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Highlights
- Investment in penny stocks is highly risky but may fetch short-term gains.
- A crypto stock mentioned here soared by roughly 362 per cent in the last 12 months.
- A waste management company noted its stock marking a one-year return of more than 382 per cent.
Investment in penny stocks is a risky venture as these belong to small companies, which are typically young with a market capitalization of C$ 60 million to C$ 300 million.
Penny stocks are cheap and may fetch short-term gains for investors. However, there is no surety that these stocks will exhibit growth.
Moreover, penny stocks are highly risky as, generally, these do not have much of a cash reserve support system, which means that they can quickly go bankrupt and take investors’ money with them.
That is why investors should bear in mind risk factors and closely look at these stocks before betting their money.
Also read: Top 3 Canadian dividend penny stocks to buy before 40
Here are two Canadian penny stocks listed on the Toronto Stock Exchange Venture (TSXV), which we can say have delivered significant returns to their shareholders in the past year.
Cryptostar Corp (TSXV:CSTR)
On Friday, October 29, Canadian crypto miner with data centers throughout the United States and Canada, Cryptostar Corp, noted its stock closing at C$ 0.185 apiece, up by 2.778 per cent. It had dropped by nearly 78 per cent from a year high of C$ 0.84 touched on February 22.
Image source: © 2021 Kalkine Media Inc
The CSTR stock soared by roughly 362 per cent in the last 12 months. Its nine-month return stood at almost 95 per cent, while on a quarter-to-date (QTD) basis, it expanded by more than 32 per cent.
It fell by nearly 34 per cent in the last six months and seems to be recovering by marking a three-month return of roughly 28 per cent while making a month’s growth of about 37 per cent.
The Toronto-headquartered Cryptostar is among the top 15 actively traded stocks with a 10-day average trading volume of 4.3 million (as of October 29), as per the TMX site.
Cielo Waste Solutions Corp (TSXV:CMC)
The Vancouver-based waste management company Cielo Waste Solutions Corp, through its technology, refines waste into quality renewable fuels.
Cielo saw its stock wrapping trade up at C$ 0.41 apiece, up by 5.128 per cent on October 29. It had slipped by more than 75 per cent from its 52-week high of C$ 1.65 reached on July 13.
The CMC stock witnessed a fall of almost 69 per cent in the previous three months and declined by more than 55 per cent in the last six months. But considering its one-year return, which was up by more than 382 per cent, it has delivered returns to its shareholders. It gained roughly 356 per cent in the last nine months.
The company successfully commissioned a desulphurization unit at its Aldersyde, Alberta, facility, which is of prime importance for its ongoing research and development operations, marking a step towards commercial production. Once commercial production starts, this unit is expected to generate higher revenue from its waste-to-fuel products, an announcement said on October 12.
Bottom line
Canadian penny stocks are viable investment options for rookies and investors who want to invest a small portion of the money in the stock market.
However, considering the risk level, it is essential to evaluate the fundamentals as a company’s ability to overcome market setbacks depends on it. Before making any investment decision, investors should research the company, its stock performance, financials, business operations, and other crucial factors that reflect its strength.
Also read: 3 Canadian EV stocks that should be on your radar
