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Despite best efforts to dissuade investors from seeking extremely speculative market ideas, the concept of penny stocks to buy continues to rank among popular search query items. Perhaps human nature is simply fascinated with macabre, which may explain why horror films generate much popularity. None of us want to experience truly terrifying events in real life but we do want the adrenaline kick.
Well, penny stocks can certainly provide that fix and much more. Prior to engaging in this sector, market participants must realize that both the fun and the pain are real. And if you bet too heavily in this arena, the devastation may be irreversible. Therefore, please do not put more money into these speculative ideas than you can afford to lose. Seriously.
With that caveat out of the way, if you’re still interested in penny stocks, this may very well be the most ideal list. Each one of these names features shares priced under a buck; that’s right, there are no smoke and mirrors in this story. So, if you want to dial up your risk-reward profile to the extreme, here’s how to roll the dice with some of the top penny stocks to buy.
PBSVPharma-Bio Serv$0.87PAFRFPan African Resources$0.22TGLVYTop Glove$0.57PRKAParks! America$0.40WFSTFWestern Forest Products$0.84ALKEFAlkane Resources$0.45CFTLFChinasoft International$0.80
Pharma-Bio Serv (PBSV)
Source: John Brueske / Shutterstock
Billed as the leader in the life science industry, Pharma-Bio Serv (OTCMKTS:PBSV) offers cGMP (current good manufacturing practice) compliance services throughout the product lifecycle, from research and development to commercialization in several sectors. These include categories such as medical devices, pharmaceuticals, and food and beverage. It’s one of the top penny stocks to buy.
Founded in 1993, PharmaBioServ operates out of Dorado, Puerto Rico. At present, the company commands a market capitalization of just under $20 million. As of this writing, shares trade hands at 87 cents. On a year-to-date basis, PBSV gave up 15.5% of equity value.
Although one of the nano-capitalization plays, Pharma-Bio Serv distinguishes itself from other penny stocks with its strong balance sheet. Specifically, the enterprise features a cash-to-debt ratio of 27.3 times, well above the underlying sector ratio of only 0.9 times. In addition, PharmaBioServ has an Altman Z-Score of 5.31, reflecting a very low bankruptcy risk.
Pan African Resources (PAFRF)
Based in the U.K., Pan African Resources (OTCMKTS:PAFRF) represents a mid-tier African-focused gold producer. Currently, Pan African commands a market cap of 403.3 million GBP (translating to approximately $466.4 million). Shares trade hands at only 22 cents a pop. From the start of January, PAFRF stock gained a bit over 3%, a surprising result given the Federal Reserve’s efforts to subdue inflation, which typically is “good” for commodities.
Another factor that will likely raise eyebrows for Pan African is the quality of its financials. Across the board, the company enjoys significant strengths. For instance, its Altman Z-Score hits just over 4 points, indicating low bankruptcy risk. On the income statement, Pan African’s three-year revenue growth rate stands at 21.3%, ranked higher than 80% of its peers.
On the bottom line, the mining firm’s net margin pings at 19.8%. In contrast, the underlying sector’s median net margin is only 3.5%. Finally, PAFRF represents great value compared to many other penny stocks, trading at less than 4-times forward earnings.
Top Glove (TGLVY)
Source: Shutterstock
Founded in 1991, one of the top penny stocks to buy,Top Glove (OTCMKTS:TGLVY) hails from Malaysia. Per its corporate profile, Top Glove represents a glove manufacturer which also specializes in face masks, dental dams, and other products. At the moment, the company carries a market cap of 7.10 billion MYR (roughly translating to $1.5 billion). Since the beginning of this year, TGLVY (which trades hands for 56 cents a share) dropped almost 76% of equity value.
While highly risky (I mean, we are talking about literal penny stocks) it’s also fair to point out that TGLVY experienced some positive momentum recently. In the trailing month, shares gained 13%. In addition, the fundamentals undergirding Top Glove present a surprisingly robust picture. Primarily, the company enjoys strong growth. Its three-year revenue growth rate stands at 54.3%, ranking above more than 93% of its peers.
In addition, TGLVY brings a compelling discount to the table. Currently, shares are priced at 6.25-times trailing-12-month (TTM) earnings. In comparison, the price-earnings ratio for the medical devices and instruments industry is 25.8 times.
Parks! America (PRKA)
Source: Shutterstock
If you’re an animal lover and also trade penny stocks, Parks! America (OTCMKTS:PRKA) offers a two-for-one deal. Headquartered in Pine Mountain, Georgia, Parks! America represents a distinct experience, providing drive-thru animal parks. This attraction enables park visitors to get up and close to wildlife, fostering both entertainment and educational opportunities.
Currently, Parks! features a market cap of just over $30 million. Since the start of the year, PRKA shed 36.5% of its equity value. In the near term, though, positive momentum picked up, with shares gaining 11% in the trailing month.
Still, the main attraction from an investment perspective centers on the financials. Another growth machine, Parks! carries a three-year revenue growth rate of 24.9%, beating out nearly 94% of its peers. Also, its book growth during the same period pings at 22.7%, rising above almost 92% of the industry.
Finally, PRKA separates itself from other penny stocks with its stable balance sheet. Its Altman Z-Score hits 4.45, reflecting low bankruptcy risk.
Western Forest Products (WFSTF)
Source: Shutterstock
Founded in 1955, another one of the top penny stocks to buy,Western Forest Products (OTCMKTS:WFSTF) is based in Vancouver, British Columbia. As the name suggests, Western Forest represents a lumber company. Currently, the company commands a market cap of 354.5 million CAD, roughly the equivalent of $264.1 million. WFSTF shares trade hands for 84 cents a pop. Since the start of the year, the stock dropped slightly over 50% in equity value.
On the charts, Western Forest presents significant risks, not dissimilar to most other penny stocks. However, what distinguishes the company from purely speculative endeavors is the financials. It’s surprising, really. By purchasing WFSTF, you get in part a cash-to-debt ratio of 4.6 times, ranked better than 84% of the underlying sector. On the top line, Western features a three-year revenue growth rate of 9.1%, beating out 78% of its rivals.
Moreover, the company’s net margin stands at nearly 10%, comparing favorably to the industry median of 5%. Finally, for all these attributes, WFSTF trades for 2.4-times trailing earnings. Clearly, Western Forest is one of the penny stocks you can’t afford to ignore.
Alkane Resources (ALKEF)
Source: Shutterstock
Founded in 1969, Alkane Resources (OTCMKTS:ALKEF) calls the “Land Down Under” home. According to its website, Alkane is poised to become Australia’s next multi-mine gold producer. Although it features projects throughout the country, management focuses predominantly on the New South Wales region.
As of this writing, Alkane carries a market cap of $395.2 million AUD or about $257.4 million. ALKEF trades hands for 41 cents a share. Against the January opener, the stock dropped almost 39% in equity value. However, in the trailing five days, ALKEF popped up over 10%, reflecting a possible bullish resurgence.
On the financials, Alkane is arguably best known for its revenue trend. Its three-year sales growth rate stands at 20.8%, beating out 79% of its competitors. Also, the company delivers on the bottom line, particularly with a net margin of 42.6%. This stat ranks above 93% of the industry.Finally, Alkane enjoys a return on equity of nearly 30%, reflecting a very high-quality business. So, don’t let the cheap price fool you. ALKEF may be one of the hidden gems among penny stocks.
Chinasoft International (CFTLF)
Source: Shutterstock
Headquartered in Beijing, China, Chinasoft International (OTCMKTS:CFTLF) is a provider of software and information services. Specifically, it’s involved in the development and provision of end-to-end IT services, including consulting services, technical services, outsourcing services and training services. Currently, Chinasoft has a market cap of 19.7 billion HKD (or roughly $2.51 billion). Shares trade hands for 76 cents. They’ve lost about 40% of market value since the start of the year.
Primarily, what stands out for CFTLF compared to many other penny stocks centers on valuation. Simply put, Chinasoft carries a substantial discount. Per Gurufocus.com, shares trade at 12.9-times trailing earnings. This compares to the software industry’s median PE of 24.6 times. Also, CFTLF trades at 10.7-times forward earnings, which ranks favorably below 86% of its peers.
Another factor to keep in mind is that Chinasoft enjoys a stable balance sheet. Its equity-to-asset ratio is 0.69 times, whereas the industry median ratio is 0.58 times. Also, its Altman Z-Score is 3.74, indicating low bankruptcy risk. While penny stocks represent great danger, if you’re going to gamble, you might as well do so on rational wagers like CFTLF.
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 thatInvestorPlace.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.comPublishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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The post 7 Penny Stocks to Buy to Retire a Millionaire appeared first on InvestorPlace.
As an expert in financial markets and investing, I have a thorough understanding of the concepts and strategies discussed in the provided article. My expertise is rooted in years of experience and a deep knowledge of market dynamics, risk management, and financial analysis. Now, let's delve into the key concepts mentioned in the article:
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Penny Stocks:
- Penny stocks refer to shares of small companies that trade at a relatively low price, typically below $1. These stocks are often considered speculative and high-risk due to their low market capitalization and volatility.
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Investment Risks:
- The article emphasizes the importance of caution when investing in penny stocks, highlighting the speculative nature of these investments. It warns investors about the potential for significant losses and advises against investing more money than one can afford to lose.
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Market Search Queries:
- The article mentions the popularity of search queries related to penny stocks, indicating a widespread interest among investors in exploring these speculative opportunities.
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Speculative Nature of Penny Stocks:
- Penny stocks are characterized as providing an adrenaline rush, attracting investors who seek high-risk, high-reward opportunities. The article acknowledges the allure of speculation while cautioning investors about the real risks involved.
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List of Penny Stocks to Buy:
- The article provides a list of specific penny stocks that the author considers worth exploring. These stocks include Pharma-Bio Serv (PBSV), Pan African Resources (PAFRF), Top Glove (TGLVY), Parks! America (PRKA), Western Forest Products (WFSTF), Alkane Resources (ALKEF), and Chinasoft International (CFTLF).
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Company Profiles and Financials:
- Each penny stock is accompanied by a brief overview of the company, its market capitalization, and share price. The article also discusses key financial metrics such as revenue growth rate, net margin, and other relevant financial ratios.
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Risk Assessment:
- The author evaluates the risk associated with each penny stock by examining financial indicators like the Altman Z-Score, cash-to-debt ratio, and bankruptcy risk. This assessment aims to provide investors with insights into the financial health and stability of these companies.
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Global Market Presence:
- The selected penny stocks operate in various regions, including the U.S., U.K., Malaysia, Canada, Australia, and China. This global presence reflects the diverse nature of penny stocks and the opportunities they present in different markets.
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Valuation Metrics:
- The article touches upon valuation metrics, such as price-to-earnings ratios (P/E) and forward earnings, to assess whether the penny stocks are trading at a discount or premium compared to industry peers. This information helps investors evaluate the relative attractiveness of these stocks.
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InvestorPlace Disclaimer:
- The article concludes with a disclaimer from InvestorPlace, highlighting their editorial policy regarding low-volume stocks and the potential risks associated with investing in such stocks.
In summary, the article provides a comprehensive overview of penny stocks, discusses specific stock recommendations, and offers insights into the financial health and risks associated with these investments. Investors are urged to approach penny stocks with caution and conduct thorough due diligence before making investment decisions.
