Penny Stocks That Will Make You Rich – Without a doubt, a strong portfolio usually includes stocks with strong fundamentals and solid performance. In a bull market, these investments provide good returns and protect against capital erosion. However, we shouldn’t overlook the benefits of owning penny stocks either. The get-rich-quick angle with these options is a real possibility. Therefore, they continue to be of interest to investors.
This means that penny stocks can also be a double-edged sword. Naturally, everyone is attracted by the low price. But it is extremely important to understand which stocks are trading cheap and which are trading cheaply. The former can have real potential to overwhelm your portfolio.
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With the retail frenzy we’ve seen this year, it doesn’t seem like there’s much need to move the needle on these bargains. This is partly due to very active social media forums that closely follow the sector, such as Reddit’s r/WallStreetBets. But at the end of the day, everyone is looking for a big return on their investment.
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First on this list of penny stocks is Surgalign, a medical device developer focused on spine and digital surgery. This company markets various devices for both surgical and non-surgical treatment of spine problems.
Last year, it was weighed down by reductions and cancellations of inpatient procedures at the top end. However, Surgalign’s fantastic second quarter results show that the company is now back with a bang and looking to strengthen its position in the industry.
In the second quarter, SRGA reported revenue growth of 20.9% year-over-year (YOY) to $24.8 million. In addition, its gross margin was an incredible 71% (page 28), which is exceptional for a medical device developer. According to management, the total addressable market for lumbar spine procedures is $5 billion. If the company had just 5% of that market, it would see $250 million in revenue. Therefore, SRGA stock has great potential to grow exponentially in the coming years.
Next on this list of penny stocks is FLXN stock. Flexion is a biopharmaceutical company specializing in drugs that relieve local pain in patients suffering from musculoskeletal disorders. Specifically, it focuses on pain relievers for osteoarthritis.
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Flexion’s flagship drug, Zilretta, is currently used as an anti-OA pain reliever for the knee. But the treatment is also being tested for shoulder indications.
Despite the ongoing pandemic, this company’s second quarter results were very encouraging. For example, revenue grew to $28.2 million, an 82% increase over last year. In addition, Flexion’s net loss was better than forecast. The company also had $131.23 million in cash in the second quarter, with cash expected in 2023. In addition to Zilretta, the company has other promising candidates in early development.
Based in Greece, the next entry on my penny stock list is a bulk carrier called Seanergy Maritime Holdings.
Understandably, this company had a rough 2020. However, it has picked up in recent quarters and revenue growth is double-digit year-over-year. Seaenergy has also aggressively optimized its fleet and increased its net asset value (NAV). However, SHIP stock is trading at a significant discount to its NAV and future prospects.
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The company’s second-quarter revenue of $22.5 million is up 380% year-over-year. In addition, its earnings per share (EPS) of 1 cent were in line with forecasts. Through effective financial management, SHIP has expanded its fleet without compromising on flexibility. Perhaps that’s why it has such impressive projections for future cash flow growth.
Israel-based Ceragon is a 5G play that has been in the news recently after announcing orders worth $35 million from Indian mobile operators. In addition, the company also announced that it has signed a multi-year service agreement with “a leading service provider in the US.” Management now believes it is well-positioned to benefit from the 5G transition. Despite these upsides, CRNT stock trades at just 1.1 times forward sales.
After some tough quarters in 2020, Ceragon showed some positive revenue growth numbers. For the second quarter of 2021, revenue of $68.6 million was up 9.9% year-over-year. In addition, the company’s adjusted gross margin was a healthy 31.5%, with operating income of $500,000, compared to a significant net loss of $3.5 million in the second quarter of 2020.
This company expects to beat its consensus estimates on revenue of $284.2 million. Therefore, expect CRNT stock to make big waves in the coming years due to the accelerated growth of the 5G market. This name is certainly an interesting choice among penny stocks.
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Cryptocurrency miner Hive Blockchain is currently one of the largest publicly traded Ethereum (CCC: ETH-USD ) miners on the market. In fact, the Hive Blockchain provides “over 5% of the total hashrate of the Ethereum network.” In addition, it also has a significant hashrate of industry leader Bitcoin (CCC: BTC-USD ).
However, Ethereum’s transition to a proof-of-stake model may make mining redundant. True, miners indirectly gain from the price increase resulting from the innovation or from the possible price increase due to stronger “tokenomics”. Regardless, it’s most likely that Hive’s earnings will take a big hit in the short term. Nevertheless, it should effectively refocus its GPU fleet to build high-end data centers in the long term.
Next on this list of penny stocks is Carlotz, a used car consignment and retail company. Despite recent headwinds, this company has done a great job of expanding its top line and implementing growth initiatives. For example, they’ve opened new locations, hired new employees, and made major marketing initiatives over the past six months. LOTZ shares are currently trading at just 1.71 times forward sales, despite significant projections for future earnings growth.
Carlotz had $107 million in revenue for the six months ended June 30, 2021, roughly double the same period last year. However, it struggled with operating costs. This then led to a sharp increase in net loss.
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But in the long run, this business model should prove resilient. The shortage should be eliminated, the prices of new cars should rise, and the sellers should return as shipment partners.
Last on this list of penny stocks is Trivago. Hotel booking platform Trivago has suffered along with the rest of the travel industry due to the Covid-19 pandemic. This is evident from its results for the first quarter of 2020 to 2021, where revenues fell sharply. However, in the most recent quarter, revenue rose to 95.5 million euros ($112 million), up 493% year-on-year. Therefore, TRVG shares appear to be back in action and should do well once the pandemic subsides.
For now, management is optimistic about pent-up demand in the second half of the year as economies recover globally. In addition, the company has done well in controlling costs, reducing marketing costs. As a result, the net loss for the last quarter was 3.3 million euros ($3.87 million), which is significantly lower than the previous quarter.
Although it will take a year for the company to fully recover, opportunities await in the post-Covid world. It may explode soon.
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Thomas Yeung is an expert on finding fast growth opportunities on Reddit. He recommended Dogecoin before it rose over 8000%, Ripple before it rose over 480% and Cardano before it rose 460%. Now, in a new report, he names 17 of his favorite Reddit penny stocks.
About penny stocks and small-cap stocks: With the rarest of exceptions, do not post comments about companies with a market capitalization of less than $100 million or less than 100,000 shares traded per day. This is because these “penny stocks” are often the playground of fraudsters and market manipulators. If we ever comment on a small-cap stock that may be affected by our comment, we must do so
As of the date of publication, Muslim Farooque has no position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author based on
Muslim Farooque is an avid investor and an optimist at heart. A lifelong gamer and tech enthusiast, he has a special interest in analyzing tech stocks. Muslim holds a BA in Applied Accounting from Oxford Brookes University. No matter how many times financial pundits warn people to buy penny stocks to get rich, the segment continues to attract attention. “Oh look, this stock is changing hands for only two bucks…that must be a good deal!” At least that’s how it feels, leading down an often dark and dry path. But from experience, don’t commit to this sector without really considering what you’re getting into.
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However, you are here for a reason. Furthermore, it is not fair to question all penny stocks as destructive investments. Apparently cheap speculative interest rates have made some millionaires in the past. It’s just that you estimate the odds. These
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