Penny stocks are always going to be volatile and speculative in nature. There’s little investors can do about that. The inherent nature of penny stocks is risk. That means ups and downs are to be expected.
The smartest strategy is to research and find trends. While penny stocks are on average fraught with risk, there will always be winners. One of the best methods to find real value in this area of the market is to look for current catalysts that could vault the stock upward. The idea is that such companies will move from volatility into maturity once opportunities present themselves.
The list of companies and stocks below look to have proper catalysts in place currently. That means they have an opportunity in front of them. If they seize these opportunities, they can raise themselves onto a new plane in a business sense.
These remain risky, but investors with the right risk profile should keep these in mind.
- DarkPulse (OTCMKTS:DPLS)
- Senseonics (NYSEAMERICAN:SENS)
- Zosano Pharma (NASDAQ:ZSAN)
- Drone Guarder (OTCMKTS:DRNG)
- Great Panther Mining (NYSEAMERICAN:GPL)
- Ring Energy (NYSEAMERICAN:REI)
- Exela Technologies (NASDAQ:XELA)
Penny Stocks: DarkPulse (DPLS)
DarkPulse is a technology and security company undergoing rapid change. The company is either pivoting full-scale into the drone sector, or perhaps adding drone technology onto its existing technological focus.
The company’s primary focus is laser sensing systems. The company takes its name from its patented dark-pulse sensor technology. The technology provides infrastructure health and safety analytics.
DarkPulse has undertaken a rash of business activity in 2021, which is garnering it some attention. Part of what the company is doing relates to unmanned aerial surveillance and artificial intelligence (AI). Of course drones and AI are hot sectors, making DPLS stock interesting.
In April DarkPulse furthered its strategic partnership agreement with Remote Intelligence. The two firms signed a strategic partnership agreement to utilize Remote Intelligence aerial platforms paired with DarkPulse sensing technology.
In June it signed letters of intent to gain controlling interest in Remote Intelligence and Wildlife Specialists, drone mapping, modeling, and survey firms in the oil & gas industry.
Then, on June 30, DarkPulse announced it had acquired TerraData Unmanned, furthering its drone capabilities.
DPLS stock has risen from 2 cents to a current price of 13 cents. That price is alluring and indicates risk. But the promise here is massive in the growing drone space.
Senseonics is a promising penny stock for at least two reasons. One, it is making progress in the rapidly growing diabetes management sector. And two, SENS stock could simply get sent to the moon by fervent Reddit speculators.
Let’s start with the company and the progress it is making. Senseonics has developed and is in the process of commercializing an implantable continuous glucose monitoring system for diabetics.
Diabetes diagnoses are projected to increase 165% between 2000 and 2050 in the United States according to the American Diabetes Association. So, the management of diabetes will become even more critical.
Senseonics is not yet at the commercialization stage with its Eversense brand. But it has announced positive results of trials thus far. The company has legs in that sense. It is a biotech company with a real shot at making a dent in the industry.
The other reason SENS stock could move relates to short interest. Short interest currently sits at 21.35% meaning a short squeeze could be affected at any moment. That isn’t a great reason to jump into a stock by itself. But it does indicate that SENS shares could multiply in value quickly. From that perspective it could easily become a multibagger investment.
Penny Stocks: Zosano Pharma (ZSAN)
Zosano Pharma shares currently trade at 81 cents. So it’s easy to imagine that its stock could multiply based on positive news alone.
The company is attempting to commercialize Qtrypta, a migraine relief therapeutic delivered through a patch.
The company announced clinical data results regarding Qtrypta in late May. The study showed that: “Participants achieved pain relief at two hours post-dose in 81% of migraine attacks, pain freedom in 44% of attacks, and most bothersome symptom freedom in 62% of attacks. The majority of participants experienced cutaneous application site reactions where the Qtrypta patch was applied, of which more than 95% were rated as mild.”
Readers familiar with the biotech landscape will be unsurprised to discover that the company continues to report losses. In Q1 it posted an $8.1 million loss, incurring $5.3 million in research and development costs. It did manage to record $258k in service revenues after posting no revenue a year prior.
But the important thing to know is that the company maintains $26.9 million in cash as it inches closer to its commercialization goals. I would characterize it as a longer-term play worthy of a small amount of capital due to the nature of biotechs. Nevertheless, it could multiply and big risk takers would profit handsomely.
Drone Guarder (DRNG)
Drone Guarder is interesting for several reasons. One of which is because it trades at cryptocurrency prices. Shares can be bought for 0.55 cents as I write this. In other words, investors can scoop up nearly 2 shares for a single penny.
Share prices recently spiked on news that Video River Networks (OTCMKTS:NIHK) will acquire the company. The particulars around the deal are fairly opaque, making investment in DRNG a highly risky proposition. But the payoff could be large.
Video River Networks will provide Drone Guarder with $20k for 5.5 million shares of DRNG stock. Video River Networks will also pay to reinstate Drone Guarder onto the over the counter markets. That alone could send shares rising as news moves around.
Further, Video River Networks has brought on a Northrop Grumman (NYSE:NOC) veteran to oversee its drone and AI division. Again, all of this is highly speculative, but given the extremely low price of DRNG stock, it may be attractive and could easily multiply in price very quickly.
Penny Stocks: Great Panther Mining (GPL)
Great Panther Mining is a precious metals exploration firm based in British Columbia. Its mining operations include assets in Mexico, Peru, and Brazil. GPL stock currently trades at 58 cents and should be interesting for investors looking to play commodities and inflation worries.
It is no secret that inflation is rapidly becoming a serious concern in the U.S. economy. The latest figures from the Fed indicate that the June consumer price index rose by 5.4% over last year. Gold and silver miners including Great Panther Mining are experiencing a surge in interest as traditional bulwarks against inflation.
The company recently brought its Tucano mine in Brazil back online after assessing its safety. Great Panther Mining more than doubled its silver production in Q2 year-over-year. It produced 334,423 ounces of silver in Q2 ‘21, up 135% from the year prior. Gold production however, has lagged over the same span. It produced 22,804 ounces of gold in Q2 ‘21, down 37% from a year earlier.
Gold and silver will continue to fluctuate this year and GPL stock’s 58 cent price may rise quickly because of it.
Ring Energy (REI)
Ring Energy is an oil & gas exploration company operating in Texas. With oil prices rising, REI stock is worth considering. The good news is that REI shares have appreciated in price from 67 cents to $2.71 year-to-date. That’s 311% appreciation for investors lucky enough to have timed Ring Energy’s rise.
One factor to keep note of is that some of the rise is attributable to short interest. That short interest currently sits at nearly 20%. Short interest levels have remained at those high levels since at least February.
Ring Energy is bolstered by some promising numbers. First of all, it does have analyst coverage. The two analysts with coverage all assign REI a higher target price than it currently has. The low price target is $3.00 and ranges to $3.48.
Of course that is a small sample size, but the thrust is clear: Analysts do believe there is more value in Ring Energy right now. I’d also note that the company has beat the EPS consensus in each of the past four quarters. When companies beat earnings expectations that is usually a very good sign. It doesn’t necessarily mean the stock price will rise, but it is a positive signal nevertheless.
Penny Stocks: Exela Technologies (XELA)
Exela is a digital transformation solutions provider to more than 4,000 customers in more than 50 countries. It’s easier though to state that it operates in business process automation.
The company touches on almost every industry you could imagine. It provides solutions for every business department as well. The company currently works with 60% of the Fortune 100 as well.
Although XELA stock trades for under $5 per share, the company does boast strong revenues. It reported $300.1 million of sales in the first quarter of 2021. The company’s strategic operational focus is currently on deleveraging.
It announced a multi-year plan to reduce its leverage as it hopes to fund itself internally to a higher degree. It is also looking to post gains rather than the $39.2 million net loss it posted in Q1.
Exela completed a $100 million ATM offering in late June and announced plans for an additional $150 million ATM offering. The potential for dilution is certainly present. However, as the company relies more and more on equity financing, it will become more accountable to investors. There is potential that XELA stock will rise as the company will have more reason to reward investors.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
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.