Penny stocks are the ultimate Pandora’s box of the investment market. Though financial advisors constantly warn people away from them, many don’t listen. Why? Perhaps it is that foreboding advice that entices folks even more.
Despite the poor reputation of penny stocks, though — (has anyone not seen The Wolf of Wall Street?) — they do have an admittedly universal allure. After all, many of the top-notch companies we celebrate now started off in the same way — priced in low single-digit territory, if not lower.
Beyond that, it’s very possible that you can make life-changing investments with ultra-cheap picks. For instance, we’ve recently seen what even completely out-of-favor companies like GameStop (NYSE:GME) can do. For much of last year, GME shares were trading in single-digit territory. Today, they’re in the high double digits and possibly moving higher.
However, you also want to make sure that you’re not putting all of your eggs into one basket, so to speak. Recently, Naked Brand (NASDAQ:NAKD) soared because of the seemingly coordinated effort on social media to boost unpopular companies with heavy short interest. But that effort failed very quickly.
So, you’re taking huge risks by trading in this sector. That said, if you still want to implode your portfolio, here are 10 penny stocks to consider that are under 10 cents. Just take this list with a few hundred grains of salt — these are still incredibly risky, entertainment-value picks.
- American Nortel Communications (OTCMKTS:ARTM)
- Gourmet Provisions International (OTCMKTS:GMPR)
- Pharmagreen Biotech (OTCMKTS:PHBI)
- United American Petroleum (OTCMKTS:UAPC)
- Poverty Dignified (OTCMKTS:PVDG)
- Innerscope Hearing Technologies (OTCMKTS:INND)
- Mountain Energy (OTCMKTS:MTEI)
- Viper Networks (OTCMKTS:VPER)
- Utilicraft Aerospace Industries (OTCMKTS:UITA)
- Social Life Network (OTCMKTS:WDLF)
American Nortel Communications (ARTM)
Barely making the 10-cent criteria for this list of penny stocks, shares of American Nortel Communications closed at 9.9 cents on Feb. 5, though now they’re closer to 17 cents. Yes, we’re now in kooky-ville, dealing with the lowest tier of the investment markets.
Still, does ARTM stock have a somewhat viable thesis? Personally, I don’t think so. However, the company announced last year that it “has over 100,000 interactive maps to assist prospective movers.” These maps are connected to the company’s Newborhood.com site, which was suddenly relevant during the novel coronavirus pandemic as Americans sought to relocate to the suburbs or even rural areas.
Nevertheless, my hesitation with this pick of the penny stocks is that it jumped wildly on Jan. 29, indicative of a pump and dump. Also, its interactive-maps announcement hardly moved the needle. So — like with many of these picks — buy it at your own risk.
Gourmet Provisions International (GMPR)
The narrative for Gourmet Provisions International has really come alive, mainly due to its acquisition of Pizza Fusion. The concept is a simple but solid one — bring gourmet-style pizza to the frozen-food aisle. Naturally, the Covid-19 crisis has strong implications for GMPR stock.
With just about everyone stuck at home for most of last year, millions of Americans are ready to have some semblance of normalcy in their lives. What better way to do that than through pizza? Even better, Pizza Fusion has gluten-free products and incorporates healthy ingredients, which could lift the stock.
Of course, competition is a huge concern. And even if the pizza is good, many consumers are struggling to get by. Therefore, like other penny stocks, invest with the mentality that you’re going to lose it all.
Pharmagreen Biotech (PHBI)
Penny stocks are known to jump wildly for little to no perceived reason and Pharmagreen Biotech is a perfect example. On the Feb. 5 session, PHBI stock jumped well over 150%. Over the trailing five-day period — using Feb. 5 as the anchor point — shares are now up some 200%. Something’s going on and I really don’t know what.
Let me back up a moment. On its website, Pharmagreen states that it’s a biotech sciences firm specializing in the cannabidiol (CBD) hemp industry. As you know, President Joe Biden promised during the campaign cycle that he would decriminalize marijuana. That has driven up momentum in cannabis-related investments. Presumably, this is what happened to PHBI stock.
However, I can’t find anything specific to this company that would explain the jump. So, to me this is a sentiment play on the hopes of full legalization and a buildout of the U.S. cannabis market. It could happen — but like other 10-centers, this name is super risky.
United American Petroleum (UAPC)
Another big mover in the wild world of penny stocks, United American Petroleum saw its shares leap over 50% on the Feb. 5 session. Scouring the news, I don’t see a reason why UAPC stock should move that high. To be honest, I don’t even know how to assess the company’s prospects.
That’s the thing about these kinds of stocks — information can be lacking. And the underlying racket that could be going on with some of these names is uncomfortable, to say the least.
However, if there is a broader fundamental case for UAPC, it’s that we could be near the end of the tunnel regarding the pandemic. Vaccines are out and, anecdotally, I see traffic picking up. That could bode well for United American Petroleum, though I must note the caveat that this is strictly a gamble.
Poverty Dignified (PVDG)
As you might guess — even if you don’t know much about the financial markets — penny stocks have a poor reputation. And that’s putting it generously, as some companies are outrageously putrid. However, Poverty Dignified appears to be a business concept that I can get behind.
From the description listed on Reuters, Poverty Dignified is a renewable energy company “engaged in developing micro-franchise business concepts for the energy needs of poor households in rural and peri-urban areas across the globe.” If this is true, I believe that PVDG stock hits the core elements of ESG (Environmental, Social and Governance) investments… on paper.
With this stock trading hands at less than 10 cents at the time of writing, it’s hard to feel confident. Further, the business model has to make sense. But I’ll give credit where it’s due — the shares of this pick have absolutely soared over the last 30 days.
Innerscope Hearing Technologies (INND)
One of the peculiarities of penny stocks is that, in many of the extremely speculative cases, the underlying companies either don’t have a website or don’t have one that is easily found. Fortunately, that’s not the case with Innerscope Hearing Technologies, a hearing-aid specialist that provides myriad solutions for the hearing impaired.
According to the World Health Organization (WHO), hearing loss is projected to affect 630 million people worldwide by 2030. Therefore, INND stock is levered to a somewhat burgeoning market. Plus, with baby boomers now advancing in age, you might figure the company has a viable market right here at home.
Will that be enough to sustain this stock? Probably not. I’m not saying that because I don’t believe in the underlying company — it’s just that penny stocks are so often unsuccessful. Still, if you’re feeling the urge to gamble, INND is one of the better-looking opportunities.
Mountain Energy (MTEI)
When it comes to Mountain Energy, we’re really diving into the wilderness. At the time of this writing, MTEI stock is trading hands at less than three cents. On paper, the company leases and purchases oil and gas mineral rights nationwide. So, if you own viable property and need cash flow right away, Mountain Energy is apparently a go-to organization.
Presumably, the big picture case for this company is also growing more favorable. Based on the latest data from the Centers for Disease Control and Prevention (CDC), Covid-19 infections are noticeably on the decline since the early January peak. That implies — if the trend continues positively — that we’ll see a gradual return to normal activity, boding well for the oil and gas industry.
I’ll just leave it at that since I don’t want to jinx it. However, should you gamble on MTEI? Personally, I’m in no hurry to deal with these unpredictable penny stocks. But I’ll leave that decision up to you.
Viper Networks (VPER)
Priced at around two cents on Feb. 5 and now trading at five, Viper Networks will immediately turn off most conservative investors. This is the kind of speculative pricing that makes even long-time advocates of penny stocks question their trade. Still, look beyond this issue and VPER stock has some intriguing qualities to it.
Primarily, I say this because of the stock’s underlying business. Billed as a smart-city and Internet of Things (IOT) products manufacturer and service provider, Viper is certainly in a relevant field. For instance, the company offers wireless and smart grid applications that will cater to next-generation urban centers. On top of that, its 360-degree view camera facilitates several security-use cases.
However, as much of a gambler as I am, I’m not too sure about betting on VPER stock. But if you’ve got those “diamond hands” that everybody keeps talking about these days, you may want to give it a look.
Utilicraft Aerospace Industries (UITA)
About as risky of a name as you can get among penny stocks, Utilicraft Aerospace specializes in “aircraft engineering, leasing, and maintenance repair and overhaul services, as well as jet charter services” according to Seeking Alpha. Of course, with the pandemic running around, UITA stock doesn’t offer a confidently bullish thesis, to say the least.
However, that could be changing over the next several months. While it has its criticisms, the Covid-19 vaccine rollout appears to have played a significant role in the reduction of infections.
Still, what worries me is the lingering economic damage due to the outbreak. Like the other “investments” I’ve mentioned above, I’m not getting the warm and fuzzies over UITA. However, if extreme contrarianism is your thing, you may want to give this pick a once-over.
Social Life Network (WDLF)
With Social Life Network, we’ve come to the end of the road on our list of penny stocks. Currently priced just below three cents, WDLF stock certainly “earns” inclusion here based on the below-a-dime criteria. But is there a viable case for the underlying company?
Social Life is a technology business incubator (TBI) which provides social media and e-commerce startups with digitalization resources that can help these small enterprises get up and running quickly. Moreover, part of how the company distinguishes itself from other TBIs is its utilization of artificial intelligence (AI) and blockchain. That allows it to learn online behaviors of prospective customers and develop more profitable platforms for its clients.
I also have to give Social Life Network credit — management has an impressive website and investor pitch deck despite the fact that, again, WDLF stock trades for a few cents. Still, you should be very careful about diving into this pick because of the competition risks, among many other challenges.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, the InvestorPlace staff writer primarily responsible for this article held a long position in GME.