3 Penny Stocks Primed to Create a New Wave of Millionaires: June Edition

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  • Amid the possibility on interest rate cuts, focus on prospects like these three penny stocks for robust returns
  • Gold Royalty (GROY): With a business model focusing on capital provision rather than direct mining, GROY offers enhanced predictability with lower operational risks.
  • Bitfarms (BITF): Boasting a zero-debt balance sheet and a significant liquidity buffer, Bitfarms is well-positioned for aggressive expansion.
  • Lithium Americas (LAC): Home to the U.S.’s largest lithium deposit with a projected long-term annual EBITDA of $2 billion, Lithium Americas stands out in a rapidly growing market.
Penny Stocks - 3 Penny Stocks Primed to Create a New Wave of Millionaires: June Edition

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Penny stocks offer savvy investors a whole host of opportunities. Though there will always be purely speculative plays, some promising companies can become high-quality stocks in the future.

The major growth catalyst for penny stock investors is the potential for interest rate cuts later this year. Core inflation slowed down last month, but the Federal Reserve has elected to keep interest rates steady at 5.25% to 5.5%. Nevertheless, a rate cut is coming sooner than later, which makes it an excellent time to monitor penny stocks closely. It’s imperative to remain vigilant and avoid catching falling knives to make the most out of the positive investing sentiment.

Gold Royalty (GROY)

An image of a rising bar graph on top of gold bars, representing gold stocks
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Gold Royalty (NYSEMKT:GROY) is a precious metals play that is relatively attractive to its peers due to its unique business model. The company isn’t directly involved in mining activities, unlike traditional gold miners. Instead, it provides the capital needed for companies running mining operations while taking a cut of the sales generated. Its approach offers greater sales predictability while curbing the risks of gold exploration and production.

Gold prices are up 18% year-to-date (YTD), proving a boon for GROY stock. Moreover, it recently adjusted its 2024 guidance upward after acquiring a copper stream from the Vares silver project. It now expects to generate $13 million to $14 million in sales, compared to its previous guidance of $10 million in $11.2 million.

Furthermore, Rene Cartier from BMO Capital recently upgraded GROY stock to a ‘speculative outperform’, raising his price target to $25. The optimism stems from the firm’s successful diversification strategies and successful business combinations despite operating a largely non-producing portfolio.

Bitfarms (BITF)

Bitcoin and crypto mining farm. Big data center. High tech server computers at work. Bitfarms (BITF) mines crypto.
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Crypto bellwether Bitcoin (BTC-USD) has been on a monumental run in the past 12 months, driven by ETF approvals, geopolitical tensions and a weakening dollar. Given Bitcoin’s bullishness and the encouraging outlook ahead, it’s an ideal time to wager on Bitfarms (NASDAQ:BITF) stock.

Bitfarms stands out from the pack, with a zero-debt balance sheet and a hefty cash reserve of $124 million at the end of the first-quarter (Q1). This robust financial footing provides it with the impetus to expand its operations while targeting a mining capacity increase from 7.5 exahash per second (EH/s) to an ambitious 21 EH/s by year’s end. Such stellar growth will significantly boost both its top and bottom lines by a sizeable margin.

Moreover, Bitfarms recently grabbed headlines after rejecting a buy-out proposal from Riot Platforms (NASDAQ:RIOT). The decision points to the confidence BITF stock has in its underlying business, potentially creating a long-term opportunity for its investors.

Lithium Americas (LAC)

smartphone with logo of Canadian company Lithium Americas Corp on screen
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Lithium Americas (NYSE:LAC) is one of the most promising lithium mining companies and it stands out with its Thacker Pass project in Nevada. The project is home to the largest lithium deposit in the U.S., with a whopping after-tax net present value of $5.7 billion. That’s roughly nine times higher than LAC’s market cap of $644 million. LAC stock becomes even more attractive given the anticipated widening supply-demand gap in the lithium market.

Work is well underway at Thacker Pass, potentially becoming a massive profit generator for LAC. The asset offers tremendous long-term cash flow visibility, a 40-year mine life and a potential annual EBITDA of $2 billion. Moreover, the firm has substantial financial backing to continue advancing the project.

LAC received a $2.26 billion conditional loan from the U.S. Department of Energy earlier in the year. Additionally, Lithium Americas announced a $275 million equity offering in April, complemented by a $650 million investment from automotive titan General Motors (NYSE:GM) previously. Given these dynamics, LAC stock is an excellent bet at just 1.20 times book value, 42% behind the sector median.

On the date of publication, Muslim Farooque 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

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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