Investors are looking for new methods to benefit from penny stocks now that June has gotten off to an exciting start. When it comes to penny stocks, we know that they may be volatile. But, with the correct penny stocks trading method, you can take advantage of this volatility to earn money. Multiple forces are at work in the stock market right now, including growing prices, mounting interest rates, geopolitical turmoil, and more.
All of this has generated a turbulent stock market. But, as we know, with volatility comes opportunity if it is taken advantage of appropriately. It would help if you had a plan before you begin investing in penny stocks, whether you're a novice or a seasoned investor. Finding the most excellent penny stocks to buy, buying them at the right time, and selling them at the right time are all aspects of a penny stock trading strategy. Adopting a penny stocks trading strategy may limit your risk and increase your gains.
There are a few factors to consider while building a penny stocks trading strategy. The first step is to identify volatile penny stocks. Volatile penny stocks are more likely to make massive changes, which means they have the potential to earn more gains.
However, volatile penny stocks are also more dangerous, so it's crucial to find the correct mix of risk and return when designing your penny stocks trading plan. So, while there is no one surefire penny stocks trading technique, there are a few things you can do to boost your chances of success. With this in mind, let's look at the best penny stocks 2022.
What Are Penny Stocks?
Penny stocks are shares of tiny firms that often trade for substantially less money than shares of more prominent corporations. The phrase "penny share" can refer to any stock valued at less than $5, notwithstanding its name. A penny stock could be sold on an over-the-counter (OTC) market, but many are also sold on SEC-regulated platforms like the New York Stock Exchange (NYSE) (NYSE).
Penny stocks have long been prone to fraud and artificial price inflation due to their ease of manipulation. Concerning penny stock fraud, "pump and dump" schemes are prevalent. During a pump and dump, marketers who have shares of specific security purposefully circulate incorrect or misleading information about the firm producing the stock, which causes the stock price to increase significantly. After the stock price has risen, the owners "dump" their shares to others interested in purchasing them after hearing about the increase.
The rising use of social media websites like Twitter and Facebook has increased incidences of the pump and dump schemes, especially when penny stock news enters the marketplace. It's now more crucial than ever for investors to complete their due research before making a purchase. You can identify penny companies to monitor, even if you aren't persuaded they're an intelligent investment yet.
Penny stocks are also intriguing to investors because they demonstrate higher-than-average volatility. The volatility of a stock specifies how often and by what magnitude a store may increase or fall in value over a typical trading day. For example, the finest penny stock under 10 cents might grow, but it could also collapse. You're taking a risk, but the benefits are great.
High volatility indicates that there is much potential for profit when buying and selling penny stocks. For example, if you acquire 1,000 shares of Stock X at $1 and sell them for $2, you've doubled your money and gained $1,000. As a result of this high level of volatility, investors run the risk of losing money rapidly. If you're looking for penny stocks to purchase immediately, you may have to keep an eye on your account and sell as fast as you buy.
10 Best Penny Stocks to Consider
1. Lucky Block (LBLOCK)
When it comes to penny stocks, we think Lucky Block is the best option right now. Lucky Block is not a penny stock but rather a cryptocurrency with extraordinary development potential owing to its creative application scenarios. Due to this, the currency might be a perfect addition to your equities portfolio to enhance its degree of diversity.
Put. Lucky Block is a crypto gaming platform based on the Binance Smart Chain (BSC) that harnesses blockchain technology to create a fairer and more transparent gaming experience. This experience is enhanced by using LBLOCK - Lucky Block's native token. LBLOCK plays a significant part in the Lucky Block ecosystem, used to purchase lottery tickets and for prize distribution.
According to the Lucky Block whitepaper, LBLOCK token owners will earn an annual return of over 19 percent only by hanging onto their tokens. These reasons caused the price of LBLOCK to jump by almost 3,000 percent when it appeared on PancakeSwap earlier this year, hitting an all-time high of $0.009617. But the cost of LBLOCK has now fallen to $0.001950, which is around five times lower than its February highs.
Final result: Lucky Block may be purchased at a significant discount. Various changes are planned for the near future, such as new centralized exchange listings and a FIAT ramp so that investors may use conventional currencies to acquire LBLOCK.
Lucky Block's iOS app is also now undergoing evaluation by Apple, ahead of the launch of Lucky Block's first crypto game. Last but not least, with Lucky Block's Telegram channel currently having over 55,000 members, the buzz around these enhancements is already rising, pointing to additional positive momentum shortly.
2. DeFi Coin (DEFC)
Another good asset to explore if you're seeking considerable profit potential is DeFi Coin. Like Lucky Block before it, DeFi Coin is not a publicly-traded company; instead, it is a decentralized finance (DeFi) currency native to the brand new DeFi Swap market.
Within this exchange, individuals may swap, stake, and farm in an entirely decentralized manner. DEFC plays a critical part in the DeFi Swap ecosystem, and hence its value is tightly connected to the exchange's development. DeFi Swap ultimately went live in early May after some development delays, and DEFC investors saw returns in the triple digits.
The development team behind DeFi Coin has incorporated a unique transaction fee of 10 percent on buy and sell orders, which incentivizes investors to hold long-term. Five percent of the collected tax amount is returned to DEFC holders via regular income payments — establishing a road to earning passive income.
In addition, all of the developer's coins have been burnt in the DeFi Coin project. This shows that the crew isn't in it for the money but for the enterprise's long-term success.
Finally, DeFi Coin also features a built-in manual burning system. The management team and community will decide when is the optimum moment to burn a set quantity of tokens. Demand for DEFC rises as a result since supply is constrained, which drives up the price. This quality, along with DeFi Coin's numerous use cases and the excitement from the project's Telegram channel, suggests the future is incredibly bright for this project.
3. Smith Micro Software, Inc. (SMSI)
To help parents keep tabs on their children's whereabouts and online activities, Smith Micro Software (SMSI) offers the SafePath app, developed by SMSI, a mobile family safety software pioneer.
The market appears to be disregarding all of the firm's future potential at present. Only at its operational losses and not paying attention to the fact that EPS is predicted to increase 200 percent next year, the company has zero debt, and its gross margin is close to 80 percent.
While carrier migrations to SafePath are only scheduled to be completed by the first quarter of 2023, patient investors interested in long-term trading may find Smith Micro Software stock to be an appealing value offer.
4. Red Cat Holdings, Inc. (RCAT)
Red Cat Holdings, Inc. (RCAT) is a holding company that has obtained several drone-related firms but has seen a positive trend lately in the form of deals with the U.S. Army (for a drone prototype) and the American Customs & Border Protection agency, and order for Golden Eagle drone units from an unidentified NATO member country.
The global market for drones is predicted to expand to $63 billion by 2025 from $4.4 billion in 2019, so even if Red Cat were only able to acquire a small market share, it might see its profits soar over the following few years.
A forward P/E ratio of 6.15x five-year revenue growth of 278 percent on average. Triple-digit projected earnings per share growth next year and a growth rate of 86% quarter-over-quarter in earnings per share suggest that the stock is currently undervalued and long overdue for a bullish trend reversal.
5. Inpixon (INPX)
From its H.Q. in Palo Alton, Inpixon delivers location-based services and big data analytics to a worldwide customer base. It supplies various sensor solutions that allow clients to improve interior areas with Wi-Fi and Bluetooth. The corporation has a market value of roughly $37m, with 220 workers under the direction of CEO Nadir Ali.
The stock of INPX has had a challenging year. In 12 months, the price has decreased by approximately 80 percent, from over $1.20 to its present low of $.024. So why invest? Well, many write off Inpixion as a trash stock. But having dropped so much, the price is low where Inpixon could be worth a minor investment as part of a balanced portfolio. It will not take much price movement to reap significant proportionate profits for the investor. Therefore, it may be one of the finest stocks under $5.
Critically, some critical factors show that Inpixon is undervalued. Over four years, revenues have climbed from $3m to $16m. Revenues at INPX increased by 15% in the fourth quarter of 2021. And analysts WallStreenZen make no bones about it: based on Discounted Cash Flow modeling, 'INPX ($0.24) is considerably undervalued by 65 percent relative to our estimate of its Fair Value price of $0.69.'
Inpixon may be one of the most excellent penny stocks to purchase now due to its low price and expanding revenue. Over 71,000 people follow the company on eToro.
6. DiDi Global Inc. (NYSE: DIDI)
During trading on June 6th, shares of DIDI stock managed to soar up by more than 24 percent. This is a significant increase for the corporation following a decrease of over 80% during the previous year.
And DIDI stock has undergone a substantial positive turnaround in the last month. This has increased by almost 45 percent. So, why are shares of DIDI stock flying up right now? However, China's announcement that it will stop its investigation into the corporation was its most significant development today. Investors have been terrified of this for some time, and rightfully so. And now that it has an end in sight, investors are thrilled about what the future of DIDI stock may contain.
Aside from forfeiting 1% of its outstanding stock, DIDI is also expected to pay a substantial cash penalty, enabling increased control of the corporation from the Chinese government. Even while the sentences aren't perfect, the fact that the investigation is completed is a good indication for investors.
7. Sunworks Inc. (SUNW)
Based out of Roseville, California, Sunworks is active in the burgeoning solar power business. The company provides solar systems to industrial and agricultural enterprises in the region.
Sunworks employs approximately 500 workers and has a market capitalization of $66.5m; this is a high ratio of personnel-to-market cap and shows that a restructure may be one of several methods to increase firm profitability.
Between 2020 and 2021, Sunworks sales climbed by more than 150%, from $37.9 million to $101 million. That hasn't stopped the stock from falling steadily since it peaked at nearly $25 in January 2021. Since the third week of February 2022, the price has held above the $2 barrier, recovering quickly from a low of $1.72 on 24th March. The current fee for one Sunworks share is $2.24.
As a result, Sunworks may now rest easy knowing that the California Public Utilities Commission (CPUC) has decided to postpone NEM 3.0, a potentially fatal decision. With NEM, solar consumers would have had to pay additional costs and lost credit for any extra solar production.
Ultimately, investing in Sun work constitutes a chance on a tiny solar energy firm that may not boast the most proper management or financial performance. But this is a volatile company with high short-term potential; on the 8th of March this year, the stock price rose to above $5 during market hours, plummeting to $3.76 by close of business. Buy now for a short-term punt at $2.24 and maybe benefit from future good news in the solar energy sector.
8. Gingko Bioworks Holdings Inc. (NYSE: DNA)
With nearly 16 percent in gains on June 2nd, DNA is a penny stock that is particularly popular with investors now. In the previous five-day period, we've experienced double-digit upticks with DNA, indicating its increasing potential. In the last six months, DNA stock has declined by nearly 59 percent. Buying DNA stock today may have this as one of its primary motivations.
It is not uncommon for stocks to rise sharply following a significant decline. Traders try to locate value in beaten-down equities, which is what happens. Gingko Bioworks will be speaking at William Blair's 42nd Annual Growth Stock Conference with the newest information.
DNA, on the other hand, has been relatively quiet. It's worth mentioning that news indicated legendary investor Cathie Woods acquired almost 4 million shares of the firm. In light of this, are you planning to keep an eye out for DNA this year?
9. Globalstar (GSAT)
Founded in 2003 and based out of Covington, Louisiana, Globalstar is a U.S. satellite communications firm. Nearly 775,000 people in the energy, forestry, and public safety industries rely on the company's satellite and ground station network.
Globalstar has a market capitalization of $2.5 billion, which is very high for a penny stock, and has a decent price/earnings ratio of 11.5. Quarterly sales climbed by about 6 percent in Q4 2021 to $34.48, and net income increased by 22 percent. We may thus classify this penny stock as an established firm undergoing dire circumstances rather than a startup with an unclear future.
Globalstar, on the other hand, is in great danger, recording net income shortfalls of over $100 million in 2020 and 2021. Prices for GSAT dropped as low as $0.92 on February 24th, 2022. As a result, on March 29th, the stock price rose to $1.52 per share, which has now dropped back to a current level of $1.33.
The fact that the price bounced twice after hitting $0.92 on January 24th and February 24th is promising from a technical charting perspective. After a steady drop during Q3 and Q4 2021, the price has so steadied and began to go up.
10. Zynerba Pharmaceuticals Inc. (ZYNE)
Zynerba is a cannabis-focused business with U.S. headquarters in Pennsylvania. The company only services the U.S. healthcare sector. Zynerba develops formulations that are applied directly to patients' skin and give pain relief to those suffering from uncommon disorders. For example, Zynerba has created an experimental medication called Zygel, a patent-protected gel containing pain-relieving cannabis.
Despite a significant early interest in cannabis equities from the markets, the continuing challenge for all cannabis-related firms in the U.S. is that cannabis remains illegal at a federal level. This year's Senate decisions may (or may not) alter this.
Zynerba has been under development since last year. As a result, 2018-2021 saw no revenue and severe net income deficits. This is standard procedure for a business involved in the creation of new products in an unfamiliar industry.
Zynerba stock is now valued at $1.84 per share. You'd be let down today if you bought during the second quarter (when the price soared to $15.50 on July 8th, 2019). But perhaps there is hope for an upswing for the rest of us?
Should You Invest in Penny Stocks?
Making a profit by buying and selling penny stocks may be a thrilling experience. With a wide range of industry alternatives, more volatility, and hundreds of stocks under $20, it's easy to see why so many investors are lured to the prospects that penny stocks bring. In addition, keep in mind that penny stocks have a high level of risk, and they shouldn't make up the majority of your investment portfolio.
Try to avoid believing the myth that I.T. giants such as Apple and Microsoft were previously considered "penny stocks." That is not true. The Microsoft IPO was priced at $21.00 — in 1986. Investing in penny stocks is risky, so stick with tried-and-true funds like total market and index funds. This will offer you opportunities for growth while also preserving your future.
Please don't be scared to invest in a few quality penny companies and hope they improve in value. Monitor these stocks attentively so you can sell them promptly if they plummet or increase fast. While a stop-loss order can protect losses, a stop-limit order can secure rapid profits.
Penny stocks are perfect for new investors that wish to learn more about the markets.
Final Thoughts
When trading penny stocks, it's critical to have a good sense of market timing so that you can enter and leave at precisely the proper times. When trading penny stocks, learning how to use technical analysis to enter at swing lows, retracements, breakouts, or with price action setups as confirmation will help you enhance your profit margins and overall success. More than identifying the best penny stocks in 2022, you need a tested and true method.
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