Robinhood is making waves these days on account of its blockbuster IPO. And although the company has completely revolutionized how we trade, skepticism is still rife. The application is synonymous with millennial traders that tend to go with their gut. That can lead to some interesting stock picks. Nonetheless, no one can discount the impact Reddit users using Robinhood have made in recent months. In fact, several interesting penny stocks are gathering a lot of steam on the platform.
Overall, a penny stock refers to a small company’s stock that typically trades for less than $5 per share. Penny stocks are volatile and can generate catastrophic losses. But it’s important to realize Ford Motor (NYSE:F), Apple (NASDAQ:AAPL) and Monster Beverage (NASDAQ:MNST) were once penny stocks. And because of this, it’s crucial to stay up to date regarding the latest trends in the niche. You never know when you could miss out on a hidden gem.
That said, this list will provide you with five very popular names on the Robinhood app that happen to be penny stocks with solid stories behind them.
- Uranium Energy (NYSEAMERICAN:UEC)
- Seanergy Maritime Holdings Corp. (NASDAQ:SHIP)
- Borqs Technologies (NASDAQ:BRQS)
- NovaBay Pharmaceuticals (NYSEAMERICAN:NBY)
- ElectraMeccanica Vehicles (NASDAQ:SOLO)
Now, let’s dive in and take a closer look at each one.
Penny Stocks to Buy: Uranium Energy (UEC)
Uranium Energy is a U.S.-based uranium mining and exploration company providing exposure to uranium projects in the United States, Canada, and Paraguay. It was initially incorporated in 2003 under the name Carlin Gold operating as a precious metal explorer. It then evolved into a uranium explorer and then into a uranium miner. Since then, 2015, it has returned to being a uranium explorer as commodity price has been too low to warrant the mining costs.
The market for nuclear fuel has been heating up as governments see a role for nuclear power in their clean energy efforts. President Joe Biden has shared a plan to invest in restoring and reclaiming uranium mines. China intends to generate one-third of its uranium domestically, obtain one-third through foreign equity in mines and joint ventures overseas, and buy one-third on the open market. Due to these policies, many analysts believe uranium is all set for a multi-year bull market.
Collectively, Uranium Energy is highly dependent upon the commodity price. And now that commodity prices are on their way up, UEC stock becomes an interesting speculative play on the uranium price. As developed and emerging markets ramp up demand for this energy source, expect UEC stock to shoot upward.
Seanergy Maritime Holdings Corp. (SHIP)
Seanergy Maritime is an international shipping company focusing on dry bulk cargo shipping. It has a capsize fleet of 16 vessels with an average age of 11.8 years and an aggregate cargo-carrying capacity of approximately 2,823,878 tons deadweight (DWT).
The company’s fortunes mirrored that of its industry last year. However, it has made a nice recovery in 2021. Seanergy ended up with gross revenues of $28.9 million in the second quarter, a 209% year-over-year (YOY) increase. Also, net income came in at $2 million versus a net loss of $11.3 million last year, and adjusted EBITDA improved to $11.3 million, from negative $1.8 million in the second quarter of 2020.
For the first six months of the year, gross revenues were $50 million, a 116% jump over the year-ago period; adjusted EBITDA was $19.2 million, compared to a negative adjusted EBITDA of $0.5 million in the same period of 2020. At the end of the latest quarter, Seanergy Maritime had $56.4 million in cash at hand, which will likely be used for fleet expansion — Seanergy is looking to expand its fleet and pare down debt in 2021 and beyond.
Considering its history, a majority of the cash will come from issuing equity. But with customers including major miners like Rio Tinto (NYSE:RIO), Vale (NYSE:VALE), and BHP Billton, among others. And a rapidly recovering global economy, investors will not be too concerned with equity dilution at this stage.
Penny Stocks to Buy: Borqs Technologies (BRQS)
Borqs Technologies is an Internet of Things (IoT) company working on making smart-enabled products that connect to Android mobile devices. Although the company operates in an interesting niche, BRQS stock has gotten a lot of attention among penny stocks because of tremendous Reddit interest.
Due to its operating model, the company is generating interest from the non-Reddit crowd as well. According to one research firm, the IoT industry is valued at $761.4 billion in 2020 and is forecasted to reach $1386.06 billion by 2026. Being active in the space, therefore, gives a lot of brownie points to Borqs.
But there is a caveat; as InvestorPlace writer Josh Enomoto pointed out, these are still early days for the high-tech company. In 2020, the company’s revenues fell 73% YOY. Apart from the Reddit-induced surge seen on Robinhood, there has also been little in the way of momentum. So, your best bet is to take a long-term view when investing in this one.
NovaBay Pharmaceuticals (NBY)
NovaBay Pharmaceuticals develops and sells anti-infective products that don’t utilize antibiotics, including topical products.
The company was in the spotlight recently for its involvement in fighting against Covid-19. Its proprietary hypochlorous acid solution Avenova received approval from the U.S. Food and Drug Administration (FDA) for its ability to kill the virus. However, that is only one part of the equation.
Avenova is an antibacterial lid and lashes solution to treat numerous chronic eye problems. And with 30 million Americans suffering from blepharitis and meibomian gland dysfunction — among other chronic eye disorders — the company has a sizeable addressable market it can cater to.
Penny Stocks to Buy: ElectraMeccanica Vehicles (SOLO)
Founded in 2015, Canadian automaker Electrameccanica Vehicles manufactures a purpose-built, single-seat three-wheeled electric vehicle (EV) called the SOLO. Although a novel concept, the novel coronavirus pandemic has made the design interesting and worth exploring.
The hoopla surrounding this one has much to do with the quest to find the next Tesla (NASDAQ:TSLA). Investors are betting up nascent, and at times very risky EV plays with the hopes of striking gold. As is the case with most companies in the EV space, SOLO is massively overvalued. Nevertheless, vehicle pre-orders exceed 64,000 units, representing $2.4 billion in potential sales.
It retails for $18,500, with a 100-mile range, and can reach speeds of up to 80 miles per hour. A Tesla Model 3, in comparison, is changing hands for over $30,000. The only negative over here is that it is not treated as an electric car for federal tax purposes despite functioning as a car. So, if you buy one, then you cannot take advantage of up to $7,500 in credit, usually reserved for a conventional four-wheeled EV.
All things considered, it is not a bad investment. Shares are down 18.8% in the month.
On the date of publication, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
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