% of its 2022 capital program to bolster its core assets. This includes $70 million to develop its Acordionero field, $40 million for its Costayaco field, and $30 million for its Moqueta field.
With its development and exploratory drilling projects for 2022, Gran Tierra said that the company is still on schedule and within budget.
Its continued ramp-up in oil production during 2022 has been significantly aided by the successful production results with the Acordionero and Costayaco infill development well projects.
It accomplished a significant milestone by fully repaying its loan facility earlier this month. By continuously lowering its outstanding credit facility from $207 million as of June last year to $0, the company has considerably improved its balance sheet.
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 the penny stock range, it has shown significant growth over the last year.
2022’s first quarter showed that its core business’s growth was still going strong. In the first quarter, the company also completed two major initiatives on the strength of its ongoing expansion.
The first was when it acquired Gambit Rewards, and the second was when Bally’s Corporation closed a significant investment with Snipp.
Additionally, sales reached $4.2 million, up 64% from the previous quarter. This is the biggest amount ever recorded in a Q1 period in the company’s history.
Substantial cash flows and net income numbers over the last quarter also bode well for the company moving forward.
What Is a Penny Stock?
As defined by the Securities and Exchange Commission (SEC), 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 begin trading 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 penny stocks on the OTC market. Most of our stock picks are listed on major exchanges, so accessibility shouldn’t be a problem. Best of all, 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 selling 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?
There is no definitive answer to this question. Some believe that penny stocks are a high-risk, high-reward investment, while others think of them as a way to gamble on the stock market. Ultimately, it is up to each investor to decide whether or not penny stocks are a wise investment.
What Stocks Have a Buy Rating?
Gran Tierra Energy (NYSE: GTE) and Phunware Inc. (NASDAQ: PHUN) are legitimate penny stocks with a buy rating. Gran Tierra Energy explores and produces oil and natural gas in South America. Meanwhile, Phunware Inc. is a rapidly growing mobile app development company with a solid future prospect.
What Is So Bad about Penny Stocks?
To think that penny stocks are bad investments is a common misconception. In reality, penny stocks can be just as risky (or even more risky) as buying stock in larger, more well-known companies. Thus, penny stocks should only be purchased by investors comfortable with the risks.
Can You Make a Living off Penny Stocks?
It is possible to make a living from penny stocks, but it is not easy. Most people who make a full-time income from penny stocks do so by day trading. Day trading is not for everyone, and it is important to do your research before getting started.
Has Anyone Ever Got Rich off Penny Stocks?
There is no guarantee of making money when investing in penny stocks, but many people have become millionaires by investing in these low-priced securities. Among them is Timothy Sykes, who earned $1.65 million from day trading a $12,415 gift from his Bar mitzvah.
Was Apple a Penny Stock?
Apple went public in 1980 with an initial offering price of $22 per share, so it was not a penny stock. Most tech giants were not penny stocks when they first went public. Amazon, Microsoft, and Google had initial offering prices of over $20 per share but not below $5.