In some ways, the stock market is a form of legalized gambling. Although today we have an astounding array of research tools, ultimately, it boils down to a simple decision: buy or sell? And while many people object to the gambling analogy, with over-the-counter names, the comparison sticks. That’s especially true for these penny stocks to buy.
Before we get into the fun stuff, let me reiterate this point once again: penny stocks to buy, no matter how enticing, are incredibly risky ventures. While many resources exist that purport to predict the “next big move,” this sector is truly a guessing game. What you’re hoping for is a major news announcement that sends shares flying.
Another risk factor to consider is the time element. These lesser-known, less-capitalized companies will often experience a burst of buying power, and then quickly fade. Therefore, you must get in before the wave, and get out once the wave crescendos; otherwise, you may gain nothing or even lose out from an ensuing panic. And that’s why this list is called “penny stocks to buy now,” not “penny stocks to sit on for five years.”
That said, one of the compelling reasons to engage the other side of the tracks is the diamond-in-the-rough effect: you never know which one of these companies could become the next Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) or Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Of course, the chances are incredibly slim, but the possibility remains.
So if you’re one of those intrepid investors, here are seven penny stocks to buy now:
Seemingly, everybody loves electric vehicles. I’m not going to lie: I used to be one of them. But after digging into the realities of EV ownership, I discovered multiple problems.
The biggest one is that our infrastructure is likely not ready for mass-scale EV adoption. However, the concept of alternative fuels still intrigues me, which brings me to Gevo (NASDAQ:GEVO) and GEVO stock.
In my opinion, Gevo does alternative energy correctly. Rather than bringing in an entirely new platform, they’re going through the traditional chemical route, but with a twist. For example, one of their products in development is renewable gasoline that doesn’t emit carbon deposits.
If successfully brought to fruition, renewable gasoline can be more easily incorporated into our existing infrastructure. Thus, GEVO stock has explosive potential, which is why it belongs on this list of penny stocks to buy.
That said, GEVO stock isn’t without risk. First, its historical price chart looks like a European luxury sedan’s deprecation curve on crack. Second, the current market environment is deflationary for traditional energy sources. Thus, Gevo’s products are a hard sell when regular gasoline is relatively cheap.
Dean Foods (DF)
Among my ideas for penny stocks to buy now, I’d say that Dean Foods (NYSE:DF) is my most creative. In many cases, food and beverage-related companies represent safe picks due to their secular demand. No matter what happens to the economy, people have to eat (and drink). However, that sentiment hasn’t supported DF stock at all.
Easily, this is one of the worst-performing names on the New York Stock Exchange. Moreover, no analyst would recommend DF stock to any conservative investor. The financials are simply terrible. Although the company is the dominant leader in the dairy industry, milk sales have declined substantially. Exacerbating this trend is the fact that plant-based alternatives are stealing market share.
Thus, I wouldn’t recommend anyone risk anything other than stupid gambling money on DF stock. But if you’re lucky enough to have such funds, you may want to give a contrarian eye to Dean Foods. For one thing, not all plant-based milk products are universally healthy. Due to differences in nutritional content and refining processes, regular milk might be the better call.
Second, we might have a recession. If so, consumers will become cost-conscious. That means a return to regular milk, and possibly a lift in DF stock.
Obalon Therapeutics (OBLN)
Source: MilitaryHealth via Flickr
I’m going to bring up an indelicate topic that everyone knows: Americans have a love affair with food. By itself, that isn’t a problem. But because we apparently cannot control ourselves well, our passion has turned into an epidemic. According to the Institute for Health Metrics and Evaluation, approximately 160 million Americans are either obese or overweight. Frankly, this staggering statistic provides the bull case for Obalon Therapeutics (NASDAQ:OBLN) and OBLN stock.
Usually, we see two kinds of solutions for weight loss: natural and surgical. Presumably, the former is what most people want (i.e., diet and regular exercise) but the commitment is lacking. The latter approach works, but understandably, most folks are hesitant to go under the knife. Obalon Therapeutics provides a non-surgical procedure that gets results, providing a middle ground. It’s also what makes OBLN stock compelling.
According to the company website, Obalon developed the first and only swallowable balloon system. Essentially, this mechanism artificially takes up space in your stomach, making you feel fuller faster. Therefore, you don’t end up overeating.
But like any medical-related company, OBLN stock is heavily dependent on clinical and efficacy trials. Therefore, like most other penny stocks to buy now, it’s an incredibly volatile investment, and only suitable for the gambler.
Before I get into my discussion for VivoPower (NASDAQ:VVPR), you should know I’m not a big fan of solar energy. Despite the industry’s marketing strategies about the sun’s free energy source, nothing is really free. First, the solar panels themselves cost significant amounts of money. Second, in order to actualize this energy, you must have the space to install the bulky, unwieldy things. So why mention VVPR stock at all?
Although I don’t care for solar personally, I must concede a few facts. One of the biggest is that the cost of solar equipment has dropped significantly. Based on this trend, the economic viability for solar and by logical deduction, VVPR stock increases.
Another factor revolves around geopolitical sentiment. Progressively, nations are concerned about pollutants and their effect on the climate. Despite its shortcomings, solar enjoys remarkable consensus. That’s a strong base from which VVPR stock can jump from.
However, I’d still exercise extreme caution. Simply put, VVPR stock is all over the map. But I can’t help noticing that shares are currently baselining. One good pop could change everything. Therefore, don’t ignore VVPR from your list of penny stocks to buy now.
Avino Silver & Gold Mines (ASM)
Invariably, many if not most articles about penny stocks to buy now feature precious metal mining companies. Perhaps these names awaken our intrepid nature from a time when people put everything on the line for a mine. Unfortunately, this sector has been a devastating loser until recently. And that’s why I’m mentioning Avino Silver & Gold Mines (NYSEAMERICAN:ASM).
The investment thesis here is very simple. Due to growing fears of a global economic slowdown, many people are rushing into safe-haven assets. Thus, we have witnessed a tremendous spike in gold and silver bullion prices. Moreover, the Federal Reserve recently cut benchmark interest rates, a first since the 2008 crisis. We might even see more cuts due to pressure from the Trump administration, which bolsters the argument for ASM stock.
Of course, I don’t want readers to jump into ASM stock without considering the risks. Compared to top-tier mining companies, Avino’s financials are wretched. Therefore, sustainability is a serious concern.
However, with gold and silver prices likely to rise much higher from here, ASM stock has industry-wide tailwinds. Certainly, then, it qualifies as a candidate for penny stocks to buy now.
Medmen Enterprises (MMNFF)
To no one’s surprise, the marijuana industry provides many options for penny stocks to buy now. For me, a standout in this crowd is Medmen Enterprises (OTCMKTS:MMNFF). Working in the retail front, Medmen specializes in premium-quality marijuana products. Moreover, they have 19 licensed cannabis growing facilities throughout the U.S. employing a total of 1,100 employees.
It’s this last statistic that gives me particular confidence toward MMNFF stock. Clearly, President Donald Trump is worried about a possible economic downturn impacting his reelection chances. Therefore, he’s urging the Fed to lower interest rates more than they have. But another avenue he may want to pursue is full marijuana legalization. That would accelerate the job growth already witnessed in this sector. In turn, we’d see a jump in MMNFF stock and other marijuana-related penny stocks to buy now.
However, such a scenario may take a long time to pan out. Also, Wall Street has started to punish marijuana companies for producing poor earnings results. Unfortunately, the fallout in this market has taken its toll on MMNFF stock. Still, one good news item could bring back this name from the doldrums.
Barnes & Noble Education (BNED)
In theory, Barnes & Noble Education (NYSE:BNED) has a compelling business model. The company provides education solutions for two client categories: academic institutions and college students. For the former, Barnes & Noble provides comprehensive services to broadly improve student performance while maximizing revenues. With the latter, the company offers study tools and tutoring networks. Yet despite these selling points, BNED stock has been a loser almost from day one.
If I may be blunt, institutions of higher education don’t really need help “maximizing revenues.” They already do a brilliant job siphoning funds from students and their parents. And with all the financial fleecing going on, students don’t have money to pay for extra tools or guides. Add on top of this their money-losing ways, and BNED stock no longer looks attractive.
So why mention this company on my list of penny stocks to buy? At this point, I’m completely speculating on BNED stock as a takeover target. Despite the terrible things I just said, college remains a must-achieve goal for current high school students. Plus, the company levers the powerful Barnes & Noble brand. It’s crazy risky, but it’s worth a bet with your stupid money.
As of this writing, Josh Enomoto is long gold and silver bullion.
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