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Highlights
- The highest ROE posted by penny stock companies in this list is 4,629.62 per cent.
- The highest one-year stock gain of the below companies was close to 1,153 per cent.
- One of these technology companies integrated with Shopify to develop an AI-based application to be used by the retailers of Shopify.
To put a definite perspective and figure, the stocks whose companies hold a market capitalization between C$ 60 million to C$ 300 million are categorized as penny stocks. Along with its ability to generate stronger and higher returns than mid-cap and small-cap stocks, higher are the risks of investing in these penny stocks.
Some investors prefer to buy stocks very cheaply and hold these stocks believing in them to fetch strong returns and price gains in the future.
The S&P/TSX Venture Information Technology (Sector) Index posted a year-to-date (YTD) return of 23.9 per cent, while one of these penny tech stocks posted a YTD return of 258.6 per cent, outperforming the index.
Let us explore some of the penny technology stocks listed on the Toronto Stock Exchange Venture.
- Powerband Solutions Inc (TSXV:PBX)
The technology company develops powerful cloud-based tools and solutions for dealers and vehicle buyers. The cloud-based products are used as finance portals and for auctions. Powerband also provides solutions like market intelligence and marketplace auctions.
The company posted a return on equity (ROE) of 4,629.62 per cent and a market cap of C$ 178.43 million on September 3, 2021.
The stock price of Powerband traded 550 per cent above its 52-week low of C$ 0.16 and closed at C$ 1.04 on September 2, 2021. The stock price climbed 362 per cent over the past year, but it expanded close to 478 per cent in the past nine months.
In the second quarter of FY21, Powerband posted revenue of C$ 4.7 million, up 63 per cent Year-over-Year (YoY). Its net loss was C$ 1.85 million in the same quarter.
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- GoldSpot Discoveries Corp (TSXV:SPOT)
GoldSpot Discoveries is a technology company deploying machine learning concepts and solutions in mineral discovery and extraction. The company also does geological modeling in its mineral discovery process, thereby saving time and costs.
The net and comprehensive income of GoldSpot grew by 348 per cent YoY to reach C$ 12.71 million in Q2 FY21. Its consulting revenue was up by 166 per cent YoY in the same quarter.
The stock price of GoldSpot traded close to 538 per cent above its 52-week low of C$ 0.16 and closed at C$ 1.02 on September 2. It expanded by a whopping 451 per cent over the past year.
The technology company held a market cap of C$ 123.89 million, a price-to-earnings (P/E) ratio of 4.2, and an ROE of 54.65 per cent. Furthermore, its return on assets (ROA) was 47.14 per cent on September 3, 2021.
Also Read: Top 3 dividend-paying penny stocks to buy in Canada
- DMG Blockchain Solutions Inc (TSXV:DMGI)
The C$ 213.4 million market cap firm is a blockchain and cryptocurrency development company. DMG Blockchain develops digital solutions that help monetize blockchain systems, host servers to verify transactions, etc.
The company held a price-to-book (P/B) ratio of 2.51 and a debt-to-equity (D/E) ratio of 0.01 on September 3.
At the market close of September 2, the stocks were priced at C$ 1.28 apiece. On February 22, 2021, it reached its 52-week high of C$ 5.34. On a YTD basis, the stock price of DMG increased by 113 per cent, but over the past year, it skyrocketed close to 1,406 per cent.
One-year chart of stock performance, volume and moving average exponential of DMG Blockchain Solutions Inc (Source: EODHD/Others)
The above stock price depicts the one-year chart of DMG Blockchain Solutions Inc. The price gained from C$ 0.06 apiece in mid-October 2020 to reach a price of C$ 1.28 on September 2, 2021. It appears to be an uptrend forming series of highs and lows.
- Fobi AI Inc (TSXV: FOBI)
The technology company develops artificial intelligence (AI) based solutions for the retail industry. The retailers use IoT devices and AI solutions developed by Fobi AI to gain insights.
The company held 130.28 million outstanding shares and a market cap of C$ 222.78 million on September 3. Moreover, on this day, the company posted an ROE of 381.55 per cent
As per the latest quarterly report, Shopify, a leading e-commerce platform, integrated with Fobi AI and launched the Fobi App, which is to be used by the retailers of Shopify. The application developed by Fobi AI provides real-time data to over 1.7 million retailers.
On December 8, 2020, the stock price of Fobi AI reached its 52-week high of C$ 2.98 and closed at C$ 1.71 on September 2, 2021. On a YTD basis, the stock price dipped by close to 17 per cent. However, over the past year, the stock price rocketed nearly 598 per cent.
Also Read: 6 hottest Canadian tech stocks to buy & hold for long-term gains
- Digihost Technology Inc (TSXV:DGHI)
Digihost is a blockchain company engaged in the process of mining bitcoin. The C$ 159.94 million market cap company held a P/B ratio of 2.1, and its mining operation is located in Buffalo, New York.
The stock price increased by 43 per cent on a quarter-to-date (QTD) basis, but it skyrocketed close to 1,153 per cent over the past year. On September 2, it closed at C$ 2.13.
Digihost posted digital currency mining revenue of US$ 5.11 million in Q2 FY21, up 369 per cent YoY. Its cash flow was US$ 20.3 million, and adjusted EBITDA was US$ 2.7 million in the same quarter.
Bottom line:
It is evident from the above that penny stocks can generally deliver faster and higher returns compared to their peers or counterparts in small-cap or mid-cap stocks. The important point to note is that penny stocks come with inherent risks while investing in it.
