- Consider these seven names, a mix of growth and value plays, some of the best penny stocks to buy in July 2022.
- Clovis Oncology (CLVS): Biotech firm that just released promising clinical trial data.
- Curiositystream (CURI): Fledgling streaming firm that may be the best value among penny stocks in the space.
- Douglas Elliman (DOUG): New York-based real estate broker; housing market uncertainty has pushed it to a low valuation.
- Gevo (GEVO): Renewable energy company that investors are shunning, but it continues to make progress growing its business.
- Gran Tierra Energy (GTE): It’s possible investors have overreacted to political news with shares in this energy company.
- National CineMedia (NCMI): This may be a better “return to the movies” play than AMC Entertainment (AMC).
- Nokia (NOK): Less of a moonshot than the other stocks mentioned, yet could deliver solid returns if it completes its turnaround.
With the vast majority of them trading well below their respective 52-week highs, you may be curious which of these are the penny stocks to buy right now. As the stock market continues to absorb rising interest rates, persistent high inflation and a possible recession, most penny stocks could continue to struggle in the months ahead.
Yet among the scores of names in the penny stock category that trade on major exchanges (1,805, according to Finviz.com), there are a few that qualify as great opportunities. Some of these are growth plays. Others fit better in the value stocks category. There are also names out there with high exposure to some of the few areas of the market thriving right now.
Low-priced stocks offer high-risk, but potentially high returns. That’s not to say all of these seven penny stocks to buy will deliver. However, each one has the potential to do so. In some cases, in the short-term. In other cases, in the long-term.
|GTE||Gran Tierra Energy||$1.21|
Clovis Oncology (CLVS)
Biotech firm Clovis Oncology (NASDAQ:CLVS) has zoomed higher since mid-June. The reason? As my InvestorPlace colleague Chris McDonald discussed June 21, this big move was due to promising results from clinical trials for one of its key therapies.
Up by triple-digits in the past month, at first you may think you’ve missed the boat with CLVS stock. However, there may be more upside for this speculative stock. Further news regarding its key therapy (tumor treatment FAP-2286) send this penny stock to even higher prices.
Also, rumors are circulating that Clovis is a takeover target. French pharma giant Sanofi (NASDAQ:SNY) may be interested in buying it. It’s rarely wise to buy a stock on takeover rumors alone, but this is another catalyst worth noting about this stock. If you’re active in biotech stocks, you may want to take a closer look.
Much like how big-name streaming stocks have tanked this year, so too have streaming penny stocks. For example, Cinedigm (NASDAQ:CIDM) and Genius Entertainment (NASDAQ:GNUS). Yet among stocks in this category, Curiositystream (NASDAQ:CURI) may be the best choice.
Why? For one, you can argue that it’s undervalued. It trades for just 67% of its book value. Now, there is a caveat. This fledgling documentary video streaming service currently operates in the red. It’s sitting on a heavy cash position ($82.7 million), yet could burn through much of it in the next year.
Then again, maybe not. If it continues to grow its subscription base, it may be able to narrow these losses. Given the potential for cost-cutting synergies, a strategic acquirer could end up buying it. From a risk/return standpoint, it may be worth it to roll the dice on CURI stock.
Douglas Elliman (DOUG)
Unless you live in the New York metro area, Douglas Elliman (NYSE:DOUG) may not be a familiar name. This company is a large real estate broker, with operations primarily in the tri-state area.
Spun off from tobacco company Vector Group (NYSE:VGR) late last year, DOUG stock has collapsed since the spinoff. At around $5 per share, admittedly it’s only teetering on the penny stock edge, yet it could fall back there in the near term. The housing market slowdown is creating high uncertainty over its future results.
For investors bullish on housing, this may be one of the best under-the-radar ways to play it. Douglas Elliman has become heavily discounted. At current prices, it trades for just 4.5x trailing twelve month (TTM) earnings. If the cooldown in housing proves to be less severe, better than expected results could send it back to past price levels.
Last month, I discussed how renewable energy company Gevo (NASDAQ:GEVO) was one of the few penny stocks with analyst buy ratings. After tumbling last year, and so far this year, a lack of renewed enthusiasm for “green wave” plays is now keeping it at depressed prices.
But while investors may be paying it little mind, this early stage producer of renewable natural gas and sustainable aviation fuel continues to make progress. For example, this month alone, it has entered two sustainable aviation fuel deals. Although it may take years before all of its deals translate into high revenue (or earnings), it’s promising for GEVO stock that the company continues to move in the right direction.
Analysts at Citigroup believe it may be less than two years away from becoming cash flow positive. Ahead of a rebound down the road, you may want to buy it today.
Gran Tierra Energy (GTE)
With oil at over $100 per barrel, you may be interested in what are the best penny stocks to buy in the oil patch. While there are many small-cap oil stocks out there, Gran Tierra Energy (NYSEAMERICAN:GTE) may be one of the first names you should consider.
When writing about GTE stock last month, InvestorPlace’s Stavros Georgiadis pointed out its low valuation. At the time, it was trading for just 7.6x earnings. Now, this oil exploration and production (E&P) company, based in Canada with operations in Latin America, is even cheaper. It trades today for 4.3x earnings.
Granted, it makes sense why it has become cheaper in recent weeks. Colombia’s election of Gustavo Petro, is a potential risk for the company’s operations there. However, as Columbia’s congress could quash some of the far-left energy policies Petro wants to implement, It’s possible investors have overreacted to this development.
National CineMedia (NCMI)
If you’re looking for a way to play the movie theater recovery, don’t buy AMC Entertainment (NYSE:AMC) stock. Still trading for more than its underlying value, a potential recovery is more than priced-in. That may not be the case though with cinema advertising firm National CineMedia (NASDAQ:NCMI).
Even as it’s still far from reaching pre-pandemic levels of revenue, it could make more progress getting there in 2023. According to analyst estimates, it could also swing back to profitability next year. If results meet/beat estimates (ranging from 11 cents per share to 24 cents per share), NCMI stock (trading for around $1 per share today) could skyrocket.
Returning to profitability will also enable it to keep paying its current high dividend (11.21% forward yield). While it’s a risky situation, as it offers a clearer path to upside than AMC, make NCMI your “return to the movies” play.
Nokia (NYSE:NOK) is another name at the upper band of the penny stocks category. It’s also, in contrast to the six penny stocks listed above, a large, established enterprise. With this, shares in the Finland-based telecom equipment company may not have as much “moonshot” potential.
Yet NOK stock could deliver solid returns in the coming years, thanks to the 5G rollout. Demand for new equipment could help boost its top-line. Coupled with CEO Pekka Lundmark’s turnaround efforts, this may pave the way for higher earnings in the years ahead.
Right now, it trades for only 10.7x estimated 2022 earnings. Investors continue to have a lukewarm view of the company, which for years has had growth issues. Completing its turnaround could also have a positive impact on Nokia’s valuation. A modest level of multiple expansion could mean a big jump for shares.
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On the date of publication, Thomas Niel 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.