It’s been an amazing year so far for Initial Public Offerings (IPOs). The resilience of the bull market and low interest rates have made this space very popular with investors. At the same time, stimulus funds have helped spark frenetic activity in every corner of Wall Street. In addition, we have also seen tremendous progress in growth stocks. However, there is one neglected area of the investment world worth looking into, one with excellent upside potential: penny stocks.
A penny stock is a common share of a listed entity that trades for less than $ 5 per share. As they trade at low price multiples, they offer huge profit potential, although they also come with risk with a higher chance that stocks may fall if the markets take unpredictable turns.
Penny stocks are risky, but they can still be a great investment if you know what to do. People should thoroughly research penny companies before investing in them, as there is always a risk that they will go bankrupt or turn out to be less profitable than expected.
With that in mind, the top five penny stocks to buy right now are:
- American Resource Society (NASDAQ:AREC)
- Seanergy Maritime Holdings Corp. (NASDAQ:BOAT)
- Professional diversity (NASDAQ:IPDN)
- Rolls Royce (OTCMKTS:RYCEY)
- TDH Holdings (NASDAQ:PETZ)
Now, let’s dive in and take a closer look at each one.
Penny Stocks to Buy: American Resources Corporation (AREC)
It’s been a few months since President Joe Biden announced a comprehensive $ 2 trillion infrastructure package to support the post-pandemic economy.
The plan includes roughly $ 2 trillion in spending over ten years and would raise corporate tax rates to 28%, from 25%. The new funds generated will be used to finance public works projects such as the construction of roads or the renovation of airports.
Naturally, the construction industry will benefit from the adoption of this plan. So it makes sense that American Resources is generating a lot of interest. The Indiana-based company is a supplier of raw materials to the global infrastructure market. The main objective of the company has been to supply metallurgical carbon and PCI. Rapid expansion into other areas such as transport services for finished products or temporary storage facilities during construction processes is seen as a potential opportunity in the future.
Total revenue for the last quarter was $ 393,210, compared to 226,836 in the second quarter of 2020. In addition, it raised $ 30.1 million from the sale of 8.6 million shares. to institutional investors through a registered direct offer. However, investors were decidedly upset by the overall loss of the business, which was due to supply chain problems caused by the pandemic. Now that things are clearing up, now is the time to invest in this one and profit from the upside.
Seanergy Maritime Holdings (SHIP)
Seanergy Maritime is a leading provider of maritime and offshore services. On a fully delivered basis, its fleet of 16 Capesize vessels will be on average 11 years old and have a freight capacity of approximately 181,000 deadweight tonnes (DWT). The company’s success over the past year has mirrored that of its industry. However, they made an impressive recovery this time around.
Net sales are up 208% in the second fiscal quarter compared to the previous year quarter. During the year, Seanergy Maritime purchased six Japanese-built Capesize vessels. In the meantime, it is withdrawing some ships from the existing fleet. Purchases are mainly financed by capital increases. Unfortunately, this leads to a substantial dilution. In the future, this will not change.
On the bright side, the company will have a massive fleet once the industry fully recovers from the pandemic. Admittedly, the first half shows that things are already improving steadily. For the first half of 2021, revenue was $ 48.2 million from $ 22.4 million a year earlier, an increase of 115%. So, going forward, the company expects things to continue to improve as the transportation industry returns to normal.
Penny Stocks to Buy: Occupational Diversity (IPDN)
Professional Diversity Network is a global developer and operator of online networks that provide networking opportunities to various professionals through member support services, including learning events with seminars on leadership skills or on leadership skills. best way to network effectively in the business world.
A diverse workforce is a growing trend in today’s society. Diversity can encompass a lot of different things. But the most obvious difference between people who do not work outside and those who do, concerns their origin, whether it is an island kingdom off Asia or Latin America, or rural Appalachians.
With all of this in mind, companies like Professional Diversity are not moving the needle right now. But they have a lot to gain in today’s environment. More companies than ever want to make sure they have a diverse team to best meet the needs of customers around the world. According to a research report from McKinsey & Company, approximately $ 8 billion per year is allocated to diversity training. Even gaining a share of this market will be a major blow to professional diversity.
It may seem odd that an iconic name like Rolls-Royce is a penny stock. But there are several reasons for this. The return of air travel is welcome for investors, but there have been setbacks. Demand is inconsistent and Rolls-Royce and other companies in the industry are suffering.
A second reason is that the company’s liquidity has been increased at the expense of shareholders. A large dilutive rights issue was not well received by shareholders. Although the move was aimed at strengthening the balance sheet, it dampened investor enthusiasm. In addition, as the crisis is not over, there could be further capital increases along the way. One can understand the reason for the skepticism.
However, there are several advantages to adding or initiating a position in RYCEY shares when trading at such a discount. First, Rolls-Royce has repeatedly stated that it expects positive free cash flow in the second half of this year. It has already returned to profit in the first half of 2021. The company reported a profit of £ 133million in the first half of the current fiscal year. After recording billions in losses last year and considering the outlook, stocks are trading at just 3.1 times the price / earnings (P / E) ratio.
Penny Stocks to buy: TDH Holdings (PETZ)
TDH Holdings is a Chinese producer and distributor of pet food products. They have been producing innovative solutions for dog health needs since 2002. Their extensive line includes dry snacks like chews or cookies as well as wet boxes ideal for any puppy’s dietary needs, including dog products. essential dental hygiene.
The earnings aren’t huge for this one, $ 815.23,000 on a rolling 12 month basis (TTM). But the potential is enormous. According to a white paper on the Chinese pet industry, in 2020, China’s urban pet market was worth nearly 300 billion yuan, a figure that has been on an upward trajectory for six years now. The pandemic has only exacerbated an already growing trend. And with more and more people around their pets, the PETZ stock has good prospects for the future.
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On Penny Stocks and Low-Volume Stocks: With rare exceptions, InvestorPlace does not post reviews on companies with a market capitalization of less than $ 100 million or that trade less than 100,000 shares each day. This is because these “penny stocks” are often the playground of crooks and market manipulators. If we ever post a comment on a low volume stock that may be affected by our comment, we require thatInvestorPlace.comThe editors of ‘s reveal this fact and warn readers of the risks.
Read more: Penny Stocks – How To Profit From It Without Getting Ripped Off
At the date of publication, Faizan Farooque did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Faizan Farooque is a contributing author of InvestorPlace.com and many other financial sites. Faizan has several years of stock market analysis experience and was a former data reporter at S&P Global Market Intelligence. His passion is helping the average investor make more informed decisions about their portfolio. Faizan does not directly own the securities mentioned above.