Investing in penny stocks poses significant risks, as cautioned by the Securities & Exchange Commission. Penny stocks can have low volume, trade infrequently and be challenging to sell, potentially leading to a complete investment loss. Accordingly, those looking to hit the penny stock jackpot may want to ensure proper position sizing and risk management while holding these positions.
Consider investing spare change in penny stocks for potential high returns, but be cautious. These stocks, valued under $1, offer speculative opportunities. However, invest only what you can afford to lose, as they carry significant risk. Exclude stocks with excessive dilution or unsustainable losses, and buy these three penny stocks instead.
Surge Battery Metals (NILIF)
Surge Battery Metals (OTCMKTS:NILIF) is a top under-the-radar lithium exploration and development company. The firm recently revealed its first mineral resource estimate from 2021-2023, highlighting significant lithium reserves, particularly in the U.S. The company plans to optimize processing with experts and expand exploration efforts. Given the growing demand for lithium, this U.S.-based discovery offers unique growth potential.
The company also finalized an agreement with the Salmon River Cattlemen’s Association (SRCA) for exploration activities. Surge, holding 25% of sub-surface mineral rights, plans drilling on SRCA’s private ground and its own claims with M3 Metals Corp. Drilling commenced by May 2024 to explore lithium mineralization extensions. Despite risks, NILIF stock offers potential for long-term growth in lithium mining.
The company collaborated with M3 Engineering for a Preliminary Economic Assessment on its Nevada North Lithium Project, finalized by 2024. The evaluation aimed to validate the project’s potential for high-grade lithium extraction, crucial for electric vehicle batteries, with input from seasoned firms.
EVgo (EVGO)
As one of the major players in fast-charging network for EVs, EVgo (NASDAQ:EVGO) is one penny stock not to miss. Recently, the company revealed a spike of over 1 million registered customer accounts nationwide. This reflected a 400% increase since 2020. The company anticipates accommodating more drivers with its expanding network across the U.S.
EV adoption and increased demand for public charging are evident in EVgo’s momentum. In Q1 2024, network utilization hit 19%, nearly tripling year-over-year gigawatt-hour throughput. EVgo doubled registered accounts in under two years, introducing features like Autocharge+ to optimize customer experience. CEO Badar Khan is enthusiastic about EVgo’s capacity to serve over one million drivers and anticipates continued growth.
Cantor Fitzgerald’s analyst, Andres Sheppard, upgraded EVgo Inc. from Neutral to Overweight, with a lowered price target of $4 from $5. In Q1 FY24, EVGO reported a 118.2% surge in sales to $55.16 million, surpassing estimates. EPS of $(0.09) also beat expectations.
Tilray (TLRY)
In April, cannabis company Tilray (NASDAQ:TLRY) reported an 11% increase in their prospects for marijuana rescheduling. Mitchell Osak from Quanta Consulting highlighted the benefits of Tilray’s ATM financing strategy for funding global ambitions.
Tilray’s equity distribution agreement with TD Securities and Jefferies allows them to sell its common stock at market prices. While potentially annoying to investors due to dilution, the success of the financing hinges on proceeds and investment returns. Osak suggests Tilray could seize opportunities in the U.S., Canada and EU cannabis markets, as well as the delta-8 beverage sector.
The company has emerged as a strong contender in the cannabis market, leveraging its craft beer portfolio and distribution networks. Despite ranking seventh in revenue, its strategic acquisitions and established networks position it for growth, especially in THC-infused beverages. Tilray continues to highlight its readiness for potential market shifts toward medical cannabis in the U.S.
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, Chris MacDonald did not hold (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.
