If your initial instinct is that penny stocks represent extraordinarily risky ideas that feature little chance for success, you would be 100% correct. Clearly, conservative or risk-averse investors will find this subsegment of the market anathema to their approach. At the same time, no one investor is identical to the other.
Considering the wider audience, some folks might like or even prefer penny stocks. If you must buy them – for whatever reason, I’m not here to judge – you should do so smartly. Assess ideas tied to relevant or intriguing fundamentals. While going with this approach yields absolutely zero guarantees, you might improve your probabilities of success. And by improve, I’m talking maybe single digits.
If you still want to move forward despite the warnings, here are seven penny stocks to consider.
|APGMF||Applied Graphene Materials||$0.18|
|GTE||Gran Tierra Energy||$1.36|
|SIRC||Solar Integrated Roofing||$0.18|
BioNano Genomics (BNGO)
Though the clinical-stage biotechnology arena features an incredibly risky platform for penny stocks to buy, BioNano Genomics (NASDAQ:BNGO) brings some encouraging fundamentals to the table. Specializing in structural variation detection for genetic disease and cancer research, BioNano represents a preventative force. As most folks know, early detection is vital for surviving conditions like cancer.
Moreover, the company made significant progress with its clinical trials, recently delivering landmark results regarding the utility of optical genome mapping (OGM) in detecting myelodysplastic syndrome (MDS). By delivering better results over traditional methodologies, BioNano hopes that OGM technology can help facilitate superior patient outcomes.
Though encouraging, BNGO stock remains largely the domain of market speculators. On a year-to-date basis through the Sept. 20 session, BNGO lost 34%. Indeed, in the trailing month, shares slipped more than 16%, demonstrating the volatility of penny stocks.
Nevertheless, with much red ink already priced in, gamblers could see upside value in the underlying fundamentals.
Denison Mines (DNN)
A uranium exploration and development firm, Denison Mines (NYSEAMERICA:DNN) makes for a rather controversial idea among penny stocks to consider. After all, most if not every adult is familiar with the longstanding consequences of nuclear facilities gone awry. At the same time, the fundamental realities of nuclear power’s indelible relevance could turn DNN around.
Two factors immediately come to mind. First, nothing comes close to the energy density of nuclear fuel. Unless you know of another energy source where one fuel pellet features the power potential inherent in 149 gallons of oil, uranium will be scientifically and economically relevant.
Second, nuclear power is reliable. Indeed, it’s the most reliable energy source. Underlying facilities feature a capacity factor of nearly 93%. This means that 93% of the time every year, nuclear powerplants deliver maximum power distribution. Nothing else comes close.
Still, DNN presents risks, with shares down 19% for the year. However, in the trailing month, DNN gained 15%, likely on geopolitical factors crimping vital energy supplies.
Vizsla Silver (VZLA)
Vizsla Silver (NYSEAMERICA:VZLA) may intrigue those interested in both penny stocks and “real” money ideologies. Vizsla is a mining firm, “focused on advancing its flagship, 100%-owned Panuco silver-gold project located in Sinaloa, Mexico.”
As a resource exploration firm, VZLA presents myriad risks. Fundamentally, companies in this subsegment can strike gold (literally in this case) or they can fail badly. Without knowing until you really know, mining exploration firms sometimes feature a binary hit-or-miss profile.
In addition, the Federal Reserve’s stated intention to implement a hawkish monetary policy implies deflationary pressures. Should these pressures get too out of hand, inflation-dependent names like precious metal mining firms could suffer.
However, it’s also possible Vizsla Silver can bank on the fear trade. That is, with the stability of the dollar under question based on rapid purchasing power changes, some investors may turn to hard asset-related securities. With VZLA being one of the penny stocks, it might not require that much coaxing.
Applied Graphene Materials (APGMF)
Billed as “a world leader in the development and application of graphene nanoplatelet dispersions for customers in the coatings, composites and functional materials sectors,” Applied Graphene Materials (OTCMKTS:APGMF) may be appropriate for those who want to take an extreme bet among penny stocks.
Just to reiterate, when I say extreme, I’m not messing around. With shares exchanging hands at less than two dimes, APGMF can get very hairy.
Nevertheless, Applied Graphene brings a compelling prospect to the table because of the underlying commodity. A one-atom-thick layer of carbon atoms arranged in a hexagonal lattice, graphene represents the world’s thinnest material. At the same time, it’s incredibly strong, featuring multiple applications across various industries.
From fire retardants to concrete reinforcements to military armor, graphene enjoys the potential to change the world. That’s no guarantee that APGMF will outperform other penny stocks. Still, speculators can dream – and bid up shares in the over-the-counter market.
Gran Tierra Energy (GTE)
While the Fed’s hawkish policies may have contributed to a (relative) decline in fuel prices, USA Today reported recently that energy bills might rise this winter. Cynically, this circumstance – if it materializes – would likely benefit Gran Tierra Energy (NYSEAMERICAN:GTE). The company is an oil and natural gas exploration firm.
“This winter, the European Union will cease, for the most part, buying Russian oil, and in addition, they will ban the provision of services that enable Russia to ship oil by tanker,” Treasury Secretary Janet Yellen told CNN recently. “It is possible that could cause a spike in oil prices.”
Although trading on bloody geopolitical dynamics isn’t exactly everyone’s cup of tea, the narrative bodes well for GTE stock. Essentially, the framework is all about Economics 101: less supply, greater demand.
To be fair, GTE may have the opposite problem of typical penny stocks – shares jumped tremendously and sustainably. On a YTD basis, GTE has gained a staggering 70%. Still, trading at only $1.35 at time of writing, it offers psychologically speculative appeal.
Solar Integrated Roofing (SIRC)
If one fundamental factor roundly supports the bullish case for Solar Integrated Roofing (OTCMKTS:SIRC), it could be climate change. An integrated, single-source solar power, roofing systems installation and electric vehicle charging company, Solar Integrated may see increased demand as temperatures rise. In turn, the hotter-than-usual weather forces utility bills to skyrocket, inspiring residential owners to find effective solutions.
Indeed, global heat waves may facilitate organic marketing for Solar Integrated. Recently, California endured a significant heat wave, enough so that it almost broke the power grid. However, folks there might not be so lucky if temperatures continue to be unrelenting in the summer months. Thus, forward-thinking individuals might just make the transition to solar, possibly helping SIRC.
I say possibly because we’re still talking about penny stocks. With SIRC, the label is literal, trading hands for 18 cents. In just the trailing month, shares slipped a staggering 55%. For some hardened traders, that could be a buying signal.
Air Industries (AIRI)
With Russia’s brazen invasion of Ukraine, the defense industry suddenly attracted the spotlight for obvious reasons. However, some investors may not realize that even in the realm of penny stocks, potentially viable defense contractors exist. One example is Air Industries (NYSEAMERICAN:AIRI). Specializing in aerospace parts manufacturing, Air Industries serves advanced fighter jets, including the F-35 Lightning II.
At the moment, the company doesn’t have a clear relationship to the ongoing Ukraine crisis. It may in the future, depending on how the conflict materializes, though that’s not why I’m interested in Air Industries. Rather, the rest of the world seems to be getting their boxing gloves on.
For instance, you have decades-long tensions between China and Taiwan. Additionally, a border conflict recently erupted between Kyrgyzstan and Tajikistan, implying Russia’s military excursions may have created disruptions in the regions of the former Soviet Union.
With more potential fireworks on the way, AIRI might be a smart bet among penny stocks to consider.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.