There is no better place to find explosive growth than with low-priced penny stocks. I’m not talking about pink sheet stocks that are potentially nonexistent, or fraudulent names set to crash. I’m talking about real companies with real earnings — companies listed for more than one year on a major exchange like the AMEX, NYSE or Nasdaq, and that have a market cap in the ballpark of $100 million.
The returns can be even more powerful when you combine the power of technology stocks and penny stocks. Specifically, the software space is seeing lots of action thanks to the mass acceptance of smart phones and personal computing devices.
These devices are quite powerful, but they still need programs to make them run. The best software companies are those that make users more productive. In this tough economy, those companies that help workers do more with less are poised to be the penny stocks that really move higher.
Because these companies have the wind at their sails from an earnings perspective, these penny stock prices will not last long. Now is the time to pounce before the rest of the market catches on.
Here are six software penny stocks to buy now:
NetSol Technologies (NASDAQ:NTWK) is a penny stock with a near $100 million market cap. This is a real company with real products and real revenues. The company makes application software for the automobile finance and leasing industry as well as the banking, financial services and healthcare industries globally.
Shares have drifted lower since peaking near $2.40 per share earlier this year. You can buy this penny stock today for just $1.60 per share. That is a bargain that you should exploit.
NetSol beat estimates in the last quarter by 4 cents per share. Look for a similar result when it announces quarterly results. For the full year, the expectation is for a profit of 18 cents per share. If the company does better than expected, this stock could really take off.
The penny stock Cover-All Technologies (AMEX:COVR) has a market cap of $63 million and is part of the Russell micro cap index. In May, the stock was listed on the AMEX exchange taking shares off bulletin board status. The stock has gained about 50cents per share since that time.
Cover-All Technologies is in the business of providing software products and services for the property and casualty insurance space. That sector has been getting headlines this year with the uptick in natural disasters and inclement weather. Any chance to save money with technology will be more likely to be advanced under more difficult financial times.
Cover-All is profitable and expected to make seventeen cents per share in the current fiscal year. That number jumps 3 cents to 20 cents per share in 2012. The company has beaten estimates in the last two quarters. You can buy that 17% growth for less than 15 times estimated earnings.
One of the problems owning penny stocks is trading volume is thin and liquidity makes it tough to sell shares for a profit. In the case of Top Image Systems (NASDAQ:TISA), we have a stock that sees an average of 300,000 shares trading hands each day. Clearly this stock will be followed by a fairly large group of investors.
Top Image system is in the business of making software with respect to data capture and manipulation. This Israeli-based company was founded in 1991. Shares of the company blasted higher in early May after the company reported positive results for its first quarter of 2011.
In the period, the company saw a 36% increase in revenue and posted a profit of seven cents per share as opposed to a loss in the year prior. That was enough to move the stock from $1.34 per share to $2.20 per share. Those are the types of moves you can expect from a penny stock when it delivers solid operating performance. I expect a repeat performance in future quarters.
Authentidate Holding Corp. (NASDAQ:ADAT) is in the business of making the health care industry less paper-intensive. Offering web-based solutions for health systems and physician groups, this penny stock has nearly doubled in value since early April.
I don’t think the gains are done there. This sort of momentum is what I like to see. Historically riding these waves of momentum has been very lucrative to me and my investors.
Authentidate is growing and continually adding to its impressive roster of customers. Most recently the company signed a deal with the Department of Veteran Affairs to provide telehealth solutions. The company is expected to lose money in 2011, but to be profitable in 2012. If so, the stock will double again from here.
Cinedigm Digital Cinema
Penny stocks can be quite volatile. Shares of Cinedigm Digital Cinema (NASDAQ:CIDM) have been on a roller coaster this year. In mid-March the stock caught fire and jumped a dollar per share over the course of a couple of months. Since that time, shares have given up half that gain to the ballpark of $1.90 per share.
Use the selling to get in on this penny stock ride. Cinedigm provides technology solutions and digital content to theater exhibitors. The company just completed a year of operating losses that it expects to sharply narrow in the 2012 fiscal year. Sales are growing rapidly and that is what investors should focus on today.
To the extent they beat expectations, profitability may arrive sooner than later.
Mind CTI (NASDAQ:MNDO) is an Israeli-based technology company that provides convergent end-to-end billing and customer-care product-based solutions for service providers as well as telecom expense management solutions. After peaking at nearly $3.60 per share, the stock has slipped to current levels at $2.80 per share.
The move lower comes on the heels of a less-than-stellar quarterly earnings report for its first quarter ending March 31, 2011. Year over year revenue in the period was lower, but the company did post a profit of six cents per share. In addition to reporting a backlog to be recognized this year of $10.2 million Mind CTI had previously declared a cash dividend of 32 cents per share.
With telecom and wireless being all the rage around the globe, I expect Mind CTI to perform quite well for the remainder of the year.