The Pros and Cons of Investing in Penny Stocks
Penny stocks, which are stocks priced below $5 per share, can be an alluring investment option for many investors due to their low cost and potential for generating high returns. However, investing in these stocks comes with higher risk, and it’s essential to approach them cautiously.
The Advantages of Investing in Penny Stocks
One of the reasons why some investors may consider buying penny stocks priced under $1 is the potential for significant gains. These stocks are often associated with smaller, lesser-known companies that may experience massive price fluctuations quickly, resulting in a high return on investment.
Moreover, penny stocks can also appeal to investors looking to diversify their portfolios. By investing in various low-priced stocks, investors can spread their risk across multiple investments and potentially reap the rewards of any high-performing stocks.
The Risks of Investing in Penny Stocks
However, it’s important to note that investing in penny stocks comes with inherent risks. These stocks are often associated with companies with limited financial resources or an unproven track record. Therefore, investing in penny stocks requires careful research and due diligence to avoid scams or companies that are unlikely to succeed.
How to Evaluate Penny Stocks
When searching for penny stocks to invest in, looking for companies with a solid financial position and a clear growth strategy is crucial. Some investors prefer to invest in companies operating in a niche market or offering a unique product or service. However, it’s important to remember that not all penny stocks are created equal, and thorough research is essential before making investment decisions.
Finding Penny Stocks to Buy
There are several ways to find potential penny stocks to invest in. For instance, you can turn to financial news websites or investment forums or use a stock screener. Nevertheless, it’s crucial to conduct extensive research before making any investment decisions.
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Investing in penny stocks can diversify your portfolio and potentially generate significant returns at a low cost of entry. However, investing in these stocks requires caution and thorough research to avoid scams or companies that are unlikely to succeed. You may find cheap stocks that offer high potential returns by doing proper research and investing wisely.
As with any investment, the decision to invest in penny stocks is entirely up to the individual. It’s crucial to conduct your research and evaluate your investment goals and risk tolerance before making any investment decisions. Doing so lets you determine if cheap stocks align with your investment strategy and help you achieve your financial goals. So let’s see what happens with a few more penny stocks under $1. This is a continued list from our article 7 Penny Stocks Under $1 To Watch Now, Time To Buy? and we’ll include the complete list of 10 at the end of this update.
Penny Stocks To Watch
Gran Tierra Energy Inc. (GTE)
If you’re looking for penny stocks under $1, you’re bound to run into stock charts that aren’t so exciting. This may be the case for Gran Tierra Energy, as GTE stock recently pinned new 52-week lows at the end of February. However, now that energy stocks have come back into focus, in general, Gran Tierra has gained some long-awaited attention.
Other than industry momentum, it may also have something to do with recent earnings results. Gran Tierra reported strong 2022 performance, including a 103% increase in Adjusted EBITDA to $490 million in 2022. The company also saw its 1P and 2P net asset value per share before tax jump 77% and 56%, respectively. Funds flow from operations increased 96% year over year to $366 million and was the highest on record.
CEO Gary Guidry, explained in a recent earnings update, “Our many 2022 achievements resulted in year-over-year production growth of 16%, strong reserves replacement ratios well above 100%, and the highest annual figures in the Company’s history for net income, funds flow from operations and free cash flow…our 2023 Acordionero and Costayaco development drilling programs are now underway, while the Moqueta development drilling campaign that we started in fourth quarter 2022 is continuing.”
With energy stocks on the move, coupled with a strong performance in 2022, GTE stock is on the radar as shares shot higher by more than 6% during Friday’s session.
Skillz Inc. (SKLZ)
Shares of Skillz Inc. have bounced back the last two sessions even as the stock market has fluctuated. One of the points of interest for traders and investors right now is its upcoming earnings report on March 14th. In its last earnings report, the mobile game platform technology company failed to wow the market and missed EPS estimates. The company also reported lower sales than its previous year’s quarter.
CEO Andrew Paradise also said, “This has been a challenging year for Skillz, and though there is no quick fix, the path to re-accelerating growth is now well-defined across the Company. We have identified the things we can and cannot control and have a plan in place which focuses on four key pillars to enable us to return to durable growth and long-term profitability…These include right-sizing the organization; enhancing the platform to improve customer success and engagement; re-hauling our go-to-market strategy; and, demonstrating a clear financial path to profitability.”
News of dismissing a class action suit against the company seems to have brought back some optimism to its stock. With earnings coming up in a few weeks, chances are all eyes will be on whether or not Skillz could make appropriate actions to begin turning things around.
Faraday Future Intelligent Electric Inc. (FFIE)
EV stocks have come back into focus as shares of larger companies like Tesla and Lucide rebound. Faraday’s focus has been on the commercial release of their top electric vehicle (EV), the FF 91 Futurist. Faraday has also changed its leadership and funding plans, which has instilled confidence in investors. Tin Mok, the Global Executive VP of Global User Exosystem, was recently appointed to the Board of Directors.
Production of the FF91 sedan is set to begin next month, with delivery expected to start in April. Priced at around $200,000, this high-end model is deemed the “most important historic moment since FF was established,” according to CEO Chen Xuefeng. Thanks to recent funding of $135 million, Faraday has all the necessary equipment to manufacture the FF91.
With earnings coming up next week, it could be a source of speculation. If FFIE stock is on your list, keep March 8th in mind. Results come after the closing bell.
List Of Penny Stocks Under $1
- Gran Tierra Energy Inc. (NYSEAMERICAN: GTE)
- Skillz Inc. (NYSE: SKLZ)
- Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE)
- E-Home Household Service Holding (NASDAQ: EJH)
- Top Ships Inc. (NASDAQ: TOPS)
- Harbor Custom Development (NASDAQ: HCDI)
- VivoPower (NASDAQ: VVPR)
- TransCode Therapeutics (NASDAQ: RNAZ)
- Novo Integrated Sciences (NASDAQ: NVOS)
- VBL Therapeutics Ltd. (NASDAQ: VBLT)