Penny-stock investing involves risk, but there’s no reason to make your investments gambles that are based on little more than luck. Though “penny stocks” can mean pink sheet investments with little capital or market requirements, the moniker also applies to low-priced stocks trading for just a dollar or two — and many of these picks trade on major exchanges and a few even have analyst coverage.
When you invest in penny stocks, these are the investments you should seek out. While they are still high-risk, they are more stable investments that meet a higher level or quality. To show you what I mean, here are seven telecom penny stocks that you may want to consider. All trade on a major exchange (the Nasdaq) and all are fast-moving small-cap stocks trading for just a few dollars a share:
Westell Technologies (WSTL)
Westell Technologies (NASDAQ: WSTL) is a holding company whose subsidiary, Westell, designs and distributes telecommunications products. Year-to-date, WSTL has gained 147.5% compared to gains of 11.4% and 7.7% by the Nasdaq and Dow Jones. Over the past two weeks, this penny stock has taken off, rising 33.8% in that time. Westell has also outperformed earnings estimates for four consecutive quarters. This stock currently trades at $2.92, which is just 6 cents off of its 52-week high.
Optibase (OBAS)
Optibase (NASDAQ: OBAS) develops, markets and sells equipment for professional video applications in the broadcast, government, enterprise, post-production and Internet protocol television markets. Since January, OBAS stock is up 16.5%. This penny stock has shown strong performance since Sept. 1, having gained nearly 14%. At $1.55, OBAS is a very inexpensive stock to add to your portfolio.
Powerwave Technologies (PWAV)
Telecommunications company Powerwave Technologies (NASDAQ: PWAV) is a global supplier of end-to-end wireless solutions. Powerwave works primarily with wireless communications networks. In 2010, PWAV stock has climbed 73.8%, compared to smaller gains by the broader markets. Powerwave has outperformed earnings estimates for two straight quarters, prompting experts to up their earnings estimates a cent higher than last quarter’s EPS. This penny stock is just two cents off its 52-week high.
Aware (AWRE)
Aware (NASDAQ: AWRE) supplies products for the biometrics and digital subscriber line test industries. The company also sells software products to its various clients. Since the start of September, AWRE stock has jumped 26.1%, and the penny stock is up 3.6% overall on the year. Aware’s stock currently trades at $2.84, or 90 cents higher than its 52-week low.
Sonus Networks (SONS)
Sonus Networks (NASDAQ: SONS) provides voice, video and data infrastructure solutions to wireless and wireline telephone service providers. SONS has climbed steadily in 2010, and is up 51.7% year-to-date, compared to smaller gains by the broader markets. Additionally, Sonus has met or exceeded earnings estimates for four straight quarters. At $3.18, SONS is one of the more expensive penny stocks on this list, but still offers a great buying opportunity at a low price.
Extreme Networks (EXTR)
Tech company Extreme Networks Inc. (NASDAQ: EXTR) provides network infrastructure equipment and services to data centers and telecommunications service providers. Some of Extreme’s biggest clients are hospitals, schools, hotels and government agencies. Since September, this penny stock has gained +16.5% compared to smaller gains by the broader markets. EXTR has also met or exceeded earnings estimates the past three quarters. This penny stock currently trades at $3.20.
Telular (WRLS)
Telular (NASDAQ: WRLS) designs, develops, and distributes products and services that provide data and voice connectivity among people and machines. Since September, WRLS stock has gained 15.8%. In its last income statement, Telular reported an impressive net profit margin of 8.7%. Trading at $3.45, WRLS rounds out the list of penny stocks to buy.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.
