Penny stocks are classified by the SEC as any shares trading under $5. It’s pretty straightforward. Except it isn’t.
These types of stocks are among the more volatile securities you could ever buy. There are a bunch of reasons as to why that is, but one of the more confusing ones is the low price tag. If it’s that low what have you really got to lose, right? However, just because a share trades for a dollar doesn’t mean that it’s a cheap stock. There are many variables.
Sometimes, that tiny price tag lures the wrong kinds. Penny stocks are more susceptible to scammers and wild price swings. Short-term sellers abound and the odds stack against you that you could actually make some serious buck off of these stocks.
That being said though, the allure of those low prices remains and everyone knows the winning ticket is out there.
Here are two potential winners, though nothing is a given in this game.
Penny Stocks: Enservco
Let it be known that sometimes the penny stocks with the most potential are also the most boring. Enter Enservco (NYSE:ENSV). This little-known oil and gas company runs a low-key but very stable business in well enhancement and fluid logistics.
Business is stable and growing. In the past year, ENSV shares are up 100% and according to statistics “the company also has 266.7% earnings growth in store over the next year and a steady 27% growth rate over the next five years.”
Some are even predicting stock upsides for Enservco of over 50% in the coming year. Nothing is a sure thing but the fundamentals here look good.
Currently, the ENSV penny stock is selling for $0.51 USD.
Penny Stocks: Smart Sand
Staying in the same industry but moving slightly in a different direction is Smart Sand (NASDAQ:SND). This company’s business is in hydrocarbon recovery for Big Oil hydraulic frackers. Smart Sand also has two mines of its own for fracking in Wisconsin.
Business here has also been good; net income has increased in the last four years from $8 million to $29 million USD in 2018. This quarter, analysts are expecting the stock to double its earnings. Then next quarter a growth of 516% is expected.
Don’t jump the gun here though; analysts get things wrong all the time. However, SND fundamentals are good, and these predictions are derived from strong possibilities and not from thin air.
Currently, the SND penny stock is selling for $2.74 USD.
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