Over the past year or so, Wall Street has been fixated on the major tech companies, driven by AI-led growth. However, valuations for many of these tech giants are bloated, which makes penny stocks all the more attractive.
Penny stock investing can be risky, but picking the right ones can be incredibly lucrative. Investors who pick undervalued gems at the right price could offer life-changing returns. Moreover, with a greater risk appetite in the stock market, it might be an opportune time to wager on some attractive penny stocks to buy. That said, the article covers three carefully selected penny stocks that boast excellent underlying businesses and long-term upside potential.
Arq (ARQ)
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Clean-tech operator Arq (NASDAQ:ARQ) has seen its stock price soar by roughly 100% year-to-date (YTD). Moreover, returns last year were even more impressive at 178%.
Much of the enthusiasm surrounding the stock is linked to its innovative strides in tackling evolving environmental standards, progression toward profitability and improvement of its offerings. The clean-tech player is a leader in producing activated carbon, a critical porous material for purification processes. Moreover, the company is looking to shift towards granular activated carbon (GAC) production, which could prove imperative in line with stricter environmental regulations. GAC is more versatile and efficient in filtration and purification processes than regular activated carbon. Hence, the company’s forward-looking approach could pay many dividends down the road.
Financially, the company is doing remarkably well, coming off back-to-back quarters reporting positive adjusted EBITDA. Moreover, its Q4 EPS of 10 cents beat market estimates by 18 cents. At the same time, revenues of $28.1 million improved 20% year over year, beating forecasts by $1.1 million.
Pitney Bowes (PBI)
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Pitney Bowes(NYSE:PBI) offers a comprehensive solution as a shipping and mailing services provider, covering technology, logistics, financial solutions and more. It presents a compelling investment opportunity due to its diversified business model and impressive customer base, which includes more than 90% of Fortune 500 companies.
Despite operating in relatively testing conditions, it has done remarkably well in holding its own and generating strong results. It beat top-and-bottom-line estimates by considerable margins recently, boosted by robust domestic parcel volumes and a cost-reduction program. Furthermore, its balance sheet shows sizeable cash and equivalents at $601 million, showcasing its financial stability and ability to continue expanding for the foreseeable future. On top of that, it yields an enticing 4.73% while trading at just 0.23 times forward sales estimates, roughly 85% lower than the sector median. Hence, its financial stability and readiness for expansion remain an excellent penny stock to consider.
HIVE Blockchain Technologies (HIVE)
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It’s been a stellar few months for AI or Bitcoin (BTC-USD) businesses. HIVE Blockchain Technologies(NASDAQ:HIVE) has benefitted hugely by playing both fields. The Bitcoin miner continues expanding its fleet while pivoting toward the development of AI applications. This allows Hive to effectively curb its mining business’s downside risks, which had a spotty track record over the years.
Regardless, considering that BTC just surged to $72,000 for the first time, I wouldn’t be worried about Hive’s mining business. The cryptocurrency’s price has been climbing at a steady pace, driven by growing institutional investor interest and broader market acceptance. Moreover, having produced 234.6 BTC in January, the company now holds a handsome 1,939 BTC, valued at $128.79 million. Furthermore, the company is leveraging its mining expertise to pivot towards developing AI applications. HIVE is catering to data-intensive AI and data science tasks by investing in Nvidia (NASDAQ:NVDA) high-performance GPU chips.
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 thatInvestorPlace.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, Muslim Farooque 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.comPublishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
Energy, Industrial, Renewable Energy, Shipping
Penny Stocks
