In a development that’s a mixture of encouraging and unnerving, the novel coronavirus pandemic and the resultant lockdown measures helped push people to the financial markets. That was a positive, particularly from the perspective of financial advisors who bemoaned that younger folks didn’t invest as much as they should for the future. But during this enthusiastic backdrop arrived penny stocks to buy.
Ask anyone who’s been involved in the capital markets for some time and probably most of them will admit to gambling on penny stocks — or at least having considered it. Unlike blue chips, these speculative vehicles are incredibly unpredictable. But the fact that they can go anywhere on a whim means that sometimes, you can ride them before they make their big move higher.
No one is immune from the temptations involved with penny stocks to buy. However, the pandemic-disrupted year of 2020 created unprecedented incentives for these risky trades. For one thing, a lot of folks were at home with nothing to do. Next, the federal government came in with stimulus checks, which is a bad combination; you know, idle hands being the devil’s workshop and all.
If you had monitored the rumblings on social media, you may have arrived at the conclusion that eventually, penny stocks will have their day in the sun. Of course, public sentiment can also turn on a dime, making investing with the crowd — especially regarding speculative vehicles — a dangerous approach. Nevertheless, you may be able to lessen this risk profile by choosing companies tied to the relevant technology sector.
To be clear, that’s no guarantee that you’ll succeed. When equity units are priced into the doldrums, there’s usually a reason for it — and probably not a good one. However, if you’re willing to accept the risks, penny stocks offer tremendous upside potential. Here are a few companies to consider with the “dumb money” portion of your portfolio.
- Kopin Corporation (NASDAQ:KOPN)
- Ceragon Networks (NASDAQ:CRNT)
- Boxlight (NASDAQ:BOXL)
- Amplitech Group (NASDAQ:AMPG)
- Creative Realities (NASDAQ:CREX)
- Borqs Technologies (NASDAQ:BRQS)
- eMagin Corporation (NYSEAMERICAN:EMAN)
While receiving compliments from readers who have benefitted from my speculative ideas is always nice, I must warn you: penny stocks trade on their own cadence. With no rhyme nor reason, you don’t want to invest any more than you can afford to lose.
Tech Penny Stocks to Buy: Kopin Corporation (KOPN)
Usually, analysts consider penny stocks to be publicly traded securities priced at $5 or less. At just under $7 at time of writing, shares of Kopin Corporation wouldn’t technically make the cut. However, I’m going to take some liberties here and plug it in on this list of cheap speculative plays due to its intriguing business.
Specializing in the development of innovative wearable computing technologies and solutions, Kopin provides relevant products for military, enterprise, industrial, medical and consumer markets. I’m particularly interested in the military and law enforcement applications as both domestic and international circumstances have become challenged, to put it diplomatically.
Further, Kopin’s thermal imaging solutions offer substantial utility for first responders, such as firefighters. Again, I think it’s a relevant product line considering the record-breaking wildfires we’ve seen over the trailing year.
Most convincingly, the financials undergirding KOPN stock are solid. Revenue in 2020 was up 36% from 2019 results, while Kopin is carrying the growth momentum forward in its latest first-quarter earnings report. While you shouldn’t take wild bets with penny stocks, KOPN is down nearly 50% from its 2021 closing high.
Ceragon Networks (CRNT)
Priced more into what many people traditionally consider penny stocks, shares of Ceragon Networks currently sit at $3.49. However, in January of this year, CRNT stock closed at a high of $6.46, providing would-be speculators with a sizable 46% discount.
Unlike other penny stocks that are only attractive because they’re cheap, Ceragon Networks offers potentially significant commercial value. According to its website, Ceragon “delivers innovative wireless backhaul solutions” designed to increase operational efficiencies and improve enterprise clients’ end-customer experiences. With its acumen in 5G-related services, CRNT stock is very well positioned.
Moreover, the company can transition to myriad industries, ranging from mobile and telecom networks (particularly in addressing wireless backhaul challenges), oil and gas, public safety and utilities. With society vigorously returning to normal, a wager on Ceragon might make sense.
The financials bear this out. Yes, in 2020, Ceragon saw revenue slip to $262.9 million from $285.6 million, an 8% loss. However, in Q1 2021, it generated top-line sales of $68.3 million, up 22% from the year-ago quarter. With Q1 being historically weaker than the other quarters of the year, CRNT seems to be off to an auspicious start in 2021.
Tech Penny Stocks to Buy: Boxlight (BOXL)
When it comes to education in America, it’s hard not to get discouraged. According to a Washington Post report in 2019, U.S. teenagers lagged their counterparts in East Asia and Europe in reading, math and science. One factor that could help narrow the gap, though, is education technology or edtech.
Based on expert analysis, the global edtech market value totaled nearly $75 billion in 2019. But by 2027, this sector could reach nearly $319 billion, or roughly a 20% compound annual growth rate during this period. That’s an excellent backdrop for Boxlight, an edtech company that specializes in integrative software solutions for academic institutions.
One of the reasons why Boxlight is distinct from the competition is that it doesn’t force schools to adapt to a new system. Rather, the Boxlight platform works with already existing content; essentially, it’s a modular add-on. Further, educators can work under one software interface, making utilization seamless.
Better yet, BOXL is one of the most compelling penny stocks to buy. Enjoying a sharp discount from its February highs this year, BOXL could swing higher based on increasing demand for effective educational tools, particularly in the post-Covid era.
Amplitech Group (AMPG)
Featuring an array of next-generation solutions, Amplitech Group, a radio frequency (RF) components manufacturer, found itself struggling for traction over the years despite the relevancy of its underlying business. For instance, over the trailing year, AMPG stock has been in and out of penny stock territory.
Currently, shares are priced at $4.16, which would be on the higher end of what most folks would regard as penny stocks. Still, I’m confident that if the wind blows in the right direction, AMPG will again attract significant attention. On Feb. 16 of this year, the equity unit closed at $18, making this an intriguing high-risk, high-reward opportunity.
According to its website, Amplitech specializes in custom RF components for commercial, satellite communications, space and defense markets; in other words, all super-relevant industries that will only grow in importance. Further, the company developed products to accommodate both 5G and 6G wireless ecosystems, thereby preparing for long-term solutions.
Still, we’re talking about penny stocks and not everything about AMPG is encouraging. Primarily, its Q1 2021 sales of $470,000 is down 38% from the year-ago quarter. This is disappointing considering that in full year 2020, Amplitech saw revenue increase by nearly 11%.
Tech Penny Stocks to Buy: Creative Realities (CREX)
Billed as a provider of innovative digital marketing technology solutions for enterprises and individual brands, Creative Realities may benefit from the sharp paradigm shift that is the coronavirus pandemic. As you know, Covid-19 substantially impacted the way we consumed products, with millions suddenly eschewing traditional retail outlets for online avenues.
The devil is in the data. Based on information provided by the U.S. Census Bureau, back in Q2 2020, e-commerce transactions represented almost 16% of total retail sales. While this metric has come down to 13.6% in Q1 2021, it’s still a dramatic leap from the year-ago comparison of 11.4%. Very likely, we can expect consumers to spend their dollars in the digital realm, which means you need digital marketing specialists to grab that cash.
Given this context, it’s possible that CREX stock could rise much higher over the long run. Since data is the new gold, those who don’t have it or can’t leverage it will be left out in the cold.
Nevertheless, CREX is flirting dangerously with becoming one of the literal penny stocks. Prospective buyers will want to keep their eye on revenue growth (or lack thereof). In 2020, top-line sales dropped by 45% and recent quarterly performances aren’t confidence inspiring.
Borqs Technologies (BRQS)
Approached from a broad-view basis, Borqs Technologies appears to be one of the most relevant tech-based penny stocks to buy. Billed as a “global leader in embedded software and products for the Internet of Things (IoT),” Borqs provides “customizable, differentiated and scalable Android-based smart-connected mobile devices and E2E [end-to-end] cloud-service solutions.”
Further, the IoT industry is already a massive multi-billion-dollar enterprise and will only continue to grow in scope and scale. According to a report from Fortune Business Insights, the global IoT market reached a market value of nearly $251 billion in 2019. And experts predict that by 2027, the sector will reach $1.46 trillion. Thus, BRQS is very well positioned among penny stocks for long-term growth.
Of course, when you’re dealing with speculative investments, there’s always a catch. For Borqs, the financial picture is lacking. Prospective buyers should know going into this trade that the company generated revenue less than $27 million in 2020, which was down a staggering 73% from the prior year’s tally.
Also, BRQS stock has been rangebound at approximately the 90-cent level for months, save for a one-off burst of momentum.
Tech Penny Stocks to Buy: eMagin Corporation (EMAN)
A leading manufacturer active-matrix organic LED micro-displays on silicon, eMagin Corporation has seen a dramatic increase in investor sentiment since the first-quarter doldrums of 2020, when the Covid-19 crisis first imposed a heavy impact. At the time, shares were only selling for less than a quarter, one of the literal penny stocks.
Nowadays, shares have jumped to just under $3. While there’s always a chance that you may end up holding the bag following a big burst from a speculative investment, it seems to me that EMAN stock is in the middle of charting a longer-term bullish pennant formation.
I want to be careful here — you don’t want to gamble any funds you can’t lose based on my interpretation of the chart. It’s very likely that other, more esteemed analysts will have a differing view. And in that case, I’d defer to the smarter individual.
Nevertheless, what makes eMagin fundamentally intriguing is its multi-tiered operational relevance. From consumer-level products to commercial/industrial use to medical applications, eMagin can fill critical equipment needs. As well, its military-application micro-displays should see higher demand based on concerning geopolitical rumblings.
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On the date of publication, Josh Enomoto 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.
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.