Penny stocks are equity investments that are traded outside major stock exchanges. These stocks are traded at low prices and have a small market cap. As penny stocks are illiquid and highly speculative, they carry a high risk of investment.
The US Securities and Exchange Commission (SEC) defines penny stocks as shares with a value of less than $5. Typically, a penny stock is traded over the counter or by using pink sheets.
Despite the high risks of investment, penny stocks can be a lucrative form of investment because of its low price and higher prospects of return.
Here we look at 5 penny stocks that are very promising.
1. Neptune Technologies & Bioresources Inc [NEPT]
Neptune Technologies and Bioresources Inc is a Canada based wellness solutions provider. It offers nutraceutical products or standardized nutrients of a pharmaceutical grade.
MaxSimil is a patented ingredient and one of the premium products offered by Neptune. Other products include marine oils, seed oils, as well as oil extracted from legal cannabis.
Neptune also offers pet nutritional products.
In 2016, Neptune acquired Biodroga, a privately owned business solution provider for functional ingredients. Since April 2017, Neptune has become a licensed producer of Cannabis and Hemp Oil in Canada.
The monstrous growth in cannabis will hold NEPT in good stead. Analysts expect sales to rise 37% year-over-year to $39M in 2019.
Market Cap: $316M
Year-to-Date Return: 70%
Earnings Growth: 66.7%
2. Glu Mobile Inc. [GLUU]
Gaming has become one of the popular modes of entertainment. Glu Mobile is a game development company targeting mobile phones and smart gadgets.
The brand has already come up with multiple action games as well as mobile versions of console and arcade games. One of the popular role-playing games “Kim Kardashian: Hollywood” released by this company features the life of a reality TV celebrity. Glu Mobile Inc. primarily targets the female audience and over 60% of its games are female-centric.
The primary source of revenue is from the in-app purchases.
Glu Mobile has benefited immensely from the exponential growth of mobile gaming. With the global gaming industry set to experience robust sales over the next few years, Glu Mobile might be on the radar of several investors and analysts.
Analysts expect the company’s revenue to rise by 18% this year and 12.3% in 2019.
Market Cap: $1B
Year-to-Date Return: 103%
Earnings Growth: 40%
3. Arotech Corporation [ARTX]
Arotech Corporation is a successful mixture of modern technological innovations for federal use. There are two primary divisions of Arotech. One is the Training & Simulation department while the second focuses on Power Systems.
The Training and Simulation Department clubs drone technology and virtual reality for military use and law enforcement. Many of the simulations are used for combat training. Additionally, it also offers security services and weapons simulations for aircraft and missile guidance systems.
FAAC is one of the subsidiaries of Arotech Corporation. It was awarded a contract by the US Marine Corps. FAAC will be responsible for updating the convoy systems and the contract is valued at around USD 29 million.
Headquartered in Ann Arbor, Michigan, this defense and security company has been in existence for more than two and a half decades. Analysts expect revenue to rise by 1.3% to $100M this year and 11.8% to $111.8M in 2019.
Market Cap: $90M
Year-to-Date Return: -3%
Earnings Growth: 127%
4. CAS Medical Systems [CASM]
Medical and Healthcare sectors are seamlessly adopting modern technologies. CAS produces as well as markets products that can be used to monitor a patient’s vitals. Its products can be used to track patients without the use of invasive methods.
MAXNIBP is its traditional product to measure blood pressure. The company also offers a product called FORE-SIGHT which is a Tissue Oximeter with sensors.
Analysts expect CAS’ revenue to rise by 6.8% to $20M this year.
Market Cap: $63.3M
Year-to-Date Return: 196%
Earnings Growth: 15%
5. Dolphin Entertainment [DLPN]
Here’s another content production company — Dolphin Entertainment, Inc. engages in marketing and providing publicity services to major film studios, and many of the independent and digital content providers.
It is, however, flying under investors’ radar as the limelight is focused on content giants such as Netflix [NFLX], Disney [DIS] and others. It recently acquired 42West that expands its revenue stream into the public relations space.
Analysts expect Dolphin’s revenue to rise by 4.9% to $23.5 million this year, and 19.4% to $28 million in 2019.
Market Cap: $35.36M
Year-to-Date Return: -30%
Earnings Growth: 82.4%
6. Fura Gems [FURA]
Fura Gems is primarily a natural resource company. It engages in the acquisition and exploration of resource properties. The company was founded in 2006 and headquartered in Toronto, Canada.
This penny stock is currently trading at $0.40. The gemstone mining and marketing company is eyeing a share of 8-10% in the global colored stone market over the next three years. The market is estimated to reach$2B in 2021 which translates into annual revenue between $160M and $200M for Fura Gems.
Fura Gems is looking to expand its footprint in Mozambique and recently acquired nine ruby assets in the country.
Market Cap: $48.4M
Year-to-Date Return: -28%
Will Cloud Gaming Drive The Next Big Gaming Transition?
The global gaming industry has always been a disruptive one. Nuclear physicist Edward Condon developed the first computer game in 1941 called Nim, one which pretty much saw the computer win 90% of the time.
The disruption didn’t fizzle out. Soon afterwards, the first programming guidelines were written for a chess game developed by Claude Shannon, while a decade later the US Department of Defense created a war game — STAGE.
This really set the stage for what was to come later — video games. American investor Ralph Baer wasted no time and conceived the idea of playing video games on TV, and the world’s first gaming console was released. The rapid evolution of gaming consoles coupled with gaming design and the introduction of graphics cards have taken the global gaming industry by storm.
In the last decade, the evolution of smartphones opened up a totally new segment known as digital gaming. In 2016, Activision Blizzard paid close to $6B to acquire King Digital- a digital gaming behemoth. Not one to trail far behind, the eSports segment, despite its nascency, proved to be a long-term revenue driver for top gaming firms.
Will cloud gaming be the next key driver in global games?
Now companies such as Microsoft [MSFT], Google [GOOG] and Electronic Arts [EA] aim to create a market for cloud gaming. So what exactly is cloud gaming? It’s similar to online streaming services such as Netflix [NFLX] and Amazon Prime [AMZN], but with games.
Cloud gaming will allow users to play games on their computer or mobile devices. A remote server will send players video feed and receive controller inputs. This now means that players no longer need to purchase gaming consoled to play the latest games. All you need is a stable internet connection.
Google’s cloud gaming project is called Project Stream and the company launched a beta test last month. Players required a Google Chrome browser and an internet connection of 25 Mbps or higher.
Microsoft which also manufactures the Xbox consoles announced its cloud gaming platform known as Project xCloud. It has confirmed several Xbox games for beta testing such as Halo, Minecraft, and Gears of War.
The tech giant is hoping for growing interest in cloud gaming to offset any declining sales in gaming consoles.
Following Google and Microsoft, top gaming publisher Electronic Arts has forayed into this space, with a project known as Project Atlas.
Will this move garner global attention?
The shift to cloud gaming is going to be as disruptive as any in the gaming space. Players can now subscribe and stream games online instead of spending over $300 for the latest gaming console. The cloud gaming space is expected to grow at a compound annual growth rate of 26% between 2017 and 2023.
While Netflix and Amazon have changed the consumption of entertainment via cord cutting, it is very likely that cloud gaming will soon be a hit among players in a few years time. Is this the end of the gaming console?
10 Stock Terms Every Newbie Investor Should Know
Investing in the financial markets can seem quite tricky. There are far too many stories where people tried to play the stock market without much success. When the markets are on a roll, everyone wants a piece of the pie.
Here are 10 terms every investor cannot afford to miss.
1. Market Cap
The market capitalization of a stock is simply the total number of outstanding shares multiplied by the share price of the company. Companies are generally differentiated on the basis of market cap.
Small cap companies generally have a market cap of between $300M and $2B, while mid-caps are between $2B and $10B. Any company with a market cap over $10B is considered a large-cap. While small-cap and mid-cap stocks have historically outperformed large caps, they are also way riskier.
Being A Millionaire: What Does It Actually Mean?
You’re dreaming about luxury vacations and nice cars. OH, you can’t wait to be a millionaire.
But I’m here to tell you to think again.
While having more money is never a bad thing, what you’ve probably envisioned and what the reality is don’t match up. Let me explain.
What is the Definition of a Millionaire?
By definition, a millionaire is a person or family who has a net worth in excess of $1 million dollars. This answer is very U.S. centric as different countries have their own versions of this answer. For example, it takes 117 Japanese Yen to make 1 USD, so $1 million Yen doesn’t get you very far!
Even though in the U.S. the concept of a millionaire is static, what those million dollars gets you over time can change dramatically.
An example of that is the effect of inflation. A million dollars in 1950 is worth about $10.5 million in today’s dollars. But, the definition of a “millionaire” didn’t change. So, Today’s millionaires have 1/10 the amount of money that millionaires had when your parents were born.
So, the idea of “millionaire” status is really less meaningful than it was decades ago.
Another thing that messes with the definition of a millionaire is the fluctuation of exchange rates and purchasing power.
Let’s go back to the example above with Japan. We know that 1 US Dollar can get 117 Japanese Yen. We know that $1 can get you a chicken sandwich at a fast food restaurant. If you can go to Japan and get a similar sandwich for ¥ 117 then your purchasing power hasn’t changed.
The reason why I bring this up is to show that having a million dollars may be worth a lot in one place in the world but not worth much elsewhere depending on purchasing power.
How Many Millionaires in the U.S.?
There are roughly 325 million people in the U.S. which means that around 4.6% of the US population are millionaires. In other words, around 1 in 20 people are millionaires.
When you go to the mall, a huge number of cars in that parking lot are owned by millionaires.
In your child’s classroom, chances are one of those children were born to a millionaire family.
Chances are, one of your friends or family members is a millionaire and you don’t even know it.
But, if so many people are millionaires, where are all the Lambos and mansions?
It’s Not What You Think
Net Worth is not cash in the bank. You can’t spend $1m when it’s coming from the value of your home or 401k. Even if it was cash in the bank, it’s not even a lot of money.
$1m doesn’t get very far. You can buy a decent house with it but that comes with expensive maintenance, lawn care, repairs, and a crap ton of new furniture to fill up 5x more space than you’re used to having.
It can get a foreign sports car, but that comes along with $500 oil changes and $1,000 for a new tire (remember, you need 4).
$1,000,000 invested conservatively could earn you around $40,000-$50,000 per year in interested. That’s hardly enough to retire on especially as old age comes with added costs of health care.
But, if most of that $1m is in your home, which is true for most people, it’s not earning any interested. Even if it was, you’d have to sell your home to get that money. Then what?
Don’t Focus on Becoming a Millionaire
Of course, anyone would rather have $1m than not have it. But, don’t make it your focus. Having it isn’t going to get your cars or vacations. Net worth is one thing to measure, but it’s more important to focus on cash flow.
Yearly passive income will buy you anything you want. It’s money you can spend. It’s cash in the bank. Net worth is money locked up somewhere. You need assets, but assets don’t buy you things. If that asset doesn’t produce cash flow, you can only use it by selling it and that’s not a good place to be.
What’s more important is focusing on building up passive sources of income from real estate, side businesses, stocks, or other ventures.
Focus on building up $40k or $100k in passive income rather than focusing on having $1m in net worth.