Cryptocurrencies are currently seen by many as the best way to get 1,000% returns or even 10,000%. But quite often in investing, it pays to go “against the crowd.” One good way to do that now is by buying tech penny stocks.
I’m not the only one who believes that being smart contrarian is a very good way to generate outstanding profits; I’ve heard many other commentators say that usually those who go against the grain and are proven to be correct make a great deal of money. And I’ve experienced that phenomenon multiple times in my own investing career, particularly in the last two or three years.
Conversely, I’ve heard many experienced investors warn that “crowded trades” i.e. popular investments, often end in disaster. So with cryptocurrencies such as Shiba Inu (SHIB-USD) and Bitcoin (BTC-USD) becoming all the rage, risk-tolerant investors looking for “home runs” should consider avoiding or at least cutting back on cryptos and buying tech penny stocks.
As another InvestorPlace columnist, Faizan Farooque, correctly noted recently, “Not every penny stock is a scam or a get-rich-quick scheme. Several of them have outstanding business models and solid growth prospects.”
What’s more, like all tech names, tech penny stocks can potentially soar if their underlying companies’ products are widely adopted. The key, of course, is correctly identifying companies whose products will proliferate in the future.
I believe that Zinc8 Energy Solutions (OTCMKTS:ZAIRF), ReWalk Robotics, (NASDAQ:RWLK), and eMagin (NYSEAMERICAN:EMAN) are all in that category, making them very good penny tech stocks to buy. Let’s have a look.
Tech Penny Stocks: Zinc8 Energy (ZAIRF)
As I reported in a previous column, “Zinc8 developed ‘zinc-air regenerative fuel cell systems’ to store electricity.” The amount of power stored by the company’s systems can be increased without buying more fuel cells; Zinc8’s customers can raise their power capacity simply with a larger fuel tank, more “recharged zinc fuel,” and additional electricity.
In April, Zinc8 announced that one of the leading cloud providers “would test (the company’s) storage system” to determine if it can be utilized as a backup power source. The test is slated to be completed in March 2022, so a huge, positive catalyst could be coming up for ZAIRF stock in around four months.
Encouragingly, Zinc8 recently reported that it had moved its engineers to a new plant in British Columbia, Canada and that it was building “multiple test zinc-air energy storage systems” there.
I believe that the stock’s market capitalization of about $35 million far undervalues the company’s potential, given the high interest among tech and industrial companies, as well as governments, in clean, efficient electricity storage systems and the successes that the company has had already.
ReWalk Robotics (RWALK)
The company has developed a “robotic exoskeleton,” known as ReWalk, that allows people “with spinal cord injury (SCI) to stand upright, walk, turn, and climb and descend stairs.* Importantly, the company reported on Nov. 5 that the device had obtained “breakthrough status” by the FDA.
The agency applies that designation to treatments that it believes have a good chance to improve the standard of care for a high number of patients. With the designation, treatments can more quickly win approval from the agency.
ReWalk has also developed ReStore, ” a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke. ” That product was approved by the FDA in 2019, ReWalk reported.
According to the company, it is the first device that enables those who have had strokes to both use their ankles to move their toes towards their shins and utilize their ankle to point their feet “down and away from the leg.”
ReWalk has reported unimpressive revenues so far. But its ReWalk product has not yet been approved, and, as of August, 10 Veterans Administration sites were in the process of scheduling tests of ReStore.
In Germany, insurers that have a total of 25 million clients have agreed to cover ReWalk, while nearly every German worker who has “work related injuries” is eligible to receive the device.
Given the company’s tremendous opportunities and its current market capitalization of just over $100 million, shares of RWLK stock are tremendously undervalued.
Tech Penny Stocks: eMagin Corporation
OLED developer eMagin makes “microdisplays for high-resolution, AR/VR and other near-eye imaging products.” On Nov. 1, it announced that it had developed ” the world’s brightest high-resolution, full-color OLED microdisplay.”
Moreover, the company’s CEO, Andrew Sculley disclosed that it was “working with a tier-one consumer company to develop this technology, including ways of manufacturing it at commercial scale.”
According to DSCC, a research firm that specializes in the display market, eMagin’s new, improved microdisplay should interest “consumer, industrial, medical and military customers for the next generation of AR/VR headsets and devices.” Given the increasing popularity of AR/VR systems, that sounds like a very large addressable market for the company.
Moreover, providing some validation for eMagin’s technology, the company recently put the finishing touches on a $33.6 million deal with the Pentagon. Under the agreement, eMagin will provide the military with “high-resolution, high-brightness OLED microdisplays.”
EMAN stock is changing hands for 5.5 times analysts’ average 2022 revenue estimate for the company. Given the important competitive advantage of the company’s microdisplays and the rapid growth and huge potential of the AR/VR market, I think that the shares are meaningfully undervalued at this point.
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Read More: Penny Stocks — How to Profit Without Gettting Scammed
On the date of publication, Larry Ramer held a long position in ZAIRF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and MGM. You can reach him on StockTwits at @larryramer.