I don’t get my investment advice from Robert Kiyosaki, the famous (or infamous) author of the Rich Dad, Poor Dad series of books. However, I can understand his latest cause for concern regarding the supposed global asset bubble. Particularly, with property developer China Evergrande (OTCMKTS:EGRNF) shares joining the ranks of literal penny stocks, it may be time to start thinking about protecting your wealth.
Now, Kiyosaki has taken things to the extreme. Late last month, the author tweeted in part the following: “Real estate crashing with stock market. China’s Evergrande Group cannot pay. Valuation of properties fake. Will real estate crash spread to US? Yes. Great stock and real estate opportunities coming for smart investors. Disaster for foolish investors.” But this might be the opportunity to jump into penny stocks.
Yes, you read that correctly, I said penny stocks. Of course, you are perfectly right to question my judgment. As speculative ideas, these shares of distressed publicly traded companies are highly dangerous due to their volatility. Sure, you can make money in this sector but more than likely you will lose it. Given the lack of oversight, you risk exposing your funds to same shady businesses.
So, why bother talking about penny stocks? Despite their mountainous risks — please do your research on this topic — they do offer some possible benefits. Under the context of an asset bubble bursting, this speculative arena’s value comes in the form of its lack of correlation to benchmark indices. In other words, in good times or bad, these wild securities do their own thing.
However, doing their own thing doesn’t necessarily mean they’re going to do profitable things, let’s be clear about that. Nevertheless, if you fear an asset bubble is rising like Kiyosaki does, a small wager into these penny stocks might put your mind at ease.
- Pieris Pharmaceuticals (NASDAQ:PIRS)
- Longeveron (NASDAQ:LGVN)
- Rolls Royce (OTCMKTS:RYCEY)
- Castor Maritime (NASDAQ:CTRM)
- Artificial Intelligence Technology Solutions (OTCMKTS:AITX)
- Extreme Vehicle Battery Technologies (OTCMKTS:CRYBF)
- DMG Blockchain Solutions (OTCMKTS:DMGGF)
Before we head further, I must emphasize again that penny stocks are incredibly risky. Research indicates that market crashes correlate with higher rates of self-harm. Thus, consider this paragraph to be a “cooling off” period before you dive into these dangerous ideas.
Penny Stocks to Buy: Pieris Pharmaceuticals (PIRS)
Depending on your definition of penny stocks, Pieris Pharmaceuticals might not be an appropriate inclusion on this list. At a time of writing price of $4.51, it’s well above most of the popular speculative ideas. Despite this “disadvantage” if you want to call it that, Pieris has a very compelling backdrop if you can handle its potential volatility.
Unlike other pharmaceutical and biotechnology plays, Pieris has developed therapies based on its proprietary Anticalin proteins. According to an article published on the National Library of Medicine’s website, “Anticalins are a class of engineered ligand-binding proteins that are based on the lipocalin scaffold.” Further, the article goes onto state the following: “At present, anticalins offer three major mechanisms for therapeutic application: (i) as antidotes, by quickly removing toxic or otherwise irritating compounds from the human body; (ii) as antagonists, for example, by binding to cellular receptors and blocking them from interaction with their natural signalling molecules; (iii) as tissue-targeting vehicles, by addressing toxic molecules or enzymes to disease-related cell surface proteins.”
Even better, Pieris signed partnership agreements with major pharma companies, including AstraZeneca (NASDAQ:AZN), Seagen (NASDAQ:SGEN) and Roche (OTCMKTS:RHHBY). It’s risky but PIRS is one of the more credible penny stocks available.
Another name among penny stocks that don’t quite meet the literal definition of such, Longeveron nevertheless carries significant potential. Lately, the biotech firm has been a popular topic within various social media communities and it’s no surprise why.
A clinical-stage company, Longeveron focuses on cellular therapies for chronic diseases associated with aging and other life-threatening conditions. At the heart of this therapy is Lomecel-B, which are made from special living cells called medicinal signaling cells (MSCs). Per the company’s website, MSCs “are isolated from fresh bone marrow tissue that has been donated by adult donors aged 18 to 45. Because the cells come from another individual, Lomecel-B is referred to as an ‘allogeneic’ (donor-derived) product.”
What’s especially compelling about Lomecel-B is that it has “special characteristics that allows them to be transplanted from a donor to host without triggering a harmful immune response in the recipient.” Since fear of side effects keep millions of patients from taking medication, Longeveron can go a long way in shifting old perceptions about healthcare.
Penny Stocks to Buy: Rolls Royce (RYCEY)
Admittedly, I’m arriving to the investment narrative behind Rolls Royce a bit late to the game. Sure enough, as its iconic brand name would suggest, RYCEY is on the move. Still, with a price tag just shy of $2 as I write this, the famed auto manufacturer could still make a case for penny stocks to buy.
Once a symbol of having truly made it, Rolls Royce shares peaked around the tail end of December 2013 to the start of 2014. From there, the equity unit suffered from a series of sickening plunges, only to be sated with what turned out to be an extended head-fake before dropping into the abyss.
As you might imagine, the novel coronavirus pandemic did a number on Rolls Royce, including apparently forcing a restructuring plan that involved 9,000 layoffs. As well, the company recently sold off its Spanish division to help repair its finances.
Still, the company won a multi-billion-dollar contract with the U.S. Air Force, which is a major plus. In addition, I find it difficult to believe that an iconic brand like this will simply evaporate. Thus, it’s one of the credible penny stocks worth considering.
Castor Maritime (CTRM)
Over the trailing year, Castor Maritime has gone to the summit of Mt. Everest and back. At the back end of 2020, CTRM shares were priced in the low single-dollar range before steadily climbing higher. By the time we rung in the new year, the equity unit was barreling towards $2.
Over the next several weeks culminating toward its Feb. 11 peak of $17.30, Castor Maritime made several people rich (assuming they had the good sense of profiting those gains). But soon enough, with the Covid-19 vaccine rolling out across the U.S. and other parts of the world, investors regained their confidence. Penny stocks like CTRM therefore lost their luster.
However, enthusiasm could return again. As you know, the world is gripped with headlines regarding the global supply chain disruption. What’s more, we just don’t know when this economic crisis will end. The Financial Times recently ran a story stating that the dilemma is a disruption on top of disruption.
If so, the dynamic fundamentally supports shipping firms like Castor Maritime. At a time of writing price of $2.38, it might be worth a look with your speculation funds.
Penny Stocks to Buy: Artificial Intelligence Technology Solutions (AITX)
With the remaining penny stocks, I’m going to dedicate my time to companies that should have zero correlation to anything that’s going on with the rest of the economy. First up is Artificial Intelligence Technology Solutions, which is incredibly speculative, featuring an equity unit priced a hair above 3 cents at time of writing.
To show you how poor of a start this issue is, I tried to go to the company’s website, only to be rejected by some kind of technical problem. I can only go by its public profile, which states that the company “focuses on delivering AI driven technologies, paired with multi-use hardware and supported by custom software and cloud services, to intelligently automate and integrate security, concierge and operational tasks.”
On the surface, AI-powered solutions is a relevant industry. Whether AITX stock benefits specifically from the backdrop remains to be seen. That said, the equity unit has garnered serious attention on social media and it’s on the move.
Earlier this year, AITX closed at 26 cents. Therefore, if it reaches that point again, you’re talking about a more than 8X move. Not bad if you can get it.
Extreme Vehicle Battery Technologies (CRYBF)
If you like electric vehicles, energy storage and blockchain-based investments but didn’t know how best to allocate your funds across these relevant sectors, why not invest in a company that does all of these things? That’s the intriguing narrative behind Extreme Vehicle Battery Technologies, your one-stop shop for the most “in” sectors right now.
At the moment, most investors will arguably pay attention to Extreme Vehicle’s exposure to the blockchain industry. According to its website, the company will “provide customers with a transparent platform to validate their transactions. Users would even be able to charge their smart vehicles using cash or crypto.”
As well, CRYBF stock is tied to the energy storage segment, which features a “scalable, adaptable, and AI-integrated using real-time monitoring and repair.” What I’m personally interested in, though, is its Trilogy Vision, a two-seat, three-wheeled EV. Unlike other electric trikes, this one looks like it came straight out of a science-fiction movie.
It’s just too bad the company doesn’t expand on more details, just providing an artist’s illustration. And that makes me skeptical about CRYBF. Still, if you want high-risk, high-reward profiles in your penny stocks, this is it.
Penny Stocks to Buy: DMG Blockchain Solutions (DMGGF)
With cryptocurrencies going bonkers, it might be time to reexplore penny stocks that are tied to the underlying blockchain technology. Per its website, “DMG is a publicly traded and vertically integrated blockchain and cryptocurrency company that manages, operates, and develops end-to-end digital solutions to monetize the blockchain ecosystem.”
From what I can gather, the above is a fancy way of saying that it’s a crypto miner. For instance, the company provides this description of one of its top mining locations: “DMG’s Christina Lake Data Center is one of Canada’s largest single crypto mining facilities with a maximum power capacity of 80 Megawatts. With the implementation of the immersion cooling system, we will be able to achieve 30% improvements in miners’ hashrate, allowing for a significant reduction in the number of miners running for the same amount of hashing performance as extending the lifetime of assets.”
The question is, should you buy into the mining sector or stick with the cryptos themselves? Largely, it depends on your comfort level. Cryptos offer 24/7/365 trading, meaning you can dump out of your position at any time. However, penny stocks are associated with brokerage accounts, which offer greater administrative security and insurance if outside negative factors such as hacking occur.
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.