Penny stocks are a popular stock category for investors who are looking for short-term gains from explosive price changes in the market. These stocks trade at less than US$5 a piece share and hold low market capitalization. And while you can find few penny stocks listed on established exchanges like the NYSE and the LSE, most are listed on the electronic over-the-counter bulletin board (OTCBB) and via private over-the-counter markets group (OTCMG). Here are the three penny stocks to watch out for right now.
Gerdau S/A (NYSE: GGB)
Gerdau is a producer of steel in the Americas. The company's operations span across North and South America. GGB manufactures different types of steel, including structural, slab, rolled, and rebar. With the US on track to revitalize the multi-billion-dollar infrastructure industry, Gerdau is poised to be one of the benefactors of the recently passed infrastructure bill. According to Money Morning, you should pay attention to future valuations to position your investment portfolio accordingly.
eMagin Corporation (NYSE American: EMAN)
eMagin is one of the new stocks on the market that is currently trading for about US$1.08 per share at the time of writing. eMagin is a US company that manufactures electronic parts, including organic LED microdisplays that are commonly integrated into virtual imaging devices and other related products. With the recent shortage in semiconductor chips and the corresponding surge in chip stock prices, EMAN may benefit from these macroeconomic events. The company has also just received a government contract worth US$33 million for their signature AMOLED microdisplays.
Chembio Diagnostics, Inc. (NASDAQ: CEMI)
The CEMI stock has been getting attention, thanks to the ongoing pandemic and various COVID-19 variants that have emerged. Established in 1985, New York-based Chembio specializes in delivering point-of-care diagnostics solutions for efficient detection and diagnosis of infection diseases. At the time of writing, CEMI stock was trading around US$0.83. The stock was trading at US$1.23 at the start of the year.
These are only three of the many penny stocks you can purchase over the counter and through major exchanges. While they may sound attractive from a potential ROI perspective, note that penny stock trading is also a high-risk venture, so make sure you protect your capital by limiting exposure and researching company fundamentals.
Shah Gilani ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When the OEX (options on the Standard & Poor's 100) began trading on March 11, 1983, Shah was working in the pit as a market maker. And along with other traders, he popularized what later became known as the VIX (volatility index). He left Chicago to run the futures and options division of the British banking giant Lloyd's TSB.
Shah went on to originate and run a packaged fixed-income trading desk for Roosevelt & Cross Inc., an old-line New York boutique bond firm, and established that company's listed and OTC trading desks. Shah started another hedge fund in 1999, which he ran until 2003, when he retired to develop land holdings with partners.
Today Shah is the editor of Capital Wave Forecast and Short-Side Fortunes. He also writes our most talked-about publication, an e-letter called Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played, and how to win it.
Shah studied economics and psychology at the University of California, Los Angeles.