Penny stocks are the stocks of a small company that trades for $5 per share or less. While some penny stocks trade on large exchanges such as the New York Stock Exchange (NYSE), most trade over the counter (OTC) through OTCBB (electronic OTC Bulletin Board or through privately owned OTC Markets Group).
As there is no trading floor for OTC transactions, quotations are done electronically. There are some good choices when it comes to penny stocks in the technology sector although investing in penny stocks can be risky and the trading costs might be high. There is no widely used benchmark for technology penny stocks, and their performances vary significantly over some time.
However, if chosen carefully, these penny stocks can give you good results. The Invesco S&P SmallCap Information Tech ETF (PSCT) provides a general indication for the tech penny stocks, although it has underperformed the broader market in the past year. You can use this index and other such indicators to make your choice.
Best Value Tech Penny Stocks
There are several tech penny stocks with a low 12-month trailing price-to-sales (P/S) ratio. In the case of companies in the early stages of development and industries suffering from major shocks, this can be considered as an approximate estimate of a business’s value.
Businesses with higher sales can go on to deliver more profit when it eventually achieves or returns to profitability. The price-to-sales ratio indicates how much you’ll pay for the stock for each dollar of sales generated. Exela Technologies Inc., SOS Ltd., and Boxlight Corp are some examples of these penny stocks.
Fastest Growing Tech Penny Stocks
These tech penny stocks have the highest year-over-year (YOY) sales growth for the most recent quarter. Increased sales help the investors pick out the start-ups with growth potential and those that have not yet reached profitability. In addition, earnings per share are considerably influenced by accounting factors that might not reflect the overall strength of the business. However, it should be noted that sales growth can be potentially misleading regarding the strength of a business. This is because growing sales on money-losing businesses are potentially harmful if the company has no plan to attain profitability. Some of the stocks that fall in this group are Desktop Metal Inc., Boxlight Corp., and KULR Technology Group Inc.
Tech Penny Stocks with the Most Momentum
Some of the tech penny stocks with the most momentum include Phunware Inc., KULR Technology Group Inc., and Marin Software Inc. These tech penny stocks had the highest total return over the last 12 months, which makes them an ideal choice.
Let’s now look at some of the penny stocks you can consider across the categories mentioned above.
Exela Technologies Inc.
Exela Technologies is a business process automation company that offers software and services for accounting, and human resources management, among others. Recently the company announced several new contracts and partnerships including expanding its existing relationship with Mastercard Inc. (MA) in Europe. This is to support the automation of 11 million Giro payments and processing in Norway through Exela’s XBP platform. Giro payments are used to directly transfer funds from one bank account to another without using physical checks. It is trading in the range of $0.7860 on Nasdaq
SOS Ltd. is a China-based holding company. It offers financial services such as consumer credit, emergency rescue services, and insurance products through subsidiaries. The company offers a consumer lending marketplace for customers in China. The trading price is in the range of $0.7274
Boxlight provides interactive technology solutions such as displays, collaboration software, as well as audio and campus communication solutions. The company targets to serve schools, businesses, and governments. During the Q3 that ended on Sept. 30, 2021, Boxlight reported a net income of $0.7 million which is a net loss for the prior-year quarter however, its YOY revenue soared 544%. The gains were mainly driven by the acquisition of Sahara in Sept. 2020 along with increased customer demand, the stock trades at $1.14
Desktop Metal Inc.
Desktop Metal Inc. manufactures 3D printers and other equipment used to build complex parts. The company serves industries such as aerospace, healthcare, consumer products, and heavy industry. The Q3 results for 2021 reported dramatically widening net losses Year on Year on more than 900% revenue growth. The company attributed its revenue growth to the strength of its core metals business as well as the recent acquisitions. The stock trades for under $5 on NYSE.
KULR Technology Group Inc.
The KULR Technology Group is a holding company that develops and commercializes thermal management technologies through its subsidiary KULR Technology Corp. The focus is on electronics, batteries, and other components for aerospace, military, and commercial applications. The company stock trades around $2.17.
Phunware offers software platforms to engage, manage, and monetize mobile application portfolios. Some of its products are cloud-based mobile software licences, software development kits, cloud computing solutions, and other related services. Recently, Phunware introduced four new optimized personal computers made specifically for high-end gamers, traders, streamers, and cryptocurrency miners for the Consumer Electronics Show (CES) in Las Vegas. The new PCS are LYTE Gaming Series, LYTE Trading Series, LYTE Streaming Series, and LYTE Mining Series. The stock price is around $2.34
Marin Software Inc.
Marin Software is a digital marketing software company that provides software-as-a-service, an advertising management platform, along with other related products and services. Recently, Marin announced the addition of LinkedIn Marketing Solutions campaign capabilities to its MarinOne platform. This gives advertisers improved insights and performance for their LinkedIn campaigns through machine learning and automation. The stock trades at $3.17
Amyris is a biotech company that focuses on vaccine development. Late last year, Amyris and ImmunityBio Inc. entered a JV partnership for a COVID-19 RNA vaccine. Current trading levels have AMRS shares situated around the $4.50-$5 range, which would equate to an upside of over 200%. The upcoming acquisition of MenoLabs, LLC that focuses on a women-founded company to treat menopause symptoms, drive research for women’s health and improve society’s understanding of menopause is expected to drive the growth further.
Danimer Scientific has surprised everyone by bouncing back after a continued downtrend to fresh 52-week lows. Before that, the company was flourishing early in 2021, even reaching over $60 in light of new deals such as the introduction of new biodegradable plastics such as biodegradable straws. It is trading in the range of $5 at present.
Before you invest in penny stocks, you must do research and exercise due diligence. You can use the analyst ratings to help in consolidating your research findings.
Remember that there is no substitute for real-time research. In the case of most penny stocks, the fact is that they are still early in their development, and hence speculation can play a much more significant role. Considering that it might not be a bad idea to look beyond the hype and dig deep into specifics. You must consider factors such as trials, pending mergers, and so on when you deal with penny stocks.
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Tim Thomas has positions in the stocks, ETFs or commodities mentioned.
This post was produced and syndicated by Tim Thomas / Timothy Thomas Limited.
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