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Summary
- Penny stocks are generally low-priced shares of companies with low market cap
- These stocks are highly unpredictable, and therefore highly risky
- Investment in penny stocks should be a carefully weighed process, taking into account the company’s background, future goals and a variety of other factors
Penny stocks’ minimal pricing and potential high returns has often attracted investors despite its volatile and high-risk nature. Ford Motors, Blackberry and Xerox once traded as penny stocks before becoming multi-billion-dollar companies.
These stocks are mostly a hit or miss opportunity and should not ideally be more than 10 percent of the entire investment portfolio for minimizing risks. There’s no way to gauge the company's financial record and are subject to a high probability of fraud.
A good way to navigate penny stocks is to look at the company’s business plan, management’s long-term goals, current market trends and rallies, total volume of shares traded and staying alert to swinging market moods.
Presenting seven penny stocks for August that investor’s need to keep tabs on:
- Hive Blockchain Technologies Ltd. (TSXV:HIVE)
Current Share Price: C$ 0.55
Hive’s shares have charted a remarkable growth on the stock exchange, gaining over 478 percent since January this year and 80.33 percent in a month. It had the highest volume of share trades on the Toronto Stock Exchange Venture (TSXV) in June this year.
Hive is a cryptocurrency mining firm and the first publicly listed blockchain infrastructure company, that bridges cryptocurrencies and blockchains to capital markets.
The company generated USD 5 million income from digital currency mining for its third quarter. It had USD 6.2 million cash in hand and cryptocurrency inventory of USD 3.4 million and a working capital of USD 11.8 million at the end of December 31, 2019.
- Novo Resources Corp. (TSXV:NVO)
Current Share Price: C$ 3.82
Novo Resources is among the top ten companies on TSXV currently and has a market valuation of C$ 720 million. Stocks of this gold acquisition and exploration firm are mostly trading flat this year and have advanced by 1.87 percent in the last one month.
Novo Resources is debt-free and has C$ 28.1 million in the bank. It is set to become Australia’s first conglomerate gold producer in WA and has the largest conglomerate gold landholding in Pilbara.
The company recently announced an upsize of private placement from C$ 30 million to C$ 42.5 million and concurrent non-brokered private placement of C$ 3 million. Top gold mining and producing firms such as Newmont and Kirkland have invested in Novo Resources.
Novo Resources’ Ownership
- Datametrex AI Limited (TSXV:DM)
Current Share Price: C$ 0.16
The C$ 42 million-tech firm focuses on artificial intelligence, machine learning, health diagnostics and cyber security, all of which have seen an increase in demand during the ongoing pandemic. The firm operated through its Nexalogy subsidiary and boasts of top clientele such as US Air Force and NATO.
Datametrex shares have grown by an astonishing 700 percent this year. The stocks returned 60 percent in a month. The company has received funds from Canada’a Department of National Defence Innovation for Defence Excellence and Security for developing its Nexalogy SMART program.
- MedMira (TSXV:MIR)
Share Price: C$ 0.405
Biotechnology firm MedMira’s scrips rallied an astonishing 4050 percent this year after emerging as a top Canadian firm to develop the COVID-19 antibody test kit. The shares jumped 36.6 percent in last three months. However, stocks have declined by 6.74 percent in the last month.
While MedMira’s second quarter result wasn’t very strong, it could be the one stock to watch out for in the coming days as the pandemic rages on.
MedMira primary focuses on rapid testing solutions using patent RVF Technology platform to combat HIV, hepatitis, syphilis, and other infectious and sexually transmitted diseases. Its current market capitalization is C$ 266 million.
- Galway Metals Inc. (TSXV:GWM)
Current Share Price: C$ 2
Galway is a metal exploration company, which has benefitted from the recent rally of metal and mining stocks amid pandemic crisis. The scrips have advanced nearly 500 percent this year and have returned over 110 percent in a month. The company is currently valued at C$ 333 million and has two high-grade gold properties in Canada (New Brunswick and Quebec).
Galway Metals is debt-free and currently has USD $5 million cash in hand. It has three drilling rigs, up from one in summer 2019 and plans to drill 25,000 meters.
- Rupert Resources Ltd. (TSXV:RUP)
Share price: C$ 2.98
Rupert’s stocks have also benefitted from the recent rally in gold on the TSX. Shares of this mineral exploration company have grown by 341 percent since the beginning of the year. The scrips have returned over 300 percent in three months.
The company is valued at C$ 474 million and held cash or cash equivalents of C$9.5 million at the end of May. It also closed C$ 25.6 million in equity financings at the end of July.
The company operates Pahtavaara gold mine in Northern Finland.
- Vaxil Bio Ltd. (TSXV:VXL)
Share Price: C$ 0.10
The C$ 10 million-Israeli immune-oncology company has gained ground over the recent market drive in health and biotechnology sector due to pandemic fears. The shares have jumped 200 percent since January this year and over 16 percent in a month.
The firm has been trying to develop ImMucin vaccine to treat multiple myeloma cancer. It is also targeting COVID-19, solid tumors, clinical stage immunotherapy and identification of signal peptide and monoclonal antibodies (mAbs). The company is currently exploring additional funding options.
