Penny stocks, which are stocks valued under $5, can be a risky bet for investors. They usually consist of fallen angels or stocks that are yet to, and may never, live up to their full potential. The prospect of turning a pretty small investment into a more than sizeable return can be too hard for some to resist. There have been some amazing success stories with penny stocks over the years, as well as more than a few spectacular failures; thankfully, we’ve been keeping an eye on the market so you don’t have to. Today’s choices include Arotech and Aegon.
Arotech Corporation (NASDAQ:ARTX) is a technology manufacturer for the defense and law enforcement industry, specializing in simulations for use of force training as well as providing weapons simulations for aircraft and missile systems. Last year, one of the company’s subsidiaries was awarded a $29 million USD contract to update convoy simulators for the US Marine Corps. With drone and VR technology enjoying massive growth in demand at the minute, this penny stock looks to be a leader in the niche market of military technology.
ARTX stock is currently trading at $2.97, and the company has been posting positive operating income in recent quarters, which looks set to continue as demand for its services looks only upwards. As with any penny stock, volatility is implied as Arotech’s Q1 earnings didn’t quite live up to the hype, but who’s to say that won’t change as drones and CR become more commonplace.
Aegon N.V. (NYSE:AEG) is a rarity among penny stocks. With a market cap of nearly $9 billion USD and 26,000 employees on its book, this Dutch insurance and asset management firm is anything but small. Looking at the financials, it’s even harder to believe that AEG stock is trading at just $4.42 right now. Profits in the last set of earnings rocketed 209%, while EPS over the next five years is expected to climb nearly 40%. A dividend of 33 cents is just the cherry on top, so what’s the catch?
Well, AEG’s sales average over the last five years has been declining 15%, with management working hard to turn that around. The group’s assets are also heavily tied up in mortgages, and with fears that a recession may be on the horizon, as housing markets across the globe increasingly show bubble-like effects similar to the 2008 crisis, this penny stock is a very risky bet indeed. However, if you have a solid appetite for risk, or even enjoy some short-selling, maybe this is the bet for you.
So that’s our pick of penny stocks to watch today—what do you think?
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