Penny stocks possess a unique allure for a wide array of investors. Even in the face of market volatility, there’s frequently a subset of these low-priced stocks surging in value. Investing in penny stocks can be likened to setting off on a thrilling treasure hunt.
These stocks, often trading below five dollars per share, tantalize with the potential for massive gains. During periods of market uncertainty, it’s not rare to find penny stocks that significantly outshine their pricier counterparts.
However, it’s essential to recognize that the realm of penny stocks isn’t without its thorns. Alongside the potential for lucrative returns comes considerable risk. Often linked to smaller, less mature companies, penny stocks inherently possess a volatile nature.
Investors must be ready to face the potential for substantial losses. For the risk-averse, the rewards can be astonishing, with the potential for triple or even quadruple digits.
Are Penny Stocks a Viable Investment?
Is it common to achieve such massive gains? Not necessarily. However, it’s worth highlighting that the likelihood of uncovering penny stocks that have soared by 40%, 50%, or even 100% in a single trading session has been notably high of late. With penny stocks, such extraordinary gains are indeed within reach.
Is There Money to be Made in Penny Stocks?
Interestingly, broader market trends often have little bearing on penny stock performance. While blue-chip stocks may fluctuate in line with economic indicators and overall market sentiment, inexpensive stocks frequently forge their own path. They can resist trends and shatter expectations. This autonomy, however, doesn’t eliminate the need for investors to remain vigilant about general market dynamics.
Understanding the forces that shape broader market movements can offer a valuable context for assessing penny stock potential. Elements such as interest rates, inflation, global occurrences, and sector-specific news can sway investor sentiment and, consequently, the overall market trajectory.
Being attuned to these factors can empower investors to make well-informed decisions, allowing them to traverse the risky yet potentially lucrative landscape of penny stocks to watch with greater confidence and effectiveness.
Penny Stocks to Watch
Trust Stamp Inc. (NASDAQ: IDAI)
Knightscope Inc. (NASDAQ: KSCP)
Sirius XM Holdings Inc. (NASDAQ: SIRI)
Trust Stamp Inc. (IDAI)
The identity technology company provides AI-powered trust and ID services across several sectors. Recently, the company announced a patent allowance by the USPTO titled “Systems and processes for lossy biometric representation.”
Earlier this year, Trust Stamp announced a Notice of Allowance for an additional patent by the United States Patent and Trademark Office. This Notice of Allowance follows a previous patent allowance from earlier in the month. The patent is titled “Systems and Methods for Identity Verification via Third-Party Account.”
The company uses a “proprietary process to establish control of one or more third-party accounts as a primary or secondary identity authentication factor and is intended to complement Trust Stamp’s AI-generated Irreversibly Transformed Identity Token (IT2) technology.”
Earlier this month, the company also received a patent titled, “Systems and Methods for Privacy-Secured Biometric Identification and Verification.” Dr. Norman Poh, Chief Science Officer of the Company explained in a related update, “We are seeing an increased market focus on protecting the privacy and data security of the end-users of biometric services, a consideration that has been at the forefront of Trust Stamp’s products from our inception. For the last six years we have invested heavily in research and development which has created a solid foundation for our current and future generations of cutting-edge, privacy-first identity products and we believe that is now reflected not just in these patent issuances but also in the accelerating implementations of our technology.”
The penny stock is up over 40% between Tuesday and Wednesday’s sessions.
Knightscope Inc. (KSCP)
Shares of Knightscope continued trading higher in the stock market today. The company is known for its autonomous security robots and emergency communication systems. For the better part of the last few weeks, KSCP stock has traded higher. Initially, the catalyst for the bullish move came after Knightscope highlighted a conversation about its 2023 projections on a popular stock market podcast.
The company also announced payback in full of $6 million of convertible notes. The sentiment had been much more upbeat leading up to July and the latest headlines from the company stoked that trend this week.
Georgia State University selected Knightscope Authorized Partner Transportation Solutions & Lighting, Inc., – Safety and Security Division – National Safety Systems to supply, install, and support more than 50 Knightscope K1 Blue Light Emergency Towers and Call Boxes throughout their downtown Atlanta campus.
This month, Knightscope is back in focus after several week’s of selling off. The coampy announced its all-new Knightscope K1 Hemisphere being deployed in Hawaii. William Santana Li, chairman and CEO, Knightscope, Inc. also explained, “Criminals and terrorists can be anywhere. If we are to fulfill our mission, then Knightscope needs to be everywhere, both outdoors and indoors. Similar to our recently announced Automated Gunshot Detection (‘AGD’), this all-new product continues the march towards significantly increasing our TAM (‘Total Addressable Market’) as the go to public safety innovator.”
Looking ahead, Knightscope is hosting a Q2 Town Hall update on August 14th. So if KSCP stock is on your radar, keep that date in mind.
Sirius XM Holdings (SIRI)
We’ve highlighted SIRI stock among a list of penny stocks experiencing a recent uptick in price over the last several weeks. Shares experienced a steep downturn at the beginning of this year. It was primarily due to an economic slump and unimpressive earnings, which sent some investors scurrying for safer grounds.
The case for SIRI stock is a bit muddled since there hasn’t been any significant improvement in earnings. But the overall sentiment in the stock market appears to have lightened, at least for now. In an interview with CNBC in April, CEO Jennifer Witz said that the quarter itself was expected and the rest of the year is expecting growth.
Attention has primarily been focused on the short interest in SIRI stock. In the last month, traders found this to be a sticking point, and eventually, SIRI stock squeezed to highs of $7.95. Now that the proverbial air has been let out a bit, shares have begun steadily trading sideways over the past week.
Most recently, earnings have been a catalyst for the company. Revenue came in line with expectations. However, full-year free cash flow guidance was raised to $1.15 billion. Analysts reacted with increased price targets from Wells Fargo and Goldman Sachs.