- Penny stocks are the shares of companies with a market capitalization ranging from C$ 50 million to C$ 300 million. Generally, these stocks are priced under C$ 5.
- Due to low market capitalization and less cash balance, these companies may fail to succeed or explore potential business opportunities.
- A tech stock mentioned here rocketed by more than 205 per cent over the past nine months.
Christmas is close, so Christmas shopping is at its heights. And with the present-buying spree burning a hole in your pocket, the investor in you may be looking for some cheaper stocks to buy that could bring joy to your wallets. That’s where penny stocks come in.
Penny stocks are those that, while costing less than C$ 5 apiece, have a market capitalization ranging from C$ 50 million to C$ 300 million.
While their low prices can be attractive, investors should bear in mind the risks of volatility that come with penny stocks.
That said, let us have quick glance at the three Canadian penny stocks listed on the TSXV and their stock performance.
1. Hamilton Thorne Ltd (TSXV: HTL)
Hamilton Thorne Ltd, which provides medical instruments, software solutions and services to the healthcare sector, saw its stock close at a value of C$ 2.15 apiece on Thursday, November 11, up by 2.381 per cent. Its stock hit a one-year high of C$ 2.2 per share during the trading session.
HTL stock increased by roughly 15 per cent in the past three months. It also surged by almost 51 per cent year-to-date (YTD) and delivered a return of nearly 53 per cent in the last year.
On the valuation side, the Canadian healthcare company noted a price-to-book (P/B) ratio of 4.574 and a debt-to-equity (D/E) ratio of 0.15 and a return of equity (ROE) of 5.44 per cent on Friday, November 12.
2. GoldSpot Discoveries Corp (TSXV: SPOT)
Canadian software firm GoldSpot Discoveries Corp is known to utilize its machine learning technologies to minimize the capital risk faced by the natural resource sector and improve the probability for these projects’ success.
The Toronto, Ontario-based tech firm saw its stock close at C$ 1.19 apiece on November 11, up by more than eight per cent.
The tech stock also soared by roughly 17 per cent in the past week and grew by about 40 per cent in the last six months.
It rocketed by more than 205 per cent over the past nine months and returned approximately 180 per cent in the last year.
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On November 11, GoldSpot reportedly inked a service agreement with Canstar Resources to apply its proprietary technology in 62,175-hectares Golden Baie project.
On the valuation front, GoldSpot noted earnings per share (EPS) of 0.23 and an ROE of 54.65 per cent as of November 12.
3. Titanium Transportation Group Inc (TSXV: TTM)
A transportation and logistics service provider, Titanium Transportation Group Inc saw its stock close at C$ 3.41 apiece on November 11, having jumped by roughly 32 per cent YTD.
TTM stock also mounted by more than 55 per cent in the last 12 months.
The Bolton, Ontario-headquartered firm recorded a year-over-year (YoY) rise of 93.2 per cent in its consolidated revenue of C$ 101.7 million in the third quarter of fiscal 2021. Its adjusted EBITDA expanded by 7.8 per cent YoY to C$ 7.2 million in the latest quarter.
On November 12, Titanium has posted a P/B ratio of 2.006 and an ROE of 11.98 per cent.
Penny stocks, present in ample loads across the market, can be a good starting point for novice investors.
However, amateur or not, investors should note that penny stocks are known to be highly volatile in nature, mostly due to their smaller market cap and business range. Hence, any investment decisions, specially while considering penny stocks, should be led by proper technical and fundamental analysis.