Let’s be honest, you’re interested in the best penny stocks under $1 to buy now because of the lottery principle. You understand that very few people actually win lotteries, let alone the ultimate jackpot. At the same time, a mathematical reality exists. Someone always wins games of chance. Possibly, that someone could be you. However, the government would like to have a word with you.
According to the U.S. Securities and Exchange Commission (SEC), this category of investment aligns with low-priced shares of small companies. However, even the best penny stocks under $1 may encounter friction and pain points associated with the lesser examples. These include infrequent trading, “which means that it may be difficult to sell” once you have these stocks in your possession.
Also, keep in mind that even with retail investors enjoying access to massive libraries of free resources, scams still occur. Recently, the SEC uncovered a $194 million illegal scheme in this market subsegment that spanned three continents. So, please don’t think that merely acquiring the best penny stocks under $1 will exempt you from risk. It won’t.
Nevertheless, if you must get that adrenaline going, below are the best penny stocks under $1.
|VLDR||Velodyne Lidar||96 cents|
|PTOTF||Patriot One Technologies||27 cents|
|USWSW||U.S. Well Services||5.8 cents|
|AXAS||Abraxas Petroleum||82 cents|
|LLKKF||Lake Resources||59 cents|
|DXF||Dunxin Financial||30 cents|
|GPHBF||G6 Materials||3.7 cents|
Velodyne Lidar (VLDR)
It wasn’t too long ago that Velodyne Lidar (NASDAQ:VLDR) represented a much-hyped investment in the future of mobility. No, I’m not talking about electric vehicles (EVs) but rather full autonomous driving. At one point, VLDR commanded a healthy double-digit price tag. As of this writing, VLDR now finds itself priced at 96 cents. Therefore, it could be one of the best penny stocks under $1.
Fundamentally, the underlying company, which specializes in lidar-based solutions for autonomous functionality, aligns with a compelling sector. According to the experts at Allied Market Research, the global autonomous vehicle market could reach a valuation of $2.16 trillion by 2030. This translates to a compound annual growth rate (CAGR) of 40.1%.
Still, you want to exercise caution with any trade, even the best penny stocks under $1. One glaring problem is that in the second quarter of 2022, Velodyne posted revenue of $11.5 million, down 15.4% against the year-ago period. It did pare down net losses to $44.3 million from $79.2 million.
Bottom line, VLDR is incredibly risky. However, if you believe in the autonomous industry, Velodyne might be intriguing.
Patriot One Technologies (PTOTF)
One of the problems with speculative investments — even the best penny stocks under $1 — is lack of visibility. You might see incredible developments with a company. Or even better, financial resilience that Wall Street doesn’t recognize. However, especially when an organization trades over the counter, it’s difficult for the mainstream to appreciate. Arguably, that’s the case with Patriot One Technologies (OTCMKTS:PTOTF).
Specializing in artificial intelligence (AI), Patriot One features a multi-sensor covert threat detection platform. Leveraging advanced technologies to quickly identify weapons along with social disturbances, the Patriot One platform can help law enforcement officers and security professionals respond quickly to threats.
However, the company lacks in the revenue department, only generating $860,000 in the fiscal year ended July 2021. But on a trailing-12-month basis, Patriot One posted sales of $2.46 million. Also, the company features solid strength in the balance sheet.
U.S. Well Services (USWSW)
A hydrocarbon specialist, U.S. Well Services (NASDAQ:USWSW) “provides high-pressure, hydraulic fracturing services in unconventional oil and natural gas basins,” per its website. The company features conventional (diesel) and clean (electric) hydraulic fracturing fleets. Reportedly, they’re “among the most reliable and highest performing fleets in the industry, with the capability to meet the most demanding pressure and pump rate requirements in the industry.”
Obviously, U.S. Well Services draws intrigue among the best penny stocks under $1 because of the new energy paradigm. First, Russia invaded Ukraine, setting off a global energy crisis. Recently, the Kremlin cut off critical hydrocarbon supplies to Europe, escalating tensions. Second, soaring inflation reduced the purchasing power of the dollar, contributing to commodity price spikes.
Still, the above factors do not guarantee upside for USWSW. Priced at 5.8 cents, this is one of the boldest names you can get among the best penny stocks under $1. Also, shares have slipped 45% on a year-to-date (YTD) basis. However, should tensions rise even more, USWSW could be intriguing.
Abraxas Petroleum (AXAS)
An independent hydrocarbon exploration and production company, Abraxas Petroleum (OTCMKTS:AXAS) represents a high-risk, high-reward venture on geopolitical dynamics mentioned above. While these dynamics present cynical tailwinds, Abraxas offers only an extremely speculative profile. For starters, AXAS trades hands at 82 cents. Another factor is the market capitalization, which sits at only $7.85 million. Compared to the majors, that’s a rounding error.
If these risks weren’t enough to make you think twice, Abraxas also suffered severely in the market recently. Sure, it’s only down just slightly YTD. However, in the trailing month, AXAS hemorrhaged nearly 46%. Therefore, only the most extreme contrarians need to apply here.
Nevertheless, it could factor in as one of the best penny stocks under $1 to buy. And that’s because the conflict in Ukraine shows no sign of abating anytime soon.
Still, Gurufocus.com warns that AXAS may represent a value trap. Therefore, be extremely careful with this market idea.
Lake Resources (LLKKF)
If any silver lining exists in Russia’s awful and unnecessary military belligerence in Ukraine, it’s that dependency on morally questionable regimes may impose long-term vulnerabilities. Further, growing dependencies on hydrocarbons presents all manners of risks, as the Europeans discovered this year. Therefore, the broader pivot to clean and renewable energy sources may generally aid the narrative of Lake Resources (OTCMKTS:LLKKF).
With the EV revolution churning out an increasing volume of vehicles and competition, Lake Resources answers the call for high-purity lithium, per its website. Under its projects overview section, Lake states that it is a “clean lithium developer utilising clean, direct extraction technology for the development of sustainable, high purity lithium from its flagship Kachi Project, as well as three other lithium brine projects in Argentina.”
While LLKKF brings plenty of fundamental relevance to the table, it’s also wildly risky. Priced at 59 cents, shares slipped more than 24% YTD. Also, Lake represents a pre-revenue company. At the same time, Lake Resources features a surprisingly strong balance sheet unencumbered with debt. Therefore, it just might be one of the best penny stocks under $1.
Dunxin Financial (DXF)
I hesitate to include Dunxin Financial (NYSEMKT:DXF) on this list of the best penny stocks to buy under $1. You’ll soon see why. Per Reuters, Dunxin represents a microfinance lending company. Primarily, the company provides loans to individuals along with small and medium-sized enterprises. Known formerly as China Xiniya Fashion Limited, Dunxin’s corporate address is registered in Wuhan.
According to an early September 2022 report by Bloomberg, “China’s export growth slowed more than expected in August and imports stagnated, a sign of a darkening global economic picture and weak domestic growth hit by Covid lockdowns and a property slump.” Lending money during this time may be problematic given a potential economic downturn.
At the same time, Economist.com argues that “Consumer-price inflation has averaged only 2.3% over the past 20 years.” While Russia’s invasion of Ukraine created inflationary pressures, the net impact to Chinese consumers may have been overhyped. Thus, China’s central bank might not raise borrowing costs to the extent that the Federal Reserve did. That could help DXF, but be extremely careful.
G6 Materials (GPHBF)
Not really a household name unless you’re talking about dedicated fans of the best penny stocks under $1, G6 Materials (OTMCKTS:GPHBF) simply features out-of-this-world risks. Featuring a price point a few ticks under 4 cents, GPHBF requires warnings on top of warnings. As well, the stock has slipped 59% so far this year, making it inappropriate for all but hardened speculators.
Getting those caveats out of the way, G6 does bring some intrigue when discussing the best penny stocks under $1. The company dedicates itself to the research, development and commercialization of advanced graphene materials, per its website. A single layer of carbon atoms arranged in a hexagonal honeycomb lattice, scientists consider graphene to be the strongest of all known materials.
Given its unique properties, the range of applications for graphene constantly grows. The University of Manchester provides more details about this matter but graphene features applications for energy, water infrastructures and biomedical industries.
Still, that doesn’t necessarily mean G6 will succeed in commercializing graphene for the above purposes. Nevertheless, if you want to buy yourself a lottery ticket, GPHBF might be it.
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.