Investors interested in renewable energy-related penny stocks often fit a certain profile. That is, they’re likely to be highly risk-tolerant, something that is essentially a necessity for these kinds of investments.
The allure of penny stocks is their greater volatility versus higher-priced, more well-established equities. The outsized returns they can provide at a moment’s notice can be very attractive. But that is also balanced by real downside. So, because the risks are greater, investors should be extra cautious in this category. As they say, you should only risk what you are willing to lose.
Still, investors in penny stocks seek quick gains while renewable energy investors are looking for growth derived from the prioritization of low carbon emissions. As ideas like carbon pricing gain more steam and the Oil Majors start to shift their decades-long strategic plans, it’s becoming more evident that renewable energy is reaching a critical mass. That means now is a great time to get onboard with the trends fueling the broader energy market.
For investors seeking to leverage current dynamics and hoping for rapid price appreciation, the following list of equities is a strong place to begin your search.
- Ocean Power Technologies (NYSEAMERICAN:OPTT)
- Solar Integrated Roofing (OTCMKTS:SIRC)
- Broadwind (NASDAQ:BWEN)
- SunHydrogen (OTCMKTS:HYSR)
- NexGen Energy (NYSEAMERICAN:NXE)
- Solar Alliance Energy (OTCMKTS:SAENF)
- Enerkon Solar International (OTCMKTS:ENKS)
Penny Stocks to Buy: Ocean Power Technologies (OPTT)
Based in New Jersy, Ocean Power Technologies is a company that manufactures what it refers to as PowerBuoys. These buoys have two purposes: energy production and communications.
More specifically, the buoy harnesses ocean waves to power the buoy and its comms payload. That power allows “real time data transfer” from the buoy itself. These powered buoys and communications systems are broadly applicable across diverse industries, including scientific research, oil and defense.
The good news here is that, on Sept. 17, OPTT stock shot up overnight. It increased by about 19%, closing at $2.28 at the end of the day. The bad news, however, is that investors are not entirely sure what catalyzed the movement itself.
The company released its earnings report on Sept. 13, but it wasn’t outstanding. At the same time, it wasn’t poor either. The company doesn’t do a tremendous amount of sales, registering only $272,000 in quarterly revenue. However, that was a 61% increase over the $169,000 it recorded in the prior-year quarter. The company also saw a net loss of $3.08 million in the quarter, marginally less than the $3.38 million loss it saw the same time last year.
That all said, there is still reason to be cautiously optimistic about OPTT stock’s future prospects. Recently, the company received a U.S. Department of Energy award to develop a next-generation wave energy technology. Further, this pick of the penny stocks is well capitalized. Total cash, cash equivalents and restricted cash was $78.3 million as of Jul. 31.
Solar Integrated Roofing (SIRC)
Solar Integrated Roofing is an inexpensively priced stock at well under $1. It has traded in that range since mid-March. Further, like many other penny stocks on this list, it trades in the often volatile over-the-counter market.
That said, this solar panel roofing installation company is arguably investment worthy at the moment. The company very recently announced preliminary unaudited record sales of $25 million for the three month period ending Aug. 31. Now, CEO David Massey believes growth will continue and perhaps even double:
“Looking ahead, we are continuing to focus on our corporate streamlining program to decrease costs and further realize cost synergies […] Given our record sales growth, we believe we can achieve profitability this fiscal year. Our results, in combination with our share buyback program, are increasing our capital markets momentum towards audit completion and filing an application to become listed on the OTC Market’s OTCQB(R) Venture Market in the near-term, with the goal of uplisting to the Nasdaq thereafter.”
If this company continues along its current trajectory and does ultimately list on the Nasdaq, expect SIRC stock to rise significantly. A Nasdaq listing is a vetting in itself. It would indicate much greater business strength.
Penny Stocks to Buy: Broadwind (BWEN)
Next up, Broadwind is arguably the most stable and reliable stock on this list. That assertion relies on the fact that it’s listed on the Nasdaq. Just as with Solar Integrated Roofing and its potential listing there, being on the exchange listing helps penny stocks prove they’re worthwhile. Plus, BWEN stock hovers right round the $3 threshold currently. As a general rule of thumb, the higher a stock’s price rises the less volatility it carries.
The other notable characteristic about Broadwind, though, is that it currently has analyst coverage, with three buy ratings and one hold rating. Those four analysts give the stock an average target price of $7.67. That implies upside of 161% using the Sept. 21 close price, so there’s plenty of money to be made here.
Broadwind is a fabricator of heavy componentry across multiple energy sectors. It touches on both renewables and non-renewables. More specifically, its renewables focus is aimed at wind power, as you might have guessed from the name.
According to the company, it was “one of the first producers of 100-meter wind turbine towers in the United States.” It produces solar arrays as well. Keep an eye on BWEN stock for further success.
Often, penny stocks are separated into a tiered system that’s divided based on price. SunHydrogen falls into tier 2, between 1 cent and 99 cents. It currently trades for around 5 cents per share but reached 30 cents back in early 2021.
This company is focused on splitting water into hydrogen and oxygen. The result is hydrogen as an energy source with oxygen left over as a clean byproduct of the process. SunHydrogen’s solution involves a photoelectrochemical process that uses the sun’s power to split apart water molecules into the aforementioned components.
HYSR is somewhat of a hybrid between a hydrogen stock and a solar stock. Its technology is far from the commercial stage. However, scientists and investors have long speculated that commercialization of the technology will be revolutionary. If SunHydrogen can successfully bring this kind of hydrogen production from solar energy to scale, HYSR stock could rapidly multiply in price.
That’s a big if, but one worth investing a small amount of capital toward.
Penny Stocks to Buy: NexGen Energy (NXE)
Next up on this list of penny stocks, NexGen Energy currently trades just at the threshold of the category. It recently passed over the $5 mark in the past few weeks, but it now trades in the high $4 range.
NXE provides the uranium that fuels semi-renewable nuclear power. True, uranium is not renewable, although it is abundant. However, the energy nuclear power plants produce is considered renewable; nuclear energy is clean and produces steam as a byproduct.
Another interesting thing about NXE stock, though, is that it possesses a lot of upside potential. Currently, it has a target stock price of $8.43. That implies 80% upside from the Sept. 21 close of $4.67.
Uranium prices are rising and recently hit an eight-year high, according to the Wall Street Journal. Nuclear power is enjoying a renaissance of sorts. Following the Fukushima disaster of 2011, this sector is seeing significant support for the first time in years.
Solar Alliance Energy (SAENF)
If you believe the sole analyst with current coverage of Solar Alliance Energy, then SAENF stock is poised for explosive growth. That analyst has given the company a target stock price of $1.15 per share. The stock currently trades at 16 cents.
Solar Alliance is a residential and commercial solar power company that serves over 10,000 customers in the southeastern United States. The company’s footprint spans Tennessee, Kentucky, North Carolina and South Carolina.
This name experienced rapid growth on a revenue basis between 2019 and 2020. The $2.8 million it recorded in 2020 represented a 65% improvement over 2019 revenues.
Additionally, solar energy is growing. But the company also stands to benefit from a demographic shift underway in the States. That is, people are increasingly moving into areas like the southeast U.S., where Solar Alliance operates.
When Solar Alliance reported earnings for the first quarter of 2021, revenues were down about 7% on a year-over-year (YOY) basis. But that could easily be attributed to the pandemic. No doubt, this pick of the penny stocks is certainly high-risk. Still, that single analyst target price will likely serve it well.
Penny Stocks to Buy: Enerkon Solar International (ENKS)
Last up on this list of penny stocks, Enerkon Solar International is at the bottom of this list for good reason: the stock is highly, highly speculative. That’s because, while the company lists a number of high-value, complex and seemingly successful projects, there are some red flags.
For one, its website is spotty in places and welcomes visitors with dummy text. Further, the Yahoo! Finance conversation board for ENKS stock is split 50-50. A good portion of the anecdotes there state that they made money from the stock, but there’s an equal number of comments warning investors to stay away.
Still, Enerkon spiked above $2 back in early 2021, so it may be worth speculating on. Today, it trades at 7 cents per share.
If the company is legitimate, then it does have a fair bit of interest in the renewable space, with several projects such as a hydrogen electrolysis endeavor. If it isn’t, it serves as a strong cautionary tale in the volatile world of penny stocks. That said, it could make a lot of money for risk-tolerant investors if it ever retests those former highs.
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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.