Penny sleeper stocks can offer tremendous risks to investors. However, much like any other speculative investment category, it’s possible that traders can still generate incredible, perhaps life changing profits.
Let’s start with the pros of penny sleeper stocks. Psychologically, these stocks offer an enticing profile because they feature a “cheap” price. It’s hard to quantify much like the tingles you feel from watching a hypnotic ASMR video is difficult to quantify. However, investors tend to get a certain “high” by owning thousands of shares with only a $100 or so.
Second, penny sleeper stocks can spark incredible returns, as I mentioned. Indeed, some bold bets can produce massive returns.
At the same time, you must be aware of the risks associated with penny sleeper stocks. Not only can they can be unpredictable, but also unreliable and prone to scams. You really go into this sector with the mindset that it’s gambling, pure and simple. If that sounds appealing to you, however, you may want to check out these intriguing penny sleeper stocks to buy (but only after due diligence).
Pilbara Minerals (PILBF)
A mining firm specializing in lithium exploration, Pilbara Minerals (OTCMKTS:PILBF) presents long-term significance because of the underlying electric vehicle (EV) industry. As EVs become increasingly integrated on domestic and global roadways, lithium, as a central commodity will likely rise in demand. Therefore, PILBF is worth a look for those seeking penny sleeper stocks.
Admittedly, it’s not quite a sleeper in terms of market performance. Since the start of this year through the Sept. 28, PILBF gained a blistering 30%. Still, PILBF shed around 4% of equity value in the trailing five days, offering a small discount. On a broader level, because Pilbara is based in Australia, it might not attract as much attention from U.S. investors.
Still, it’s well worth keeping Pilbara on radar. Thanks to various acquisitions, the company expanded its footprint. For the fiscal year ended June 2022, Pilbara generated revenue of $816.8 million, up 550% year-over-year. Additionally, the mining firm’s retained earnings stands at $223 million, which is impressive considering its risky profile.
American Lithium (LIACF)
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A genuine penny sleeper stock to buy in the lithium mining sector is American Lithium (OTCMKTS:LIACF). Headquartered in Vancouver, Canada, American Lithium focuses on projects located in Nevada and Peru.
In south-central Nevada, the company owns the TLC claystone lithium deposit, located near the Tesla’s (NASDAQ:TSLA) Gigafactory in the Silver State. “In south-eastern Peru, American Lithium is developing the advanced-stage Falchani hard rock lithium deposit, as well as one of the world’s largest undeveloped uranium deposits, known as Macusani,” per its website.
While an exciting prospect among penny sleeper stocks because of the relevance to the electrification of mobility, LIACF represents a decidedly risky idea. Since Jan., American Lithium shares plunged more than 56%. Another factor to keep in mind is that the company features a pre-revenue business.
Still, the geopolitical implications of the electric revolution could lift LIACF. It’s just that predictability will be a key headwind.
Uranium Energy (UEC)
Nuclear energy represents a vital cog in national security and stability. Under this framework, mining firm Uranium Energy (NYSEAMERICAN:UEC) could be intriguing for fans of penny sleeper stocks.
Per its website, “UEC is a pure-play uranium company and is advancing the next generation of low-cost, environmentally friendly In-Situ Recovery (ISR) mining uranium projects.” So far this year, UEC stands exactly at parity, with no loss, no gain. Given the red ink in the major equity indices, Uranium Energy is certainly winning.
While the company’s financials don’t bring as much substance to the table as say a blue chip, Uranium Energy posted decent results for its quarter ended April 2022. Producing net income of $7.34 million, it compared favorably to a net loss of $4.59 million in the year-ago period.
Fundamentally, the narrative here concentrates on the relevance of nuclear power. Featuring the same energy potential as 17,000 cubic feet of natural gas, one uranium fuel pellet commands awe striking density.
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Biopharmaceutical company, MannKind (NASDAQ:MNKD) focuses on the discovery, development, and commercialization of therapeutic products for diseases such as diabetes and pulmonary arterial hypertension. One of the company’s key products is Afrezza, an ultra rapid-acting inhaled insulin for diabetes patients.
Though featuring a relevant and compelling business, Wall Street has looked dimly at MNKD stock. Against this year’s Jan. opener, MNKD dropped almost 29%. In the trailing month, shares fell 12%. Overall, economic circumstances such as the Federal Reserve hiking interest rates stymied risk-on assets such as penny sleeper stocks.
Nevertheless, for the ultimate optimist, MannKind could be interesting. For one thing, there’s the total addressable market. According to Grand View Research, the global insulin market could rise from about $20.18 billion in 2022 to $23.20 billion in 2030. This is a sizable sector relative to MannKind’s market capitalization of $779.7 million.
Also, on a longer-term basis, MannKind enjoys solid revenue growth. Still, be aware that in the second quarter of 2022, the company suffered a year-over-year sales loss of 19%.
bioAffinity Technologies (BIAF)
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Speculators may want to consider bioAffinity Technologies (NASDAQ:BIAF). Recently, the biotech firm, which specializes in the development of a platform to detect early stage lung cancer, jumped 60% on the morning hours of Sept. 28.
Ultimately, BIAF closed at $2.92, up nearly 38% against the prior day’s session. Granted, that might not immediately ring as a qualifier for penny sleeper stocks. However, if you want to take a shot, you’re still getting a relative discount.
Fundamentally, bioAffinity enjoys a total addressable market. According to the American Cancer Society, lung cancer represents the leading cause of death associated with the disease. Needless to say, early detection can help foster superior outcomes.
Still, the risk factor is that early detection protocols for lung cancer has been hit and miss. So, market participants should expect a choppy ride before the next swing higher.
Kinross Gold (KGC)
Founded in 1993, Kinross Gold (NYSE:KGC) is a senior gold mining company with a diverse portfolio of mines and projects in the U.S., Canada, Brazil, Chile, and Mauritania. Per its website, Kinross’ main goals are to deliver “value through operational excellence, balance sheet strength, disciplined growth, and responsible mining.”
Against the present monetary framework, KGC admittedly presents an unusually risky narrative among penny sleeper stocks. Earlier this year, the consumer economy struggled against inflation, which resulted in the loss of purchasing power. Now, the Federal Reserve wants to mitigate this dynamic through hiking the interest rate, which creates a countervailing deflationary force. If deflationary pressures continue unabated, the end result wouldn’t be helpful for precious metal prices.
However, it’s also possible that Kinross Gold could benefit from the fear trade. With investors worried about how the global economy may pan out, gold-related investments might make sense. Still, KGC requires strong conviction. Arguably more so than typical penny sleeper stocks.
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An American energy sector firm, Transocean (NYSE:RIG) is the world’s largest offshore drilling contractor based on revenue. The company prides itself in operating in the deepest waters and harshest environments, including North and Sub-Saharan Africa, Australia and Southeast Asia.
Fundamentally, Transocean cynically benefits from downwind geopolitical spillover effects. With Russia cutting off Europe from critical energy commodities, the region faces an energy crisis. As well, global supplies of hydrocarbons have been slashed substantially due to the Kremlin’s military belligerence. With no sign of the conflict abating soon, Transocean could see increased demand as several nations scramble for alternatives.
For Q2 2022, the offshore driller posted solid results. On the top line, Transocean rang up sales of $692 million, up 5.5% from the year-ago period.
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.
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