Though cheap penny stocks are regarded as trading for amateurs, there are plenty of lucrative penny stocks to invest in. Factors including strategic stock splits, poorly timed initial public offerings (IPO), and weakness in the commodities market can create unique opportunities for big payouts with the right penny stock companies.
Despite the risk, with a few of the best penny stocks and smart investing strategies can help you minimize risk and reap the rewards. Here are our picks for the hottest penny stocks to buy today.
Arotech Corporation (ARTX)
Arotech Corporation (ARTX) is a defense and security services company with a market cap of $88 million. This company operates in several countries and claims such competitors as General Electric Company and Honeywell International Inc. through their Power Systems division.
Arotech Corporation is also a defense contractor that manufactures products for military, homeland security, and law enforcement use. With the current administration’s desire to increase defense spending, Arotech could be looking at a huge breakout.
Like all hot penny stocks, however, Arotech is still a speculative choice. Revenues in 2017 were just over $98 million, and 2014 revenues were just over $103 million, so growth and profitability are still a struggle. For a company founded in 1990, with one division existing as far back as 1971, it has been a slow climb to reach these numbers.
In 2017, Arotech earned a profit of 17 cents per share, with a projected growth of 18 cents per share in 2018 and 26 cents per share in 2019. If the company can hit these numbers and grow quickly, the forward price-to-earnings ratio of 13 looks quite low.
Mid-Con Energy Partners (MCEP)
Mid-Con Energy Partners (MCEP) is an upstream oil and natural gas producer based in Tulsa, Oklahoma. Mid-Con is an exploration and production company, so like other companies of this type, its success is dependent on oil prices.
At the time this article was written, crude oil was trading around $70 per barrel. This is the highest price crude has been at since 2014, which is great for MCEP stock.
In 2013, MCEP stock hit a trade high of $27 per share. When the oil slump hit in 2014 and continued until 2016, the interests were hit hard. By the end of 2016, MCEP found itself on the cheap penny stock list, trading as low as 73 cents per share. Climbing back toward those original numbers has been a struggle, but MCEP share prices are now cresting the dollar line at $1.75 per share.
As a whole, the company is losing revenue, however. Revenue dropped from $96.91 million in 2014 to $56.1 million by the end of 2016. They rose again to $58.93 million in 2017, but the revenues are estimated to stay below $60 million through 2018 and 2019.
How those estimates could be affected by higher crude prices isn’t clear, so the stock remains speculative. That said, the stock stayed above $20 per share when oil traded above $100 per barrel. If oil prices climb, MCEP stock has a chance to hit its previous levels from 2013 and become one of the hottest penny stocks out there.
mCig Inc. (MCIG) is a marijuana-industry holding company based in Las Vegas. Though mCig got its start with vaporizers, mCig has since grown into a full-scale marijuana cultivation and construction company that now operates in Nevada, California, and New York.
Knowing that a business has grown to operate on both the east and west coast is a good sign, and this growth could put mCig among the top marijuana penny stocks. The company’s financials are still uncertain, however, with the company earning $1.72 million in revenues in 2016 and $4.78 million in 2017, making $1.53 million in profits that same fiscal year. During just the first three quarters of 2018, mCig brought in significantly more — over $6 million in revenue.
Though this bodes well for the company, buying mCig shares is still making a speculative investment. Rapidly rising revenues and profits could mean big payouts for investors, but mCig shares are still trading under 25 cents per share, so there’s not a lot of investor confidence. These shares have also never breached the dollar line, though they came close with 92 cents per share in 2014.
The current price is well above the 5-cents-per-share range where mCig traded for 2016, so if it can maintain this level and continue to grow, its $91 million market cap has the potential to go much higher.
Tuesday Morning Corporation (TUES)
Tuesday Morning Corporation is a home-goods retailer based in Dallas, Texas, that has struggled to keep steady profits in a volatile retail environment. Though it’s been around since 1974 and had expanded its operation to 41 states by 2001, Tuesday Morning Corporation has been plagued by high turnover in upper management that has taken a toll on its profits.
Regardless, the company still operates 724 stores across the country, which is reason enough to consider it as a potential investment. TMC’s revenue also grew 10 percent in the last quarterly report, and sales rose by 9.1 percent in quarter one. 58 stores were relocated in the past year as well, leading to 65 percent growth in sales. These figures are encouraging and indicate a potential for growth and profit.
Analysts still expect net losses for the current and next year, however, so it’s a speculative stock nonetheless. But with 724 stores around the country, it’s hard not to see TMC’s stock price of around $3.30 per share and market cap of $140 as a little low. Investors should also remember that the company’s stock traded for $22 per share in 2014. If the revenue increases continue, investors could enjoy incredible gains in the future.
AK Steel Holding Corporation (AKS)
The steel industry is volatile, with supply and demand shifts creating situations that make it incredibly difficult for companies like AK Steel Holding Corporation (AKS) to find a profit. This is a very cheap stock to begin with, and because the company hasn’t moved much in the past 15 years, it’s hardly a sound investment. Currently trading at $5.18 per share, AKS is down from $5.80 per share at the end of 2017, which doesn’t inspire much confidence from investors.
The current administration is trying to make U.S. steel companies more competitive with foreign rivals, however, and the global economy is shifting for the better, so AK Steel Holding Corporation could be poised for a comeback. Earnings and revenue are expected to grow in the current year and next year, meaning there’s a potential for serious investor profits.
PDL BioPharma Inc. (PDLI)
PDL BioPharma Inc. (PDLI) was first established to acquire the rights to, or patents on, highly marketable pharmaceuticals. While this was an effective strategy for a time, other drug developers quickly caught on and began doing the same for themselves. Because of this, PDL BioPharma Inc. has been struggling to acquire pharmaceuticals and marketing rights at prices that leave room for profitability, leading to a stock value drop from over $30 in 2006 to $3 per share this year.
The quarterly report for PDL BioPharma Inc. is telling a new story, however. At this time, this company has $532 million in the bank, compared to the market cap of $462 million, so it could realistically pay higher prices for its pharmaceuticals and marketing rights and still have room for dividends. For an investor that gets in now, there could be a significant payout in the future.
Groupon Inc. (GRPN)
Image via Flickr by tonyh17
Groupon Inc. (GRPN), a daily-deals company, opened strong in 2011 with a price of $28 per share, much to the joy of investors. This didn’t last long, however, and the shares fell into the penny stock range within a year and haven’t been able to rebound since then.
This was a result of several calculated errors. The pre-IPO growth rate was sustainable, and several competitors have thrown hats into the ring, leaving Groupon Inc. in the trenches. Net income peaked in 2012, and sales peaked in 2015.
That said, Groupon Inc. is preparing for the end of 2018 and the future. Revenue is expected to fall another 7 percent this year, but income is projected to increase from 2017’s 11 cents per share to 19 cents per share. In 2019, sales are expected to grow as well, leading to per-share profits projected to hit 24 cents per share. This could be highly beneficial for investors waiting for the uptrend.
Zynga Inc. (ZNGA)
Zynga Inc. is the company responsible for popular online games such as FarmVille and Words with Friends, among others. Though expected to be huge, Zynga was hit hard when Facebook dropped an exclusivity arrangement in 2012, which diminished its IPO from 2011 and put the stock price under $5 per share. It has yet to rebound, so it hasn’t been quite the cash cow that investors hoped for.
The tides appear to be turning, however. Mark Pincus, the CEO and founder of Zynga, relinquished control of the company by giving up two classes of voting shares that gave him an unbalanced voting majority. While this doesn’t mean that the lack of growth is his fault specifically, he wasn’t helping it either.
The best part of this stock is that it’s not on many investors’ radar yet, so early investors can take advantage of the Zynga low and wait for it to crest the $5 per share hump.
Enphase Energy, Inc. (ENPH)
Enphase Energy, Inc. (ENPH) is an energy technology company headquartered in California. It manufactures software-driven home energy solutions. In 2014, Enphase Energy stock broke out of a two-year consolidation pattern and hit an all-time high in the upper teens. In June 2015, it achieved a double top pattern, marked by two consecutive peaks in price, signaling the reversal of an uptrend, and broke support at $9.50 per share, entering a deep decline that ended with an all-time low of 65 cents in May 2017.
This led to multiple rally waves with an intermediate breakout, giving Enphase Energy a two-year high in June 2018. Heavy buying volume indicates that the stock is expected to see impressive gains in the next few weeks, finally reaching its resistance at the broken top that should come to double digits.
Bellerophon Therapeutics, Inc. (BLPH)
Bellerophon Therapeutics, Inc. (BLPH) is a clinical-stage biotechnology company based in New Jersey. Bellerophon’s all-time high was $12.92 per share in 2015, followed by a steep downtrend that ended at an all-time low of less than 50 cents per share at the end of 2016. The stock was lifted by two rally waves in 2017 and hit $2.74 per share. These waves were followed by a rounded correction, which saw prices dip to around $1.60 per share.
The second quarter was a little better, and Bellerophon Therapeutics gained enough traction to achieve their prior high and break out. The three-year high was $3.30 per share. The price is now pulling back, making Bellerophon Therapeutics a low-risk buying opportunity for future gains.
Genesis Healthcare, Inc. (GEN)
Genesis Healthcare, Inc. (GEN) is a provider of short-term post-acute rehabilitation, nursing, and long-term care services based in California. After going public in 2007, Genesis Healthcare stalled in the mid-teens and broke down in 2009, entering a steep decline that led to share prices bottoming out at $1.43 per share in 2010.
Genesis rallied in 2011 and posted a lower high at $15.93 per share, which created a selling pressure that produced a trading floor just over $4 per share. It broke down again in 2016 for an all-time low of 60 cents per share at the end of 2017.
Since then, Genesis Healthcare gained significant traction for a 15-month high, which is expected to continue. Though still a speculative penny stock, the potential for Genesis Healthcare to come back to its original offering can mean big profits.
Senseonics Holdings, Inc. (SENS)
Senseonics Holdings, Inc. (SENS) is a medical technology company based in Maryland that designs, develops, and commercializes glucose monitoring systems to improve the quality of life of diabetic patients. In 2016, Senseonics Holdings shares hit $4.24 per share but declined well into 2017 to hit an all-time low of $1.26 per share.
Confident buyers led to a recovery wave that stalled at $3.60 in late 2017. The stock then completed a cup and handle price pattern, or a pattern that shows a “U” with a handle that has a downward drift, indicating a low trading volume and a bullish continuation pattern. This led to a breakout in June 2018, with share prices cresting at an all-time high of $5.29 per share and then pulling back slightly through the end of the month. Strong support at this level could provide a low-risk buying opportunity, which is ahead of the continued gains that could hit double digits.
Denbury Resources, Inc. (DNR)
Denbury Resources, Inc. (DNR) is a petroleum and natural gas exploration and production company that is incorporated in Delaware and headquartered in Texas. As we discussed before, the success of exploration and production companies is dependent on oil prices, so the value of Denbury Resources shares has been fairly volatile.
The all-time high came at $40.32 per share in June 2008 and was followed by a steep decline in global markets that resulted in a three-year low of $5.59 per share in November of 2008. The stock price began to rise in 2011 and then rolled over, entering another severe plunge that ended around 85 cents per share in 2015.
In September 2017, the stock appeared to turn around, entering an uptrend that reached the 2016 resistance of $4.80 per share in May 2018. The next pullback will be critical to the uptrend, potentially leading to $6 per share.
Ascena Retail Group, Inc. (ASNA)
Ascena Retail Group, Inc. (ASNA) is an American retailer of women’s clothing that owns such brands as Justice, Lane Bryant, and Maurice’s, as well as being the parent company of Ann Inc., the operator of the Ann Taylor and Loft stores. In 2014, Ascena Retail Group hit an all-time high at $23.14 per share and took a sharp downturn, breaking a two-year topping pattern in October. The downtrend continued into May 2017, reaching the lowest low since 1999.
The stock stayed at that price for nearly a year, finally taking an upward turn in May 2018 and breaking out above the range resistance at $2.70 per share. The gains are slowly increasing, which could mean an eventual rally into a strong resistance near $7, so the time to buy is now.
Neptune Technologies & Bioresources Inc. (NEPT)
Neptune Technologies & Bioresources Inc. (NEPT) is a company based in Canada specializing in wellness products with customized nutrition and specialty ingredients. In September 2007, the stock hit an all-time high of $6.09 per share, just a month after going public at $4.55 per share. It then fell into an all-time low at 35 cents per share during the collapse of 2008, followed with a bounce that came to a lower high above $5 per share in 2012.
A long-term downtrend that led into August 2017 ended above the 2008 high, which created a rally into February 2018. The stock pulled back at $2.25 per share and turned high in June, hitting a five-year high. Continued gains are expected, with the uptrend reaching the 2012 high of $5 per share.
Cerecor Inc. (CERC)
Cerecor Inc. (CERC) is a pharmaceutical company based in Maryland that focuses on pediatric health care. When it went public in November 2015 at $4.95 per share, it entered a trading range with a support at $2.70 per share and a resistance at $5 per share. The fourth quarter of 2015 brought a breakdown, starting a downtrend that would post an all-time low at 34 cents per share in April 2017.
The recovery wave reached the 2016 resistance in February 2018, leading to a rounded consolidation that followed a multi-year cup-and-handle breakout pattern. If it rallies above $5.75, it could attract strong buying pressure, bringing the stock into double digits.
Urologix (ULGX) is a company that develops therapy options for adults with an enlarged prostate. With over 30 million men suffering from this problem, this is a huge market with a lot of potential for profitability. If Urologix could capture even a small percentage of that market, their current share price of 20 cents per share could skyrocket into $2 per share.
Because of this earnings potential and the bullish chart, Urologix is expected to be a solid stock to own through 2018, with the potential to go even higher than $2 per share.
Rainmaker Systems Inc. (VCTL)
Rainmaker Systems Inc. (VCTL) is a company that focuses on learning management systems for Fortune 500 companies, such as HP, Abbott, and Ariba. It’s another stock with a low number of shares that’s looking to grow and target more Fortune 500 companies, giving them the potential for millions in profit. If such deals go through, Rainmaker Systems stock could see a significant increase. If the market cap reaches even 43 million, the price-per-share would go to $1.
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