A controversial segment of the market, the concept of strong penny stocks nevertheless carries a certain charm. Now, let’s get something straight. Investing in this extremely risky space carries with it obvious dangers. Because of their low price and lack of attention (trading volume), these publicly traded securities can be wildly volatile. Don’t wager more than you can afford to lose.
Still, some high-risk ideas represent surprisingly good penny stocks. Here’s another reality. With thousands upon thousands of securities listed on U.S. exchanges, it’s practically inevitable that some solid enterprises will be overlooked. And that possibility rises when you’re talking about penny stock picks. Basically, not many folks follow these under-the-radar plays. Nevertheless, anything can happen in this wacky environment. If you’re looking for high-return penny stocks and can handle the heat, these ideas may be right up your alley.
CPS Technologies (CPSH)
Based in Norton, Massachusetts, CPS Technologies (NASDAQ:CPSH) is an industry leader in developing proprietary, advanced materials solutions for various industries. These include transportation, energy, aviation, defense, and oil and gas industries. Its flagship solution involves cutting-edge metal matrix composite, which represents a class of material with superior properties across thermal conductivity, thermal expansion matching, stiffness, and weight.
Fundamentally, CPSH – which presently trades hands at under $3 per share – may be considered one of the strong penny stocks because of its defense industry relevancies. As you know, geopolitical flashpoints dominate international headlines over the past year and a half. Further, the U.S. and the west’s rivalries with China tempt serious conflict. Cynically, it’s just better to be prepared, making CPSH among the relevant penny stock picks.
On a financial note, CPS isn’t exactly your typical idea for high-return penny stocks. Featuring excellent strengths in the balance sheet, CPS enjoys an Altman Z-Score of 5.65, indicating low bankruptcy risk. Also, it benefits from a Piotroski F-Score of 7 out of 9, implying high operational efficiency.
Orla Mining (ORLA)
Headquartered in Vancouver, British Columbia, Orla Mining (NYSEAMERICAN:ORLA) bills itself as an emerging gold producer of choice. Presently, Orla features three high-quality and low-cost projects in Mexico, Panama, and Nevada. At the time of writing, shares trade hands at a little over four bucks per share. Over the trailing one-year period, ORLA soared just over 59%.
Fundamentally, Orla mining may benefit from the fear trade. True, the latest read on inflation suggests that the pace of price acceleration has been slower than forecast. Therefore, inflation is moving in the right direction. However, other major headwinds – including mass layoffs and a record amount of household debt – cloud the economic recovery narrative. Therefore, ORLA could be one of the strong penny stocks to consider.
On the financials, the company could use some work. However, it’s also one of the surprisingly good penny stocks because of its fiscal stability. For example, its Altman Z-Score hits 4.78, indicating a low risk of imminent bankruptcy. Also, Orla is highly profitable, with a trailing-year net margin that impresses at 19.95%.
New Concept Energy (GBR)
Hailing from Dallas, Texas, New Concept Energy (NYSEAMERICAN:GBR) focuses on energy resource development. Founded in 1978, New Concept became a fully integrated producer of oil and gas in 2003. Per its website, the company features oil and gas drilling and exploration projects in North America. Since the beginning of this year, GBR gained almost 17% of its equity value.
Fundamentally, GBR makes a viable case for strong penny stocks because of the “harsh” relevancies of the hydrocarbon sector. Sure, hydrocarbons may seem out of vogue because of rising interest in renewable energy solutions. However, because of the high energy density associated with fossil fuels, “black gold” is difficult to quit outright. Plus, as society gradually normalizes fully from the Covid-19 pandemic, traffic volumes should also rise. In theory, this framework should benefit GBR as one of the profitable penny stocks. Finally, New Concept commands a strong balance sheet that’s unencumbered with debt. That gives management incredible flexibility during an ambiguous market cycle.
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 that InvestorPlace.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, Josh Enomoto 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.com Publishing Guidelines.