If you’re looking to make some money, but don’t have the capital to invest in the big companies, these are the best penny stocks invest in.
Did you know that you don’t need a ton of money to start investing in the stock market? If you want to start investing but don’t have a lot of cash, penny stocks might be an option for you.
While they don’t actually cost just a penny, they are usually valued at less than $5.
Penny stocks are highly volatile, meaning the price can fluctuate wildly. But, if you find the right one, they can really pay off. Keep reading to learn about some of the best penny stocks out there and dip your toe into the investing game.
What Are Penny Stocks?
Penny stocks are low-priced, mid-cap stocks. The SEC defines penny stocks as anything that costs less than $5. Most of the time, penny stocks are not traded on the big stock exchanges like the NYSE and NASDAQ. There are some stocks for less than $5 on the big exchanges, but they are few in number.
Penny stocks are volatile. They can increase and decrease in price quickly. While this could be seen as a downside of penny stocks, it can make you a lot of money if you pick the right one. Penny stocks are a great way to buy into a company that’s just starting out and has a lot of potential.
Need a brush-up on the basics? Click here to learn more about penny stocks.
Where Can You Buy Penny Stocks?
Since most penny stocks aren’t sold on the big exchanges, you need to find out where to buy them. You can use a stockbroker or you can buy them on a listing service.
Over-the-Counter Bulletin Board (OTCBB) is a listing service that has listing requirements to sell a stock. The listing requirements aren’t the same as the big exchanges, but there is some regulation. Another listing service is Pink Sheets. Pink Sheets does not have any listing requirements, so OTCBB is preferable.
Pink Sheets also isn’t registered with the SEC, so buying stocks through them is risky. If you don’t want to take a big risk with penny stocks, you can buy some of the inexpensive stocks from the big exchanges. You are much less likely to be scammed by buying here.
Either way, do your research, make sure the company is legitimate, and ensure that you’re not getting scammed.
10 Of The Best Penny Stocks for 2018
Now that you’ve decided to take the plunge into the penny stock game, here are 10 of them that you should consider buying this year.
1. Chesapeake Energy (CHK)
CHK is trading at $3.46 and is a risky investment, but could potentially have a high payoff. They have a substantial amount of debt due to the oil and gas bust. There are plans to reduce the debt and increases in gas and oil prices will benefit CHK.
2. Limelight Networks (LLNW)
Limelight Networks is an Internet content delivery provider. Revenue has risen 14% in the first half of 2018. At $4.03 a share, experts expect that this price will increase, pricing it out of the penny stock category.
3. Plug Power (PLUG)
Plug Power is a hydrogen vehicle developer. They’ve mad agreements with Walmart, Amazon, and FedEx in recent years which are expected to contribute to its growth.
The revenue is growing quickly and if investors can be patient and tolerate volatility, the wait should pay off.
4. Arotech Corporation (ARTX)
Arotech is an international defense and security services company and also acts as a defense contractor. In this role, they make products for military, homeland security, and law enforcement. Increases in defense spending will be a good thing for Arotech.
5. DHX Media (DHXM)
DHX media has seen some declines this year, but some expansions of its portfolio show some promise. It is partnering with Sony and also has reduced debt. This investment is risky, but like many of the others, could really pay off for investors.
6. Mid-Con Energy Partners (MCEP)
Mid-Con Energy Partners is an oil and natural gas provider and its success rests on oil prices. As crude oil prices increase, shares of MCEP will increase as well.
If crude oil prices rise to their 2013 levels of over $100 per barrel, MCEP shares could jump from $1.75 per share to over $20 per share. Investors who are patient will make out if this happens.
7. mCig (MCIG)
mCig is a marijuana-industry company that got its start with vaporizers but has expanded to a marijuana cultivation and construction company operating in three states.
Growth to both coasts is a good sign for revenue. The shares are priced extremely low, at less than 25 cents a share. However, this is much higher than the 2016 share price, so if the upward growth continues, this will be a good investment.
8. Tuesday Morning Corporation (TUES)
Tuesday Morning is a home-goods store operating all over the country. At $3.30 per share, it’s one of the more expensive stocks on the list. It has seen increases in revenue over the past two quarters, indicating that there is a potential for growth and profit.
9. Groupon, Inc. (GRPN)
Groupon is likely the most well-known company on this list. A daily-deals company, it’s been around since 2011. Their income is projected to grow and sales are expected to increase in 2019 as well. Investors waiting for the increase could be pleasantly surprised in 2019.
10. Zynga Inc. (ZNGA)
If you’ve ever played Farmville or Words with Friends, you’ve enjoyed one of Zynga’s products. The CEO and founder recently relinquished control off the company, which is expected to increase its growth. It’s not on the radar of many investors yet, so it’s a good time to get in and wait for the price to shoot up.
The Bottom Line
Penny stocks are a great way to explore the market with a little bit of money. With some research and comfort with risk, you could make yourself a great deal of money in penny stocks.