Lately, we’ve been talking about penny stocks to buy and this exciting space always comes with a warning. I do mean always. When you’re engaging ultra-small capitalization plays, you’re absorbing huge risks. I realize that this arena is marketed as an anything-can-happen ecosystem. You should note, though, that “anything can happen” also has a negative connotation.
So, why do people always target penny stocks to buy? In the capital markets, you are typically presented with a spectrum: potentiality on one end and predictability on the other. The enterprises with the highest magnitude of predictability would be something like your blue-chip, dividend-paying industry stalwart. They’re very predictable but they lack robust upside potentiality.
On the other hand, penny stocks enjoy extremely high potentiality but at the expense of predictability. Sure, that $100 million market cap stock can potentially jump 10X, 20X, who-the-heck-knows-X, right? But they can also lose 98%, 99%, even 100%.
You’ve got to be mature enough to realize that the possibilities with speculative ideas are endless, for good and bad. If you can handle the heat, maybe – just maybe – these penny stocks to buy could be interesting.
Seanergy Maritime (SHIP)
A shipping company, Seanergy Maritime (NASDAQ:SHIP) provides seaborne transportation of dry bulk commodities worldwide. Per its public profile, the enterprise operates a fleet of 16 Capesize dry bulk vessels. It also owns one Newcastlemax dry bulk vessel. It doesn’t seem like it belongs to one of the penny stocks to buy. However, SHIP only carries a market cap of $222 million.
Still, analysts really dig SHIP stock, rating it a unanimous strong buy. Part of the reason is that it appears to offer reasonable value. Granted, the security trades at a trailing-year revenue multiple of 1.54X. That’s a bit of on the warmer side of the underlying industry. However, it’s also important to understand that experts believe in significant growth for the shipping firm.
For fiscal 2024, analysts project that Seanergy will post sales of $157.95 million. If so, that would represent a 43.3% lift from last year’s print of $110.23 million. Also, the most optimistic target calls for sales of $185.9 million.
If that wasn’t enough, the company also offers a forward dividend yield of just under 2.7%. I call that a pretty decent deal, especially from a penny stock.
Lifetime Brands (LCUT)
Based in Garden City, New York, Lifetime Brands (NASDAQ:LCUT) falls under the consumer discretionary sector, specifically furnishings, fixtures and appliances. Per its corporate profile, Lifetime designs, sources and sells branded kitchenware, tableware and other home-use products worldwide. The brands that it owns or licenses include popular labels such as Farberware, Mikasa, Taylor and KitchenAid.
Fundamentally, it’s possible that with the surge in home buying during the early years of the pandemic, Lifetime could see some residual benefits. Folks bought the homes, now they need to furnish it. Granted, that hypothesis may come under challenge due to the difficulties of the present consumer economy. Still, analysts rate shares a consensus moderate buy with a $12.75 average price target.
What’s interesting here is the forecasted business expansion. For fiscal 2024, covering experts believe that Lifetime’s earnings per share may rise 42.3% to reach 74 cents. On the top line, sales may rise 2.7% to hit $$705.14 million. Similar growth projections are on hand for both the top and bottom lines for fiscal 2025.
Also, it’s worth pointing out that Lifetime offers a forward dividend yield of 1.82%. Again, I think that’s great value when you’re talking about penny stocks to buy.
FAT Brands (FAT)
If you want to really ramp up your risk-reward profile for penny stocks to buy, let’s talk FAT Brands (NASDAQ:FAT). You know this company for its multi-brand restaurant operation, specifically the flagship Fatburger. Per its website, the label bills itself as “The Last Great Hamburger Stand” (which is trademarked, by the way).
In an age where everyone is talking about sustainable calories and other holistic initiatives, it’s great to find that “gluttonous” options still exist. In an automotive sense, carmakers are developing zero-emission or low-emission hybrid electric vehicles. Sometimes, you just want a big old V8 engine to rumble down the dragstrip. That’s Fat Brands in the culinary world.
Analysts dig the idea, rating FAT stock a consensus moderate buy. Also, the average price target stands at $20, implying almost 281% upside potential. Presently, shares trade at only 0.17X trailing-year sales, which is well below the industry median. Even better, experts forecast sales to rise 31.8% in fiscal 2024 to hit $633.41 million.
If that wasn’t enough to pique your curiosity, check this out: Fat Brands also offers a forward dividend yield of 10.67%. That’s risky because we’re talking about penny stocks to buy. But that’s also seemingly good value.
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.
