Top 10 Penny Stocks to Invest in for the Long-Term
Penny stocks are often perceived as speculative stocks due to their price volatility. While such stocks are mostly traded on OTC Markets, some are also traded on recognized stock exchanges like Nasdaq and NYSE. Penny stocks with a strong business model and a fair balance sheet have the potential to become multi-baggers. So, considering their reasonable balance sheet and business model, let’s look at the top 10 penny stocks to invest in for the long term.
July 10, 2023
Tilray Brands, Inc. (TLRY)
The company operating in the legal cannabis sector reported revenue of $145.6 million for Q3 2023, and its cash and short-term investments as of Q3 2023 stood at $408.3 million. Its current market price as of July 3 is $1.69.Financial Metrics
- The market price is trading at a discount to its book value as its price/book (TTM) ratio stands at 0.28.
- The price is currently trading at 1.51x its revenue against the sector median of 4.15x.
Cerus Corporation (CERS)
The California-based Nasdaq-listed multinational biotech company reported revenue of $31 million in Q1 2023 and had $94.7 million in cash and short-term investments. Its forward EV/Sales ratio stands at 2.54, against the sector median of 3.73. Its share is trading at $2.45 as of July 3.
Canaan Inc. (CAN)
The Chinese tech company selling hardware products for bitcoin mining is listed on Nasdaq. Its book value per share (mrq) stands at 3.26, whereas its current market price as of July 3 is $2.29. Thus, it is currently trading at a discount of its book value with a price/book ratio (mrq) of 0.72. Moreover, it is valued at 0.73x its sales with a forward GAAP P/E of 5.78, against the sector median of 25.71, making it one of the top 10 Penny Stocks to invest in for the long term.
American Lithium Corp. (AMLI)
The company operating in the lithium industry is listed on Nasdaq and is currently trading at $2.02. The evolving EV market can drive demand for lithium carbonate. Its price/book ratio stands at 2.94.
Greenlane Holdings, Inc. (GNLN)
The Nasdaq-listed company operating in the cannabis industry recently announced and closed its $4.3 million public offering. Its share is currently trading at $1.01. Its financial ratios, such as price/sales and price/book on a trailing twelve months (ttm) basis, stands at 0.01 and 0.02, respectively.Blue Star Foods Corp (BSFC)
It is an international seafood company involved in importing and distributing under different brand names. It is valued at 0.18x of sales on a ttm basis, and its price/book (mrq) ratio is 6.54.
Arc Document Solutions (ARC)
The company involved in the digital printing business is listed in NYSE. The stock is currently trading at $3.37 with a forward P/E of 11.23 compared to the sector median of 17.46. It is valued at 0.50x of sales on ttm basis, which provides an upside potential. Its forward dividend yield is 5.93%, thus making it one of the top 10 penny stocks to invest in for the long term.Vaalco Energy, Inc. (EGY)
The NYSE-listed company is currently trading at $3.83 with a forward P/E (GAAP) of 5.60 compared to the sector median of 8.86. It is valued at 2.09x EBITDA and 0.86x sales on a ttm basis with a dividend yield of 4.96%, thus making it among the top 10 penny stocks to invest in for the long term.
Opendoor Technologies, Inc. (OPEN)
The home flipping company is listed on Nasdaq. It is currently trading at $4.28 and is valued at 0.2x sales on a ttm basis compared to the sector median of 4.76x. Moreover, its cash balance on the balance sheet (mrq) stands at $1.25 billion with a price/cash flow ratio (ttm) of just 2.07.
Nikola Corporation (NKLA)
The company is engaged in the manufacturing of electric vehicles, energy storage solutions, and fuel-cell semi-trucks. Its revenue for Q1 2023 was $11.1 million, up from $1.9 million YoY. Its current share price is $1.37, with a price/ book ratio (ttm) of 1.49 compared to the sector median of 2.66, thus making it into our list of top 10 penny stocks to invest in for the long term.
FAQs
No, penny stocks are quite risky, and only a few with good business models and growing profitability deliver outsized returns.
Penny stocks involve high risk due to their volatile nature. Hence, you should only invest an amount that you are comfortable losing.
Most penny stocks are illiquid. Hence, you should be careful about your entry and exit, as your trade orders may not be executed at your desired prices.
Most traders speculate on penny stocks due to their cheap prices. However, you must do proper due diligence before investing your hard-earned money in such stocks to avoid losing.
You must analyze the companies, understand their business and study their financials to find out the top 10 penny stocks to invest in for the long term.
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