High-risk/high-reward is a significant factor when you think of penny stocks. In many cases, most of these cheap stocks are traded by the retail community, with mom and pop investors searching for quick gains. Since we’re talking about stocks under $5, even the slightest move can mean big money.
The low price also allows traders to grab prominent share positions for relatively low capital outlay. This makes penny stocks appealing for traders with smaller accounts as leverage can act as a significant asset without the added complexities of something like options. So what are the best penny stocks to buy this week? Let’s take a look at a few popular names in the stock market today, and then you can be the judge.
Penny Stocks To Buy
- Red Cat Holdings (NASDAQ: RCAT)
- AgEagle Aerial Systems (NYSE: UAVS)
- Guardforce AI Co Ltd. (NASDAQ: GFAI)
- Hour Loop Inc. (NASDAQ: HOUR)
Best Penny Stocks To Buy This Week
When looking for the best penny stocks to buy, the biggest thing to remember is your timing. For example, if you’re a day trader, the chances are that the “best” names on your list are ones with the potential to turn a profit “today” versus the next several days. However, if you’re a swing trader or investor, then the “best” stocks to add to your list will involve other factors that could include certain fundamentals as opposed to technicals only. As you look over this list of penny stocks, keep your time horizon and trading strategy in mind.
Red Cat Holdings (NASDAQ: RCAT)
Shares of Red Cat Holdings popped with solid volume on Monday. As tensions remain high, companies exposed to government contracts and defense-related catalysts have come into focus. Red Cat specializes in drone software technology and had its Teal subsidiary selected by the Department of Defense’s Defense Innovation Unit and the U.S. Army. The company was chosen to compete in a Short Range Reconnaissance Tranche 2 Program of Record.
Since the program’s goal is to provide small, unmanned aerial system duties, Teal plans to offer solutions for situational awareness beyond the “next terrain” feature. George Matus, founder and Chief Executive Officer of Teal, also noted, “The $1.5 million prototype contract we were awarded for SRR T2 reinforces the sophistication and technical expertise of our entire Teal Team. We look forward to developing the Army’s next-generation sUAS to improve the safety and lethality of our warfighters.”
With the continued uncertainty surrounding the situation between Russia and Ukraine, RCAT and other related stocks have been ones to watch this month.
AgEagle Aerial Systems (NYSE: UAVS)
Like Red Cat, AgEagle has involvement in the surveillance and drone industries. The company provides drones, sensors, and software solutions to its clients. Last week, the company announced that its senseFly subsidiary would become one of the first 11 vendors to complete required testing to be designated a “Blue UAS” under the Defense Innovation Unit’s (DIU) Blue sUAS 2.0. The result was senseFly’s eBee TAC Unmanned Aerial System (UAS) was approved by the DIU for procurement by the U.S. Department of Defense.
Barrett Mooney, Chairman and Chief Executive Officer of AgEagle, stated, “The eBee TAC is ideally positioned to become an in-demand, mission-critical tool for the U.S. military, government and civil agencies, and our allies worldwide. We expect this to be a major growth catalyst for AgEagle in 2022, positively impacting our financial performance in the years ahead as AgEagle solidifies itself as the go-to source for high-performing, state-of-the-art full-stack drone solutions that get the job done.”
Given the continued uncertainty in the Russia-Ukraine conflict, surveillance and defense stocks are gaining more interest from investors. UAVS stock has surged again during the early session to start the week.
Guardforce AI Co Ltd. (NASDAQ: GFAI)
Guess what trend Guardforce AI is following right now. If you guessed the defense or security solutions, you’d be correct. Guardforce specializes in security solutions and “Robotics as a Service” (RaaS) technology.
Last week the company signed a deal to expand its RaaS to China’s Greater Bay area. In particular, Guardforce proposed the acquisition of Shenzhen Keweien Robot Service and Guangzhou Kewei Robot Technology. With the deal anticipated to close by April, the timetable has come into focus for some traders this month.
Furthermore, Guardforce also reiterated its full-year revenue expectations, representing a 66% growth rate compared to 2021. Considering the proposed acquisition and expectations of $55-$60 million in revenue this year, GFAI stock appears to have caught some attention in the stock market today.
Hour Loop Inc. (NASDAQ: HOUR)
Online retail hasn’t been a hot topic this month. If anything, tech, in general, was on the receiving end of heavy selling pressure, as we’ve seen on Monday. Regardless, recently IPOd eCommerce company Hour Loop has gained some traction over the last few sessions. In particular, the company operates as a third-party seller on Amazon with expanded operations on Walmart’s eCommerce site.
No significant headlines have come out from the company this month to justify the uptick in market activity. However, recent filings could shed some light on a few things. Last week, Hour Loop published its latest 8-K filing, including an updated Q1 corporate presentation.
Among the key highlights, Hour Loop pointed out several strategic partnerships that could have raised some attention on the company. These partnerships included FedEx, Estes Express, and Teknia, a Philipines-based web solutions provider. According to the company, based on its current model, its capable of outperforming Target, Walmart, Alibaba, and Amazon by wide margins on a Revenue Per Employee model. Following this latest filing, HOUR stock has experienced an uptick in market action heading into the new week.
Final Thoughts On Penny Stocks
Penny stocks are high risk, but with that risk comes great reward potential. Understanding how to buy penny stocks and putting together a strong watch list are critical for making money trading. If you’re new to the markets, in general, here are a few articles that could help get you started: