Penny stocks in tech are always a risk, especially if you are looking for the low-low priced ones. The lower the price, the riskier the stock. That statement doesn’t ring true all the time but it certainly does a lot of the time.
Bearing that in mind, there are still great bargains to be found in the penny stocks market. China’s smartphone maker Xiaomi (OTC:XIACF), at $1.52 USD per share, may just be one of them.
Penny Stocks to Watch
In the past three months, the Xiaomi penny stock has been down 22%. This is, most likely, not anything to do with the company’s performance, however, and more likely the fault of the China/US trade war.
In fact, on the contrary, this smartphone maker is experiencing surging business. It has become one of China’s most successful phone makers thanks to its very competitive pricing. The model it implements is arguably pricing-out some of its biggest competitors such as Samsung (OTC:SSNLF) and Apple (NASDAQ:AAPL).
The numbers say it all: the Apple iPhone XR and XS start at $749 and $999 USD respectively. Xiaomi’s latest release, the Mi 9, is priced at $445 USD—and it comes with all the tricks and whistles indicative of the latest and greatest phone tech.
Penny Stocks Growth
The quality of its devices doesn’t suffer, though you’d be forgiven for thinking that it might (“You pay for what you get” and all that). No, rather what Xiamoi’s clever pricing does is simply highlight how over-priced the market leaders are. And consumers are starting to take notice.
Where Apple is seeing a decline in sales of its recent iPhone X, Xiaomi has reported shipments growth of 21% on a year-over-year basis. Further, the tech giant reported a 49% improvement in revenue in its most recent reported quarter, making a profit of $370 million USD. Xiaomi has been growing rather drastically in a climate where the global mobile phone industry has reported a decline of 6% last year.
Those metrics are hard to argue with, especially when we also consider that very stifling trade war with the US. It’s clear that this penny stock is suffering due to outside factors at no fault of the company itself.
If you are looking for tech penny stocks that could return dividends in the not-too-distant future, Xiaomi may prove to be a winner. Business is currently riding high and the shares will no doubt catch up when trade-tensions allay.
What do you think? Are you a Xiaomi fan?
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