Table of Contents
Table of Contents
Best Value Penny Stocks
Fastest Growing Penny Stocks
Penny Stocks With the Most Momentum
Advantages of Investing in Penny Stocks
Risks of Investing in Penny Stocks
- Markets News
FLJ Group, Inhibikase Therapeutics, and Myomo are the top stocks for value, growth, and momentum, respectively
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Penny stocks are characterized by their low price (under $5 per share), high volatility, and potential for significant gains. While they can offer great rewards, they have higher risks because of their lower market capitalization and the more limited information investors have on them. Penny stocks are typically for smaller or emerging companies. They are considered potential diamonds in the rough that requires due diligence and a careful approach, given their sudden price fluctuations and the fact that many turn out worthless.
This month's top penny stocks include Myomo Inc., Expion360 Inc., and Akebia Therapeutics Inc., all of which have more than tripled in value during the past year. Here are the top three penny stocks with the best value, the fastest growth, and the most momentum. All data is as of Nov. 24, 2023.
Best Value Penny Stocks
These are the penny stocks with the lowest 12-month trailingprice-to-earnings (P/E)ratio. A low P/E ratio indicates you're paying less for each dollar of profit that could be returned to you in the form of dividends or buybacks.
| Best Value Penny Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing P/E Ratio | |
| FLJ Group Ltd. (FLJ) | 0.18 | 1,8000 | 0.4 |
| Imperial Petroleum Inc. (IMPP) | 1.61 | 27 | 0.4 |
| Performance Shipping Inc. (PSHG) | 2.26 | 27 | 0.5 |
Source:TradingView
- FLJ Group Ltd.: This is a China-based real estate company that leases apartments, typically on a long-term basis, and offers utility services to tenants. On Nov. 23, FLJ said it would acquire Alpha Mind Technology Ltd., an insurance provider, for about $180 million. Following the news, the share price rose 45%.
- Imperial Petroleum Inc.:Based in Greece, Imperial Petroleum transports by sea crude oil products, dry bulk materials, iron ore, coal, grain, and fertilizer.
- Performance Shipping Inc.:This is a seaborne transportation company in Greece with a fleet of eight tankers.
Fastest Growing Penny Stocks
These are the top penny stocks ranked by agrowthmodel that scores companies based on a 50/50 weighting of their year-over-yearrevenueand earnings-per-share (EPS) growth in the most recent quarter.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax laws or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest Growing Penny Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($M) | EPS Growth (%) | Revenue Growth (%) | |
| Inhibikase Therapeutics Inc.(IKT) | 0.87 | 5.4 | 20 | 991 |
| PAVmed Inc.(PAVM) | 0.22 | 26.3 | 46 | 941 |
| Lucid Diagnostics Inc.(LUCD) | 1.31 | 58.5 | 14 | 930 |
Source:TradingView
- Inhibikase Therapeutics Inc.: A biotech company that develops pharmaceuticals to help treat Parkison's disease, its flagship product is IkT-148009. It is a small molecule Abelson tyrosine kinase inhibitor, which is still being tested in a clinical trial.
- PAVmed Inc.: This is a healthcare equipment provider that concentrates on single-use, minimally invasive surgical equipment. On Nov. 14, the company released its report on earnings for the third quarter that said total revenue surged 10-fold while net income fell 27%.
- Lucid Diagnostics Inc.: This is a medical diagnostics company that focuses on patients at risk of developing esophageal cancer. They are a subsidiary of PAVmed Inc.
Penny Stocks With the Most Momentum
These are the penny stocks that had the highest total return over the past 12 months.
| Penny Stocks With the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing Total Return (%) | |
| Myomo Inc. (MYO) | 3.22 | 85 | 434 |
| Expion360 Inc. (XPON) | 4.03 | 28 | 290 |
| Akebia Therapeutics Inc.(AKBA) | 1.00 | 188 | 285 |
| Russell 1000 Index | N/A | N/A | 10 |
| Russell 2000 Index | N/A | N/A | 5 |
Source:TradingView
- Myomo Inc.: A medical robotics company, Myomo develops orthotics for patients with neuromuscular disorders. Its products include a wearable upper limb brace that assists individuals lacking mobility. Myomo has had substantial growth this year after Medicare said it would cover its flagship product, the MyoPro brace.
- Expion360 Inc.:An electrical equipment company, Expion360 makes lithium iron phosphate batteries for recreational vehicles. The company also makes battery charging systems and home energy storage products.
- Akebia Therapeutics Inc.:A pharmaceutical company that produces therapies for individuals with kidney diseases who are both dialysis and non-dialysis dependent.
Advantages of Investing in Penny Stocks
Potential for high returns: Most penny stocks have tiny market capitalizations, so it takes a small amount of money to move their share prices substantially. Hence, positive news, such as signing on a major customer or forming a new strategic alliance, can lead to sizable returns before the mainstream investing world even discovers the stock. Conversely, negative news can lead to significant losses.
Leverage: Penny stocks attract investors with a small amount of trading capital since their lower share prices allow them to buy thousands of shares. For example, an investor with $500 can buy 2,000 shares of a penny stock trading at 25 cents. If the stock doubles in a month, the investor earns a quick 100% return. Yet, with the same starting capital, the investor can afford only a small number of shares in most S&P 500 stocks, making it almost impossible to achieve those gains over the same period.
Risks of Investing in Penny Stocks
Low liquidity: Penny stocks often trade on thin volume, meaning it can be difficult to enter and exit positions. Moreover, these stocks typically have a wide spread between the bid and ask, which increases trading costs. For example, if a penny stock has a bid price of $1.00 and an ask price of $1.50, a trader wanting to buy at market gets caught paying a 50 cent per share premium. Thus, investors should use limit orders to minimize trading costs when buying and selling penny stocks.
Extreme valuations: Penny stocks that start moving rapidly higher in price show up on stock screeners and may even get media attention. This often attracts more speculators who push prices up even higher, leading to unsustainable valuations. For instance, during the dot-com bubble in the late 1990s, many penny technology stocks doubled and tripled in price despite not generating any earnings. However, when the market turned bearish a few years later, many Nasdaq-listed penny stocks with unsustainable valuations fell substantially or were delisted.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read ourwarranty and liability disclaimerfor more info.
As of the date this article was written, the author does not own any of the above stocks.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
Globenewswire. "FLJ Group Limited Entered into a Definitive Agreement to Acquire Alpha Mind Technology Limited."
Securities and Exchange Commission. "PAVmed Provides Business Update and Third Quarter Financial Results."
Yahoo! Finance. "Myomo Announces that CMS has Classified the MyoPro Orthosis Under the Brace Benefit Category."
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