It can be very boring to play it safe 100% of the time. Especially in these times when undisciplined investing seems to be all the rage. And even though some of the current investing trends can seem downright unbelievable, they can and do pay off. It makes it difficult to simply play it safe, sit on the sidelines, and get some skin in the game. In case you haven’t been paying attention, Reddit users have given a ton of these extremely risky stocks a huge boost this year. It probably doesn’t make much sense to dedicate a large chunk of capital toward risky Reddit penny stocks, but there’s certainly an argument in favor of establishing a position.
Further, many Americans are still awaiting their third stimulus check. The most prudent among them will immediately sock it away into their 401k, IRA, and other traditional, low-risk investments. Others will scream YOLO, plow the entirety of it into Dogecoin (CCC:DOGE-USD), and begin the wild ride. I’d argue that moderation is the key.
That’s why $100 invested in Reddit penny stocks can make sense for many. It’s the middle ground. So, if you’re interested in potentially big returns and have $100 sitting around, these Reddit penny stocks might be just what you’re looking for:
- Uranium Energy Corp (NYSEAMERICAN:UEC)
- CTI BioPharma (NASDAQ:CTIC)
- American Resources (NASDAQ:AREC)
- Immutep (NASDAQ:IMMP)
- Naked Brand Group (NASDAQ:NAKD)
- Super League Gaming (NASDAQ:SLGG)
- Allied Esports Entertainment (NASDAQ:AESE)
Reddit Penny Stocks: Uranium Energy Corp. (UEC)
An investment in Uranium Energy Corp. certainly has reasonable catalysts right now. Many investors are considering investing in precious metals as a hedge against recent inflation. Thus, gold and silver have again become hot topics. Uranium isn’t a precious metal, but it will probably benefit from inflationary concerns anyhow. The spot price of uranium increased a modest 5% between March and April, which should also help UEC stock.
The company itself recently announced that it had acquired an additional 200,000 pounds of uranium. Uranium Energy now has 2.305 million pounds of U.S. warehoused uranium. It also announced that it has acquired 1 million additional shares of Uranium Royalty Corp. (NASDAQ:UROY) and maintains a strategic ownership position in UROY.
Canaccord Genuity analyst Katie Lachapelle gives it a $3.75 price target, while analyst consensus is higher at $4.38. While it is good to have Reddit on your side, it’s also nice to know that Wall Street believes in UEC stock as well.
CTI BioPharma (CTIC)
CTI BioPharma is a small biotech company that develops, acquires, and commercializes therapeutics for blood-related cancers. Like many other small biotech firms, CTI BioPharma is going to be very much hit or miss. The company’s only candidate drug is pacritinib, which is being evaluated for use in patients with myelofibrosis. It has been given priority review by the FDA for treatment of myelofibrosis with severe thrombocytopenia.
Investors who consider CTIC stock based on its current financials won’t find much to get excited about. CTI BioPharma follows the traditional path that most biotech firms do. It reported a $17.1 million operating loss in the first quarter this year and an $11.9 million loss in the same quarter a year prior. It issued a bunch of stock and raised $53.5 million in early April. None of that is unexpected in biotech.
As with most attractive biotech stocks, CTI draws investors’ interest with significant catalysts. CTI BioPharma’s catalyst is that it is awaiting priority review for pacritinib and a Prescription Drug User Fee Act (PDUFA) action date of Nov. 30, 2021. Thus, investors could expect a commercial launch by late 2021 and a real opportunity for a spike in revenues.
Reddit Penny Stocks: American Resources (AREC)
American Resources is a company whose business centers around metallurgical coal, rare-earth minerals and scrap iron.
Metallurgical coal is that which is utilized in the production of steel. As U.S. infrastructure plans galvanize, companies like American Resources will have plenty of ability to appreciate in price, returning gains to investors.
The primary reason that rare-earth minerals are attractive from an investment standpoint is that domestic supply chain concerns about such critical resources are important currently. It also has an exclusive technology license and it looks to become a prominent name in electrification as it relates to rare-earth minerals.
Its scrap iron business looks to leverage built in rail infrastructure advantages to ship scrap iron as iron production increases.
American Resources is not improving from a financial perspective, and much of AREC stock’s recent gains are based on potential. Losses nearly doubled in this year’s first quarter as compared to those in the first quarter of 2020. But it doesn’t seem to have affected the company at all and the company is restructuring to take advantage of recent catalysts, which will likely serve to raise share prices moving forward.
Immutep is right on the cusp of breaking free of the traditional $5 and under penny stock definition. And a recent press release might serve to vault it out of that territory. Nevertheless, it is a worthy mention on this list.
The Australian biotech develops cancer treatments and released positive data from a Phase 1 study. The company is evaluating its lead product candidate called “efti” or “IMP321” in patients with solid tumors. The evaluation is showing promising results and the “Objective Response Rate of 41.7% (5/12) demonstrates encouraging early activity signals from this all comer trial. All responders (5/12) reported a partial response (PR) to the combination therapy.”
Yes, penny stocks and biotech stocks are inherently risky. And yes, this single positive development still leaves Immutep several important steps away from commercialization. But that is the game one has to play here. And with $100 investors could snatch up roughly 20 shares of IMMP. It’s high-risk without the potential for a big loss.
Reddit Penny Stocks: Naked Brand Group (NAKD)
Investors who are familiar with Naked Brands and its Reddit fueled story might agree with me when I state that now is as good a time as ever to buy into NAKD stock. Basically, the flagging retail company used Reddit’s enthusiasm earlier in 2021 to issue a bunch of stock to finance its shift toward e-commerce, spiking the price. I believe it’s a great example of striking while the iron is hot.
Some might disagree with me and instead see a has been abusing the stock market to save itself from imminent demise. Wherever your personal opinion lies, the fact remains that Naked Brands continues to pivot toward its e-commerce strategy. That’s what impatient Reddit investors bought into. Now they’ll simply have to wait for that bet to provide returns.
The point here is that taking $100 and buying up NAKD stock could yield strong returns in the long term. NAKD have been hovering between 70 and 80 cents the past several days, which means investors could snatch up potentially as many as 140 shares for $100. NAKD’s past price is warped by two reverse splits, but it’s still worth considering it as a company that once traded for much more than it does now. There might be a great story there for patient investors as Naked Brands moves into e-commerce.
Super League Gaming (SLGG)
Super League Gaming is all about connecting gamers. As the company’s website states: “Super League’s mission is to be an amateur esports experience platform that connects and celebrates players, regardless of their age, game, or skill level.”
Gaming has evolved from focusing primarily on small-scale experiences with a few friends in the same room to globally connected experiences. The content creation aspect of gaming and the emergence of online gaming can’t be overstated in connection to the rise of gaming’s popularity.
The company is also growing through acquisitions. On May 27, shareholders approved a 12.6 million share issuance to fund the company’s acquisition of Mobcrush. The acquisition will give Super League Gaming a monthly audience size of 75 million people. It’s fairly obvious why investors would be willing to throw $100 into 20 SLGG shares given how prevalent gaming culture has become.
Reddit Penny Stocks: Allied Esports Entertainment (AESE)
Continuing along the online gaming angle, the next Reddit penny stock worth considering is Allied Esports Entertainment.
Much like the previous company on this list, Allied’s goal “is to connect players, streamers and fans via integrated arenas and mobile esports trucks around the world that serve as both gaming battlegrounds and every day content generation hubs.” The company also seeks affiliate partners who might be interested in opening esports facilities globally.
Allied Sports Entertainment is very much still trying to find its footing in a financial sense. Revenues decreased 53% in the first quarter compared to the first quarter of 2020, and the company suffered a $5 million loss from continuing operations during the same period. But the company maintains an $18.5 million cash position, meaning it is at little risk of going under. It is certainly among the riskier plays on this list, but the gaming and content angles mean it could quickly take off once it catches on and in-person gaming experiences return following the pandemic.
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Thomas Yeung is an expert when it comes to finding fast-paced growth opportunities on Reddit. He recommended Dogecoin before it skyrocketed over 8,000%, Ripple before it flew up more than 480% and Cardano before it soared 460%. Now, in a new report, he’s naming 17 of his favorite Reddit penny stocks. Claim your FREE COPY here!
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.