Written by MarketBeatStaff
February 18, 2021
By the time you read this Vladimir Tenev, the CEO of the trading app Robinhood, will be testifying in front of Congress. The company’s role in the GameStop (NYSE:GME) short squeeze will be called into question.
However, the real issue at stake is the right of traders to buy and sell the equities of their choice. In the case of Robinhood, some traders are buying a lot of penny stocks. While definitions vary, penny stocks are generally considered stocks that are trading for less than $10 per share. These stocks are largely ignored by the investment community.
One reason is that many of these stocks are cheap for a reason. For example, the company may have a business model that is out of date. In other cases, they operate in a very small, niche market that doesn’t drive a lot of revenue.
And most of these stocks are ignored by the investment community. They simply aren’t considered significant enough to spend time debating.
But some penny stocks do have the attention of Wall Street. And they’re being largely ignored by the day trading community. The focus of this special presentation is to direct you to penny stocks that have a story that the “smart money” thinks will eventually be trading at much higher prices.
And that’s why you should be looking at them now.
Quick Links
- New Gold
- RF Industries
- Westwater Resources
- American Battery Metals
- NexTech AR Solutions
- CNS Pharmaceuticals
- ReWalk Robotics
#1 - New Gold (NYSE:NGD)
The first penny stock for you to consider is the junior miner, New Gold (NYSEAMERICAN:NGD). Prior to the pandemic, New Gold was a pure penny stock, meaning it was trading for less than $1 per share. At one point last year, fear and uncertainty drove the stock as high as $2.35 per share. NGD stock has given up about some of those gains, but it’s still trading at a premium over the last 12 months.
Buying gold is always a safety play. NGD stock has been dropping along with cases of the novel coronavirus and inversely to the number of vaccines going in arms. But that’s not the only economic metric there is. As the recent rise in unemployment claims suggests, there is still a lot of damage to repair. Many businesses will need time to build back. And economists are cautioning that stimulus may be necessary, but the bill will come due. All of these are arguments for gold.
There are many ways to invest in precious metals. And mining stocks may not be your preferred way of doing that. However, as a speculative bet on a penny stock, it does offer exposure to a safe-haven asset which, unlike Bitcoin (BTC) has a better track record.
About New Gold
New Gold Inc, an intermediate gold mining company, develops and operates of mineral properties in Canada. It primarily explores for gold, silver, and copper deposits. The company's principal operating properties include 100% interest in the Rainy River mine located in Northwestern Ontario, Canada; and New Afton project situated in South-Central British Columbia.
Read More - Current Price
- $2.51
- Consensus Rating
- Buy
- Ratings Breakdown
- 5 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $3.41 (36.0% Upside)
#2 - RF Industries (NASDAQ:RFIL)
RF Industries (NASDAQ:RFIL) is another penny stock that’s been taking it on the chin lately. The company designs and manufactures a range of products including RF connectors, coaxial cables, fiber optic cables, energy-efficient cooling systems, and integrated small cell enclosures.
It may not sound like an exciting business. However, the company does business in sectors such as aerospace/defense, data centers, transportation and utilities, public safety, and the oil & gas industry.
Just the data center component alone is worth your attention. The demand for more, and larger, data centers is only expected to increase. And the company will have a role to play as our nation continues to build out its 5G infrastructure. RF Industries has contracts with most of the major carriers.
RIFL stock is making its third attempt to reclaim its 52-week high. If it’s successful, this is one stock that may not be a penny stock for much longer.
About RF Industries
RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Italy, Mexico, and internationally. The company operates through two segments, RF Connector and Cable Assembly, and Custom Cabling Manufacturing and Assembly.
Read More - Current Price
- $3.66
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $4.50 (23.0% Upside)
#3 - Westwater Resources (NASDAQ:WWR)
Aside from the pandemic, 2020 will be remembered as the year of the electric vehicle (EV) bubble. That bubble hasn’t burst yet, but some investors are approaching it with renewed caution. But just like lithium stocks, a safer way to invest in electric vehicles is by looking at companies that will be providing the raw materials.
In the case of Westwater Resources (NASDAQ:WWR) that material is graphite. Currently, Westwater is the only U.S. company that can provide a domestically sourced and processed battery-grade source of graphite giving it a gigantic first-mover advantage in a field that is hard for competitors to enter.
And one look at the company’s stock chart shows that investors agree. In early February, WWR stock moved out of the penny stock range. It’s back around $7 now which may be somewhat based on year-end results which came in worse than expected. But even with some penny stocks you have to play the long game and that makes WWR stock worth a look.
About Westwater Resources
Westwater Resources, Inc operates as an energy technology company, focuses on developing battery-grade natural graphite materials. The company holds interests in Kellyton Graphite Plant located in Kellyton, Alabama; and Bama Mine Project situated in south Alabama. It holds interests in Coosa graphite project located in Coosa County, Alabama.
Read More - Current Price
- $0.53
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#4 - American Battery Metals (OTCMKTS:ABML)
Another backdoor way to play the EV sector is with American Battery Metals (OTCMKTS:ABML). ABML stock is already up about 100% for the year and the case for the stock is simple enough. At some point, if we’re all going to be driving around in electric cars, we’re going to need somewhere to dispose of our batteries. Otherwise, the net effect on the environment will be diminished.
That’s where American Battery Metals comes in. They are a company that is part of the battery recycling market. According to the company’s website the company is “engaged in lithium-ion battery recycling, battery metals and material extraction, and resource production. We are a leading US-based battery metals company producing low-cost battery metals with a sustainable commitment to closed-loop, clean energy technologies.”
The last part of that sentence, about closed-loop, clean energy technologies represents both the risk and the reward. If the company can develop such a process, the stock may rocket higher. All penny stocks contain risk, but you have to be particularly careful with ABML stock because the rise in stock price has come exclusively since the end of the year. Momentum plays in penny stocks carry significant risk.
About American Battery Technology
American Battery Technology Company, a battery materials company, engages in supplying battery metals. The company explores for resources of battery metals; and develops and commercializes technologies for the extraction of battery metals, as well as commercializes integrated process for the recycling of lithium-ion batteries.
Read More - Current Price
- $9.83
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#5 - NexTech AR Solutions (OTCMKTS:NEXCF)
If you’re interested in a penny stock with a technology focus, consider NexTech AR Solutions (OTCMKTS:NEXCF). Augmented reality has gone mainstream. But if you’re not paying attention you make that AR is just about lawyers being able to put a cat filter over their face on a video call. The reality is much more compelling. AR is becoming a key feature for e-commerce retailers by allowing shoppers to get a more accurate “picture” of how an item will look on them or in their space.
But one of the company’s most innovative, and topical solutions is in virtual education. Even with a push to get kids back in classrooms, there is a feeling that virtual education will have a place at the table going forward. The global EdTech market, which was valued at $76.4 billion in 2019 is projected to grow at a compound annual growth rate of 18.1% through 2027.
Furthermore, the company counts Microsoft (NASDAQ:MSFT) as one of its partners. In fact, Microsoft has invited NexTech to present its virtual education solutions at the company’s Global Education Partner Summit.
About Nextech3D.AI
Nextech3D.AI Corporation provides augmented reality technologies, wayfinding technologies, and 3D model services. It focuses on creating 3D WebAR photorealistic models for the prime ecommerce marketplace, as well as other online retailers. The company was formerly known as NexTech AR Solutions Corp. and changed its name to Nextech3D.AI Corporation in September 2023.
Read More - Current Price
- $0.03
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $0.25 (725.1% Upside)
#6 - CNS Pharmaceuticals (NASDAQ:CNSP)
Biotechnology companies are frequently on a list of penny stocks. The simple reason is that many of these companies are a moonshot. If they are able to bring a drug to market, the stock could soar. If they don’t, the company will generally have to keep reissuing shares to stay afloat.
Investors saw this play out during the race for a Covid-19 vaccine and therapeutic treatments. There were many companies whose stocks went up when they announced it had a candidate, but many of those companies have long been forgotten.
This brings me to CNS Pharmaceuticals (NASDAQ:CNSP). The company is developing therapeutic treatments for brain cancer. Its lead candidate, Berubicin, which is used to treat glioblastoma multiforme has advanced out of Phase 1 trials. The company has a worldwide exclusive license on Berubicin.
The risk is that the drug will not fare well in advanced trials. However, the stock is up nearly 100% in 2021 as biotech investors are shifting their attention away from the novel coronavirus.
About CNS Pharmaceuticals
CNS Pharmaceuticals, Inc, a clinical pharmaceutical company, engages in the development of anti-cancer drug candidates for the treatment of brain and central nervous system tumors. The company's lead drug candidate is Berubicin, which completed Phase I clinical trial that is used for the treatment of glioblastoma multiforme.
Read More - Current Price
- $0.11
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $0.50 (363.0% Upside)
#7 - ReWalk Robotics (NASDAQ:RWLK)
The last company on our list is a penny stock in the medical devices sector. ReWalk Robotics (NASDAQ:RWLK)develops robotic exoskeletons for patients who have mobility impairments. Initially, you might think this is a company that provides solutions for paraplegics and other spinal cord injuries. You’d be right. In fact, the company’s ReWalk Personal exoskeleton system is being evaluated by the U.S. Department of Veteran Affairs (VA) for use with all qualifying veterans.
But that’s not a complete description. The company also has products such as its ReStore exo-suit that is designed to help stroke patients regain control of their gait. Approximately 795,000 people suffer a stroke every year making it the leading cause of serious, long-term disability in the United States...
The company is not yet profitable, but the trend is moving in the right direction. In the last 12 months, the stock has soared nearly 250%. That suggests it could be ready for a pullback which could be an attractive setup for speculative investors.
About ReWalk Robotics
ReWalk Robotics Ltd., a medical device company, designs, develops, and commercializes robotic exoskeletons for individuals with mobility impairments or other medical conditions in the United States, Europe, the Asia-Pacific, and Africa. The company offers ReWalk Personal and ReWalk Rehabilitation for spinal cord injuries and everyday use by paraplegic individuals at home and in communities; ReStore, a soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke in the clinical rehabilitation environment; and MyoCycle and MediTouch tutor movement biofeedback devices for use at home or in clinic.
Read More - Current Price
- $0.00
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
Investing in penny stocks carries a significant amount of risk. Investors should not be carrying a significant position in any of the stocks listed in this presentation or any other penny stock for that matter. You may not find many of these stocks being heavily traded on Robinhood, but that could actually be a good thing.
That’s because investing in penny stocks can be rewarding. But like any investment, it requires you to do your due diligence. Many penny stocks are not profitable. In which case you need to find an underlying, long-term narrative or short-term catalyst that is likely to improve the company’s fortunes. This presentation has attempted to give you a reason to speculate on each of these stocks.
The other thing we’ve tried to do is give you business models that are easy to understand. A frequent mistake of penny stock investors is to chase a low price. But if the business doesn’t make sense to you, it can be hard to know when to close your position.
More Investing Slideshows:
