3 Unpopular Penny Stocks That Could Prove Naysayers Wrong
Here’s the ugly truth about unpopular penny stocks to buy: statistically, they’re more than likely to prove naysayers right.
Yes, I know, I’m contradicting the title of my own narrative. I get it. But there’s one thing that you need to get before you start perusing this space. It’s an extremely speculative sector. Popular or not, penny stocks tend to destroy value on average rather than create it. If that wasn’t the case, they’d at least be respectable small-capitalization plays.
Still, I also understand the allure behind this market segment. Basically, you likely won’t get rich betting on dividend-paying blue-chip securities. If you want upside – especially dramatic upside – you got to go against the crowd. On that note, below are unpopular penny stocks to buy.
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Galiano Gold (GAU)
Source: Misunseo / Shutterstock.com
Based in Vancouver, British Columbia, Canada, Galiano Gold (NYSEAMERICAN:GAU) is a precious metals exploration firm. Per its website, the company commands a 45% interest in what it terms a quality asset. This consists of a large deposit of a 4.6 million ounce mineral resource and a 2.1 million ounce mineral reserve.
Fundamentally, Galiano could be intriguing because of the sticky inflation. Basically, the underlying asset represents a universal hedge against rising prices. Even better, the mining firm enjoys support from the analyst community, who project 2024 revenue to land $323.37 million on average. Further, the most optimistic target calls for sales of $367.62 million.
Looking out to 2025, the top line on average may reach $512.1 million. If so, that would represent a massive 58.4% leap from 2024’s projected sales. As well, the market seems to respond nicely to GAU stock, which has gained over 21% since the start of the year.
Overall, experts rate shares a consensus moderate buy with a $1.59 price target, implying 42% growth potential. Even though it doesn’t generate much news, it’s one of the unpopular penny stocks to buy.
Ring Energy (REI)
Source: shutterstock.com/Wojciech Wrzesien
Based in Midland, Texas, Ring Energy (NYSEAMERICAN:REI) bills itself as a growth-oriented independent oil and natural gas company. Per its website, Ring focuses on the acquisition, exploration, and development of high-quality, oil and liquids-rich assets in the Permian Basin. However, it doesn’t seem to resonate with the market. Since the start of the year, REI slipped more than 3%.
What’s worse, in the past 52 weeks, Ring shares incurred a drop of almost 36%. Over the past five years, they plunged over 76%. Still, analysts believe in the company. On Thursday, management will likely release its fourth-quarter earnings report. Based on expert assessment, the company could print revenue of $358.17 million, up 3% from the prior year.
Further out to the end of 2024, that’s when a recovery could materialize. Sales may land at over $377 million, representing a 5.3% increase over 2023’s projected results. Also, the high-side estimate for 2024 clocks in at $405 million.
Lastly, the Street’s experts peg shares as a consensus moderate buy with a $3 price target. If REI gets there, that would be a 114% move higher. Therefore, it may be one of the unpopular penny stocks to buy.
Velo3D (VLD)
Source: John Brueske / Shutterstock
Easily one of the least-liked enterprises, Velo3D (NYSE:VLD) is in all kinds of trouble. Since the beginning of the year, VLD stock lost more than 32% of equity value. In the past 52 weeks, it’s down just over 92%. I suppose you could make the argument that in the past month, VLD gained more than 9%. Therefore, sentiment may have stabilized. Still, it’s a risky wager to take.
Further, Velo3D suffers questions about its business. As an additive manufacturing specialist, the company aligns with a burgeoning industry. Per Grand View Research, the space generated a valuation of $20.37 billion last year. Going out to 2030, the sector could expand at a compound annual growth rate of 23.3%. At that time, the industry may be worth $88.28 billion.
However, it’s also true that additive manufacturing companies have suffered severe setbacks. So, caution is necessary. That said, analysts expect 2024 sales to reach $121.29 million, which is a noticeable improvement.
Finally, Lake Street’s Jacob Stephan is the long expert covering VLD in the past three months. The analyst rates shares a “buy” with a $2 price target, implying almost 700% upside potential. Thus, VLD may be one of the unpopular penny stocks to buy.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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