Although extremely risky, penny stocks can provide tactical value to a portfolio. The risk of losing it all is very real. Also, one should be willing to cut one’s losses if necessary. Careful company selection, heavy active management, and a good dose of luck could triple one’s initial investment.

Let’s explore three companies that have met certain quality benchmarks and have some promising developments in store for the future. These companies span a broad range of economic sectors. So investors should be able to find something to consider regardless of their investment strategy.

So here are the best penny stocks to buy in December that should be snapped up quickly.

Brandywine Realty (BDN)

Brandywine Realty (NYSE:BDN) is an office-focused Real Estate Investment Trust (REIT). The predicted fall in interest rates next year should be a boon for companies like BDN. But, this brand should see a particular lift in its valuation.

The reason I’m bullish on BDN is that it’s likely undervalued. Last quarter, the company reported total revenue of nearly $126 million. That represents a slight increase from $124 million in the same quarter the previous year. However, it posted a net loss of $12.9 million, or $0.08 per share. This stands in stark contrast to a profit of $4.5 million in Q2 of 2022.

However, the losses are accounting (paper) losses and don’t accurately paint the full picture. The company’s free cash flow has been positive in the last twelve months at $107.28 million. Also, BDN’s dividend yield is substantial at 11.43%.

As the interest rates lower, long-term bonds may also become less appealing. Therefore, high-yield investments like BDN could become comparatively more attractive.

Rover Group (ROVR)

Rover Group (NASDAQ:ROVR) operates an online marketplace for pet care services. ROVR might be a better pick if investors want to park their cash in a somewhat less speculative company.

ROVR is less risky than others because of the substantial financial reports it released over the last few quarters.

For instance, it reported a 30% year-over-year (YOY) increase in revenue in Q3 of 2023. ROVR transitioned from a net loss in Q3 of 2022 to a net income of $10.5 million in Q3 of 2023. Along with these results, it strengthened its guidance for its adjusted EBITDA. And it said it would purchase $100 million in shares from the market.

Another piece of evidence investors can lean on is that ROVR carries that conviction from Wall Street. Seven analysts rated ROVR a buy, with two going as far as giving it a strong buy recommendation. Surely, part of the analysis that would have on its margins, notably its gross margin. That stands at 77.91% over the last twelve months. A gross margin this high for its industry is exceptional.

By maintaining this margin and bringing its other margins to a similar standard, it could be a worthy penny stock.

Erasca (ERAS)

Erasca (NASDAQ:ERAS) is a clinical-stage precision oncology company. So, it’s a risky biotech play that’s working on treatments for RAS and MAPK pathway-driven cancers.

Notably, its insider ownership is substantial at around 30%. This includes its CEO and director recently buying a million shares in October. As an investor in an all-or-nothing industry like biotech, high insider ownership may help curb investors’ concerns, at least somewhat.

Also, the company has twelve programs in its development program, including some that the FDA has granted fast-track designation. Additionally, ERAS is sitting on a war chest of cash, enough to last 18 months at its current cash burn rate.

Like other companies on this list, Wall Street is bullish on Erasca stock’s trajectory for the next 12 months. It carries an analyst consensus of strong buy, its consensus price target of $10 implies a 407.61% upside from its current pricing level. ERAS could be considered one of those penny stocks to buy due to these factors.

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Read More: Penny Stocks — How to Profit Without Getting Scammed 

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.