Penny stocks. No matter how many times renowned investors and finance gurus warn you away from them, invariably, their siren calls lure you in. But unlike mythology, heeding their voices on those rare blue moons may mint new millionaires. If you’re looking for 10X-ing or even 100X-ing your portfolio, these extremely speculative vehicles are one way to go.
First, let’s keep the lawyers happy. Absolutely under no circumstances should anything I write be regarded as investment advice, especially toward treacherous penny stocks. Yes, you can make lifechanging money using this platform, just like you can make money off the lottery. It happens to someone. But the probabilities of you being that someone are minimal.
Second, let’s keep the lawyers’ paralegal team happy. Penny stocks are not only dangerous for your portfolio, they may negatively impact your mental health. According to BigThink.com, 20% of gamblers attempt to take their own lives. Make no mistake: wagering on high-risk, high-reward securities is legalized gambling.
But it’s also fair that we point out that most groundbreaking companies don’t start off as blue-chip titans. Rather, many get their feet wet through an idea and seek funding through capital markets to forward their vision. Even big names like Microsoft (NASDAQ:MSFT) were penny stocks when they made their public debut.
In other words, if you can control yourself and your emotions — and be sure to realize that there’s zero shame in taking profits — speculative companies can genuinely reward you. Just be sure to exercise tried-and-true budgeting discipline, gambling no more funds than you can afford to lose on these possibly viable penny stocks:
- Westwater Resources (NASDAQ:WWR)
- New Gold (NYSEAMERICAN:NGD)
- RF Industries (NASDAQ:RFIL)
- NexTech AR Solutions (OTCMKTS:NEXCF)
- Canaan (NASDAQ:CAN)
- Neos Therapeutics (NASDAQ:NEOS)
- Patriot One Technologies (OTCMKTS:PTOTF)
- Emerald Health Therapeutics (OTCMKTS:EMHTF)
- Champignon Brands (OTCMKTS:SHRMF)
Lastly, let’s keep the lawyers’ interns happy: I own a healthy share of speculative companies. That does not mean I personally endorse or recommend any of the below organizations. Please do your own research and due diligence. With these formalities out of the way, let’s discuss nine penny stocks to consider.
Penny Stocks: Westwater Resources (WWR)
Right off the bat, I know what you’re going to say. Priced above $7 at time of writing, Westwater Resources does not technically belong in a list of penny stocks under a literal interpretation. Here’s the thing: I’m going to start off with companies priced above a buck because I don’t want to go full-speculation mode.
Instead, I think it’s important to get you a slightly more reliable two-banger instead of a low-probability ten-bagger. And I believe that WWR stock has the potential to deliver the goods. In large part, that’s because of its underlying industry. As Westwater’s website declares, the company is “all in on graphite.”
Of course, this is significant because electric vehicles require a ton of graphite. According to Battery University, “a large EV battery requires about 25kg (55 lb) of graphite for the … [lithium-ion] anode.” Further, experts state that EV demand will likewise drive demand for graphite, which is net positive for WWR stock.
Again, penny stocks are terribly risky but if you can handle the heat, WWR has serious upside potential.
New Gold (NGD)
Back during the initial wave of the novel coronavirus, precious metals, particularly gold bullion made sense. As a traditional safe-haven asset, it represented an anchor against uncertainty. And boy, was there an overflow of uncertainty back in those days. Not surprisingly, even junior mining companies like New Gold transitioned from being pure penny stocks to breaching the $1 menu.
However, the perceived reassurances of the administration of President Joe Biden have taken the sheen off gold and NGD stock. After the events of that day in the Capitol, there was legitimate anxiety that another tumultuous incident would occur on Inauguration day. Fortunately, that never happened. Indeed, the end result was extremely muted relative to the worst-case scenario.
But don’t be fooled. Political and ideological tensions are sky high. While President Biden spoke of reconciliation, talk is cheap as the saying goes. More critically in my opinion, the economy is fractured. Therefore, the fear trade is still viable, which cynically bodes well for NGD stock.
RF Industries (RFIL)
Despite myriad relevant businesses, RF Industries was one of the penny stocks that were flying under the radar throughout much of last year. However, that suits RF CEO Robert Dawson just fine. In his words, he likes “outworking people” and surprising the competition with the results. While I’m not going to make any promises, 2021 could be the year where RFIL stock sends another shot across the bow.
RF Industries designs and manufactures interconnect products in several key industries, including wireless and network infrastructures, public safety platforms, distributed antenna systems and transportation. Further, it has exposure to aerospace/defense and the energy industries (utilizes and oil/gas). Although seemingly counterintuitive, I believe RFIL stock has underappreciated potential in these latter two segments.
On the defense front, conservatives portrayed Biden as being weak against our adversaries. To gain some consensus in Washington, I believe the administration will be more hawkish than right-leaning accusations imply. For the energy sector, go-green initiatives will take time. Thus, RF Industries will maintain robust revenue channels, making RFIL one of the penny stocks to watch.
NexTech AR Solutions (NEXCF)
Typically, when you think of augmented reality, you conjure up images of vapid kids running around layering goofy images over their selfies. Certainly, there is a component of that. However, AR increasingly has substantial ramifications of not only how we connect with each other but also in e-commerce, security and transportation, among many other segments.
That’s why if you’re looking for groundbreaking penny stocks, you may wish to consider NexTech AR Solutions. Unlike Snap (NYSE:SNAP), Facebook (NASDAQ:FB) or Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), NEXCF stock is a pure-play AR investment. In fact, the company bills itself as the first of its kind.
But it’s not just mere exposure to AR that makes NexTech compelling. Rather, its end-to-end solutions, whether for AR-based marketing campaigns, AR platform integration for e-commerce retailers or education and training protocols, allows NexTech to provide something for everyone.
Further, the new normal and recent evidence of lingering fears of infection will keep people in their homes for some time. This makes AR-based e-commerce platforms much more crucial, helping direct customers to appropriate products and cutting down on product returns.
Again, don’t go crazy over NEXCF stock or any other risky venture. But for forward-thinking speculators, NexTech may deliver for you.
At time of writing, Canaan shares are down double digits on a year-to-date basis. Although the underlying business is extraordinarily relevant — mining equipment for cryptocurrencies — that by itself doesn’t exempt penny stocks from volatility.
Honestly, you got to keep that in mind. Things can happen that just don’t make a lick of sense, yet they can devastate your speculation portfolio. Still, if you understand the risks — and yes, CAN stock is crazy risky because it’s tied to virtual currencies — there’s potentially money to be made here.
As you probably know, one of the major causes of the downfall in CAN stock is the red ink that the crypto market printed recently. Although there are many causes for the underlying assets’ correction, the bottom line is that people panicked. That’s something longtime crypto traders are used to.
However, keep in mind that big money is moving into cryptocurrencies. As a result, we should see increased demand for crypto-mining equipment. Indeed, that’s what recently happened when HIVE Blockchain Technologies (OTCMKTS:HVBTF) bought 6,400 mining machines from Canaan.
Neos Therapeutics (NEOS)
With Neos Therapeutics onward, we’re going to explore the “true” penny stocks: those securities that at the close of Jan. 22 were priced under $1. Now, before we get into it, please be aware that biotechnology firms are incredibly wild, often skyrocketing (or collapsing) based on clinical results.
If you’re curious, biotech penny stocks also bring out all the emotions among traders. Believe me, I’ve received more than an earful of F-bombs, combined with accusations questioning everything from my intelligence to my orientation. So, if you have strong feelings about NEOS stock, you may just want to keep them to yourself.
Having said that, Neos Therapeutics specializes in developing and manufacturing central nervous system-related products. Further, it’s important to note that the company has three approved attention deficit hyperactivity disorder (ADHD) drugs under its pipeline. NEOS stock may be risky but it’s not fair to characterize it as a shot in the dark.
Also, what makes Neos intriguing is its microparticle delivery technology. As research published on ScienceDirect.com articulates, microparticle technologies offer much potential for controlled and targeted drug release to address certain diseases.
Patriot One Technologies (PTOTF)
Among defense- and security-related penny stocks, Patriot One Technologies may be regarded as a political hedge. On the public front, President Biden has incentives to be tough on foreign adversaries like China and Russia. Again, given the accusations that Biden is a sellout, he’ll want to prove to a skeptical electorate that he can get the job done.
However, a crucial area where I believe skepticism is deserved is Biden’s plans for border security. It’s really sad that bad-faith arguments (typically involving charges of racism) have made border security a political issue. Frankly, without territorial integrity, a nation like the U.S. will cease to exist. But this is where PTOTF stock could become exceptionally relevant, perhaps for unpleasant reasons.
According to TheNation.com, the Biden administration wants to do away with President Trump-era immigration policies, including the “wall.” Allegedly, in lieu of physical barriers, the White House is seeking a virtual border. I think that’s disastrous. But it would likely increase demand for artificial intelligence-driven security sensors, which is what Patriot One specializes in.
Unfortunately, the southern border under Biden — indeed, all of our borders — appears destined to be a messy crisis. However, you might be able to benefit with PTOTF stock.
Emerald Health Therapeutics (EMHTF)
Very few companies demonstrate the highs and desperate lows of gambling on penny stocks than Emerald Health Therapeutics. A cleverly and euphemistically named cannabis company, Emerald Health saw its shares close at nearly $7 in early 2018. But from there, the bubble burst, sending EMHTF stock tumbling into the weeds.
And by weeds, I’m talking about a time of writing price under 20 cents. Logically, this could change by the time you read this. However, this kind of volatility demonstrates what you’re getting into when you purchase penny stocks.
Fundamentally, I do think Emerald has much to offer. Its focus on medicinal cannabidiol (CBD) is compelling. As everyone knows, stress has gone up because of the Covid-19 crisis, whether through job loss, family tragedy or a disruption to daily schedules. Under this environment, there’s huge demand for natural therapeutics like CBD, which could boost EMHTF stock.
Still, be very careful with Emerald. Yes, shares are steadily moving higher over the trailing six months. However, when shares are priced this low, there’s usually a reason for it.
Champignon Brands (SHRMF)
If you really want to supercharge your portfolio with high-risk, high-reward penny stocks, Champignon Brands may be your ticket. Levered to the burgeoning psychedelic medicine industry, SHRMF stock has previously demonstrated its potentially, closing near $2 in May 2020. Currently, shares are back well under a buck, but this also raises prospects for a repeat performance.
Unlike the cannabis industry, there is no foreseeable recreational market for psychedelics. With our country suffering from a severe opioid crisis — indeed, this was the health crisis prior to the coronavirus — recreational drugs outside of legal marijuana are simply out of the question. However, encouraging research is being conducted regarding psychedelic medicines, particularly in mental health.
Additionally, society is becoming more progressive on issues centering on personal liberties. Therefore, I anticipate greater demand for psychedelics. As well, the Covid-19 crisis has sparked its own mental health predicament. The problem, though, is that traditional medicines addressing such concerns often lead to addiction; hence, the opioid crisis.
Looking forward, psychedelics may provide a side effect-free or mitigated response among patients. And that might send SHRMF stock moving much higher from where it now stands.
On the date of publication, Josh Enomoto held a long position in gold and SHRMF.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.