Penny stocks are known for their extreme price fluctuations. Due to low liquidity and low market capitalization, even small changes in demand can cause drastic price swings, making them highly unpredictable. However, This volatility could lead them to one day soaring 1,000% or more, as they are under $1 penny stocks.

Furthermore, many penny stock companies are small, unproven, and may have unviable business models. Many of these companies fail, resulting in a total loss for investors. Investors assume this extreme risk while investing in penny stocks, which allows for astronomical returns of 1,000% or more.

However, I feel some under $1 penny stocks could be worth considering if one clearly understands the risks of investing in these companies. Although it is rare, some of these companies have gone on to reach greatness, and I think that these under $1 penny stocks could have a decent shot at achieving that.

NamSys (NMYSF)

NamSys (OTCMKTS:NMYSF) provides integrated cash management software through a software-as-a-service model.

The company reported Q1 2024 revenue of 1.58 million CAD, a 6% increase from 1.5 million in the same period last year. Net income for the quarter rose by 12% to 425,584, up from 378,864 in Q1 2023.

NamSys plans to continue focusing on expanding its market reach and enhancing its software offerings. The company expects steady revenue growth driven by increased adoption of its software-as-a-service solutions in the cash management industry. Specific initiatives include developing new features for their existing software and expanding into new geographical markets.

Additionally, NamSys has been actively repurchasing shares, buying back 1,364,316 common shares as part of its Normal Course Issuer Bid.

The cash management niche is relatively small, and it’s also somewhat uncommon to find a company like NMYSF operating it, which means it could have explosive growth potential for investors.

Nikola (NKLA)

Nikola (NASDAQ:NKLA) focuses on electric vehicles and hydrogen fuel cells, aiming to change the transportation sector.

There has been some recent news for NKLA that suggests to me that it is on a prosperous path forward. Nikola has made significant progress in hydrogen fuel cell truck development, with orders for 140 hydrogen fuel cell trucks from 12 customers in the first quarter of 2023. The company has also commissioned four HYLA hydrogen mobile fuelers to support its refueling infrastructure. In the most recent quarter, NKLA said it “exceeded the high-end of [its] guidance range” via the delivery of forty fuel cell electric vehicles (FCEVs).

For 2024, Nikola aims to continue expanding its hydrogen fuel cell and battery-electric vehicle (BEV) offerings. The company aims to provide 14 hydrogen fueling solutions, including modular fuelers and partner stations, by the end of 2024.

Hydrogen vehicles could become a viable alternative to electric vehicles, giving NKLA immense potential.

Western Forest Products (WFSTF)

Western Forest Products (OTCMKTS:WFSTF) manufactures high-quality wood products and sustainably managed forests, offering a solid financial profile.

The company reported Q1 2024 revenue of 239.5 million CAD, surpassing the consensus estimate of 231 million. The company posted a net loss of 8 million for the quarter, resulting in a loss per share of 0.02 CAD, which matched analyst expectations. Adjusted EBITDA for the quarter was negative 4.2 million​.

The company operates seven sawmills, four remanufacturing facilities, and two glulam manufacturing facilities, with a lumber capacity exceeding 1 billion board feet. 

The future looks bright for WFSTF thanks to its tiny market capitalization and stable financials. Also, Western Forest Products is implementing further cost-saving measures and aims to enhance its production capabilities throughout the year, which I think will help it break even.

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.