As the market continues to struggle there’s a real opportunity to pick up undervalued penny stocks.
Arguably a more stable market environment is expected next year to support smaller-cap volatile assets such as penny stocks. It was a horrendous year for equity investors marred by a hawkish monetary policy that led to stocks selling off at a remarkable pace.
However, these market conditions have created multiple undervalued penny stock opportunities for investors to place their bets on for a healthy upside ahead.
Amid the selloff this year, some of the leading names in the sector with solid underlying fundamentals are trading at beaten-down valuations.
Therefore, taking advantage of available opportunities while they last would be prudent. Nevertheless, it is imperative to avoid catching a falling knife and stay away from investing in recession-prone industries. Overall, 2023 promises an exciting time for investors looking for gains on penny stocks.
|ENIC||Enel Chile S.A.||$2.03|
Globalstar (NYSEAMERICAN:GSAT) is a relatively unknown satellite communication firm that made waves in the stock market in 2022.
Thanks to its partnership with tech giant Apple, GSAT stock has seen a healthy uptick in price in the latter half of the year, but it’s still one of the undervalued penny stocks to keep your eyes on.
Globalstar will offer robust satellite connectivity services for the iPhone 14 in partnership with Apple. The development is likely to significantly improve its operating results in 2023, with revenue and earnings figures expected to accelerate by 2026.
The announcement of the collaboration between the two firms resulted in a healthy bump in GSAT stock in September. However, the stock pulled back in the following months but is likely to take off again once the deal takes shape.
Wipro (NYSE:WIT) is one of the firms leading the Indian tech innovation, offering an impressive range of services in cloud computing, cybersecurity, digital transformation, artificial intelligence and robotics, data analytics and more.
As one of the biggest players in its field, Wipro has an enviable track record for helping its customers realize their IT objectives faster and cost-effectively. Their pioneering role has created a competitive landscape that will benefit generations, shaping India into a tech powerhouse ready to lead the world stage, making it one of the undervalued penny stocks with room to run.
Backed by a firmly established history and brand name, the performance of Wipro is alluring to many investors who seek exposure to India’s booming tech industry. Moreover, it boasts excellent profitability metrics, ranking among the cream of the crop.
Surge Components (SPRS)
Surge Components (OTCMKTS:SPRS) is known worldwide for producing high-quality capacitors and discrete semiconductors.
Headquartered in New York, Surge Components takes pride in working closely with industry leaders and clients to develop products geared specifically toward their needs.
SPRS is an excellent example of the best undervalued penny stocks for 2023. The brand holds strategic infrastructural relevance, primed to revolutionize how enterprises and service providers interact with their customers.
With the Biden administration pushing for increased investment in infrastructure and technology, the demand for Surge’s semiconductors could surge through 2023. Financially, one of Surge’s strong points centers on its all-around solid financials, backed by capital that highlights the company’s tremendous long-term growth prospects.
Kinross Gold (KGC)
Kinross Gold (NYSE:KGC) is another of the fantastic undervalued penny stocks, offering investors an incredible dividend yield.
The sale of assets in Russia and Ghana and the drop in gold prices have caused investors to doubt the stock. However, Kinross continues to prove the naysayers wrong with its rock-solid results.
In addition, the company has stated its plans for stable production up until 2025. Moreover, its all-in-sustaining costs are particularly attractive, which could, in turn, lead to positive cash flows in the upcoming years.
Kinross is in a very strong financial position due to its $2 billion liquidity buffer and impressive performance despite the depressed gold prices during the third quarter.
This liquidity buffer ensures dividend safety. Even more impressively, under a conservative scenario, Kinross’ operating cash flows are projected to be between $500 million and $600 million in 2023, which puts them in an even stronger position than before. Moreover, this added financial strength likely gives them access to more asset acquisitions.
Transocean (NYSE:RIG) is not getting its due credit, as it is poised to benefit from crucial industry tailwinds.
A closer look at the order backlog points to a robust outlook ahead. In a short span of two quarters, Transocean has already racked up an order backlog of $2 billion. Further buoying prospects is that incoming orders come with higher day rates, signaling better profitability margins for 2023 and beyond.
Transocean is in strong position to perform in the future, with tremendous opportunities on the horizon. Despite the economic downturn, Transocean holds twelve cold-stacked rigs, which offer incremental revenue and cash flows as market conditions improve.
In addition, those increased cash flows will enable Transocean to significantly reduce debt by $3 billion over the next few years. This puts Transocean in an advantageous position in an uncertain industry and gives them a greater advantage as we advance.
Nokia (NYSE:NOK) has successfully transformed its fortunes over the past few years, emerging as a leading player in the telecom sphere.
Its strategy of diversifying its product offerings across the business has effectively up new growth avenues for the Finnish giant.
Its network infrastructure and cloud divisions, in particular, have performed exceptionally well in recent quarters, showcasing the success of its strategic decision-making process. It’s safe to say that Nokia has been on quite a remarkable journey that promises to bear even greater fruits in the future.
Nokia’s impressive results can easily be traced to its commitment to innovation, especially its positioning in the 5G race. In recent quarters, it has had massive success in the enterprise sector, where streamlining operations has resulted in amazing year-on-year revenue growth of over 100%. The last eight quarters have seen Nokia outperforming analysts’ expectations, leaving observers confident that this trend will continue for the foreseeable future.
Enel Chile S.A. (ENIC)
Focusing on renewable energy sources such as hydroelectric, wind, and solar power, their efforts are reducing our reliance on non-renewable sources of electricity while protecting the environment.
Enel’s dedication to working with renewable energy sources has become the region’s top utilities company.
It’s been a difficult few months due to the dire consequences of the drought in Chile, but the firm’s third-quarter results provide plenty of reason to be optimistic about the future.
Hydrology conditions have shown improvement, and the gas price impact is beginning to drop, helping the firm return to prior profitability levels. If Enel manages to match its financial performance from 2019, investors looking for dividends can expect a yield that exceeds the 10% mark.
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