Although relative few investors – let alone analysts hired by top research institutions – give much thought to low-volume speculative securities, the concept of top Wall Street penny stocks is not quite an oxymoron. Believe it or not, some market ideas are so compelling that they represent approved penny stock picks.
Now, let’s be clear about one thing. Whether we’re talking about leading penny stocks with potential or investment “advice” that you got from your local hotdog vendor, this sector presents extraordinary risks. Indeed, the segment is so treacherous that even with my warnings here, you’ll still see another warning at the bottom of this article. Please do not invest more than you can afford to lose.
Caveats aside, must-buy penny stocks naturally emit a siren song. From their (unlikely) possibility of delivering astounding, life-changing gains to the very remote possibility that you could be looking at a blue chip of the future, speculative ideas will always entice. So, if you’re going to gamble, you might as well do so with Wall Street’s penny stock recommendations.
Cumulus Media (CMLS)
Billed as an audio-first media company, Cumulus Media (NASDAQ:CMLS) focuses on delivering premium content to over a quarter of a billion people every month. Further, its public profile states that Cumulus represents the third-largest owner and operator of AM and FM radio stations in the U.S. Still, CMLS is very much a speculative entity, featuring a market capitalization of only a bit over $72 million.
What’s more, CMLS fell more than 33% since the beginning of the year. In the trailing one-year period, shares gave up 53% of equity value. Nevertheless, it’s one of the top Wall Street penny stocks, with analysts pointing to significant growth potential.
To be fair, Cumulus’ financials aren’t great. Suffering a debt-laden balance sheet, both its three-year revenue and EBITDA growth rate (on a per-share basis) slipped into negative territory. Nevertheless, analysts peg CMLS as a unanimous strong buy (among three experts). Further, the average price target lands at $8.67, implying over 97% upside. Thus, it’s one of the approved penny stock picks.
Information Services (III)
A leading global technology research and information technology advisory firm, Information Services Group (NASDAQ:III) focuses on helping its enterprise-level clients achieve operational excellence. Per its website, the company offers a powerful mix of advisory, digital transformation, and research capabilities. While it’s an exciting sector to be in, present economic woes have pressed III. In the trailing year, III gave up over 21% of its equity value.
Financially, Information Services offers a mixed profile. Bad news first, the company carries more debt than arguably most conservative investors would like to see. As well, it could use significant improvement in the long-term revenue department.
However, its three-year EBITDA growth rate comes in at 18.3%, above 64.72% of its peers. Also, III trades at only 10.55x forward earnings, which is incredibly cheap. It’s possible, then, that shares could be one of the leading penny stocks with potential. Lastly, analysts also peg III as a unanimous strong buy. Their average price target clocks in at $13.43, implying nearly 179% growth. Therefore, it’s one of Wall Street’s penny stock recommendations for massive returns.
Affimed (AFMD)
Appropriate only for extreme speculators, Affimed (NASDAQ:AFMD) is a biotechnology firm focused on pursuing the untapped potential of the innate immune system. This approach may give patients a more effective pathway to fighting cancer. According to its website, the company’s AFM13-202 monotherapy for the indication of peripheral T-cell lymphoma has just completed a Phase 2B clinical study.
While ranking among the top Wall Street penny stocks, Affimed largely relies on its scientific narrative. On a financial note, the company appears to be running on fumes. For example, its Altman Z-Score sits at 5.41 below zero, indicating severe distress and possible bankruptcy risk. Also, its long-term revenue and EBITDA growth rates have fallen into negative territory.
The one clear positive is its cash-to-debt ratio of 7.88x. However, it’s not particularly remarkable compared to the biotech industry. Nevertheless, AFMD may be one of the must-buy penny stocks. Specifically, analysts peg shares as a unanimous strong buy. As well, the price target stands at $5.25, implying over 930% upside potential.
Penny Stocks
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
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.
