As a penny stock expert, I’m used to seeing volatility — but last month was certainly one for the record books. While investors usually sell stocks in May because most of Wall Street is on vacation, this year the debt crisis in Europe was the fuel behind the market sell-off. And that caused the month to be the stock market’s worst May since 1940 – for big blue chip stocks and penny stocks alike.
But don’t listen to all the investors who say this is the end of the line for your penny stock portfolio. The fact is that market contractions like this provide great buying opportunities for investors, and savvy traders can purchase shares of great companies at great prices! The recovery is here, even if it seems a little backwards.
Certainly volatility will remain with us for awhile, so hang on for a bumpy ride in the short term – and get prepared to snatch up some more great stocks at bargain-basement prices on the down days. To help you identify these buying opportunities, here are my five top stock picks for June that are trading for less than $10 a share:
DDi Corp (DDIC): This is one of my favorite penny stocks to buy now. As I mentioned recently in an in-depth DDI Corp stock article, this tech stock has made a name for itself with its technological innovation of printed circuit boards or PCBs. Its boards are multi-layered, and it specializes in a quick turn-around (just 1-10 days) for its customers, which will be very important as the recovery gains ground and order volume swells. DDIC stock is up a whopping 66% year-to-date.
eResearch Technology (ERES): This healthcare penny stock specializes in providing technology and services to collect, interpret and distribute cardiac safety and clinical data to pharmaceutical and biotech firms. In plain English, eResearch functions as quality control for any prospective medication that hits the market. That’s a crucial business with almost limitless potential, especially as big pharma races to develop new drugs in its product pipeline. ERES stock is up 38% year-to-date and has a lot of room left to run.
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Ballantyne Strong (BTN): Ballantyne is a leader in the transition to digital and 3-D theater technology. It is not a huge company, but their workforce in Omaha is honed and dedicated. its theatre segment, which accounts for nearly all of Ballantyne Strong’s revenue, BTN produces digital and film projectors, screens and accompanying systems. Ballantyne can completely outfit a theater, from top to bottom, and is becoming a one-stop shopping mall for folks who want to get a movie theater up-and-running, or to retrofit an older establishment with digital or 3-D technology. This penny stock has more than doubled so far in 2010 and is still looking red-hot.
Lionbridge Technologies (LIOX): Lionbridge provides language, development and testing services to businesses all over the world. In fact, its customers generate more than half of their revenue from outside of the United States. Most people automatically think of technology companies when they think about globalization. However, Lionbridge has clients not only in the technology sector, but also scores of businesses operating in almost every sector, including consumer packaged goods, biotech, publishing, banking and even in government agencies worldwide. This diversification allows Lionbridge a diverse customer base that minimize risk and maximize profits for shareholders. LIOX stock has more than doubled so far this year and remains a great investment.
Power-One (PWER): Don’t let the reasonable share price fool you — Power One is one of the top 10 providers of power conversion and power management solutions in the world. Along with the rest of the industry, the telecom bust and last year’s recession severely impacted its coffers – but recently the company’s dedication to trimming the fat has paid big dividends, and now PWER stock is back in growth mode with an ambitious expansion strategy. Power-One is up 70% since January 1.
As of this writing, Nancy Zambell was recommending all of the stocks named here to subscribers of her paid newsletter, Buried Treasures Under $10.