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Best Penny Stocks to Invest In 2023
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Best Penny Stocks to Invest In 2023
Penny stocks are usually volatile due to their cheap prices; hence, finding the best penny stocks to invest in requires due diligence on your part. It is important to understand how the penny stock company functions and the fundamentals governing it.
June 09, 2023
Few Best Penny Stocks to Invest in
Sandstorm Gold (NYSE: SAND)
Gold has been performing well, making it an opportune time to invest in NYSE-listed Sandstorm Gold. The company operates as a gold royalty company, receiving a percentage of mining companies’ gold production or revenue in exchange for upfront payments. Sandstorm Gold is experiencing rapid revenue growth, boasting a profit margin four times the sector average.
The Yahoo stats reveal the recent profit margin for the company is 53.95%. With its promising performance, it may not be long before Sandstorm Gold transitions into a higher-priced stock category. The stock is currently trading at $5.42, near its 200-day moving average (DMA), which stands at 5.48.
American Lithium (AMLI)
American Lithium (NASDAQ: AMLI) is a prominent player in the lithium industry, poised to meet the increasing demand for lithium carbonate driven by the growing electric vehicle (EV) market.
The company aims to enhance its manufacturing capacity with its Tonopah Lithium Co. project in Nevada and significant grant funding. Although currently unprofitable and without revenue, patient investors may find American Lithium (AMLI) stock to be an enticing choice among penny stocks. The stock is presently trading at $1.93 and has a support level near $1.80.
Butler National (OTCMKTS: BUKS)
It is a fundamentally-strong penny stock in the aerospace and casino gaming industry. The company has reported a strong rise in profitability in recent years, leading to substantial price appreciation for its shares. Patient investors have experienced favorable returns. Trading at around 8.9 times earnings, Butler National presents a deep value opportunity.
There is potential to unlock the underlying value of the company’s two main operating segments through a spinoff or asset sale. Furthermore, the launch of sports betting in Kansas serves as an additional catalyst for the stock, as Butler’s gaming property already hosts two sportsbook operators and has the potential to attract a third sub-licensee. The stock is trading above its 50 and 200 DMA with a relative strength index of around 68, suggesting bullish momentum.
How to Invest in the Best Penny Stocks?
Once you have identified the best penny stocks to invest in, you need to take care of the following aspects while investing:
- Choose a broker that offers trading in penny stocks, especially Over-The-Counter (OTC) penny stocks.
- Look for a broker with a history of trading penny stocks and access to OTC markets.
- Be aware that some brokers may charge higher fees for trading OTC penny stocks.
- OTC penny stocks may undergo regulatory oversight, leading to additional fees.
- Research and understand all potential fees associated with penny stock investments.
- Implement a proper risk management strategy when investing in penny stocks and check sufficient liquidity for entry and exit.
FAQs
The potential return on investment for penny stocks can be high but comes with high risks and volatility.
Yes, penny stocks can be included in a diversified investment portfolio, but limiting the percentage of the portfolio invested in them is advisable.
There is no set amount, but investing only the amount you can afford to lose is recommended when dealing with penny stocks.
Due to the volatile nature of penny stocks, it is important to monitor them regularly to stay informed about any significant changes.
Two common penny stock scams to be aware of are pump-and-dump schemes and dealing with unregulated brokers.