Table of Contents
Table of Contents
Best Value Penny Stocks
Fastest Growing Penny Stocks
Penny Stocks With the Most Momentum
Advantages of Investing in Penny Stocks
Risks of Investing in Penny Stocks
- Markets News
Mesoblast, SNDL, and Ardelyx are top for value, growth, and momentum respectively
:max_bytes(150000):strip_icc()/IMG_7562-41-f0f4adc0bc1c43e5957c79d35129ff0d.jpg "Top Penny Stocks for Q3 2023 (1)")
:max_bytes(150000):strip_icc()/GettyImages-1495130263-656a75d3995343e680213a5b4f5b10af.jpg "Top Penny Stocks for Q3 2023 (2)")
Toppenny stocks this month include Ardelyx Inc., Snowline Gold Corp., and Qudian Inc., which have all more than doubled in the last year.
Here are the top three penny stocks with the best value, the fastest growth, and the most momentum. All data are as of June 13.
Best Value Penny Stocks
These are the penny stocks with the lowest 12-month trailingprice-to-earnings (P/E)ratio. A low P/E ratio indicates you're paying less for each dollar of profit that could be returned to you in the form of dividends or buybacks.
| Best Value Penny Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing P/E Ratio | |
| Mesoblast Ltd. (MESO) | 3.59 | 584.2 | 0.1 |
| Saturn Oil & Gas Inc. (SOIL.TO) | CA$2.20 | CA$305.0 | 0.4 |
| Cemex S.A.B. de C.V. (CXMSF) | 0.70 | 10,156.0 | 0.7 |
Source:YCharts
- Mesoblast Ltd.: Mesoblast is an Australian company that develops, markets, and distributes regenerative medicines.
- Saturn Oil & Gas Inc.: Saturn Oil & Gas acquires and explores natural gas and oil properties in western Canada. As of June 15, the company is now listed on the main board of the Toronto Stock Exchange (TSX) under the ticker symbol SOIL.TO. It had previously traded on the TSX Ventrue Exchange.
- Cemex S.A.B de C.V.: Located in Mexico, Cemex produces building materials such as ready-mix concrete, asphalt products, roofing tiles, drainage basin barriers, and concrete pipes for sewer systems. In early May, Cemex reported first-quarter results; net income surged by 42%, and total revenue grew by 8% compared with the previous year. A major role in recentEBITDAgrowth is Cemex's investment in their Urbanization Solutions business.
Fastest Growing Penny Stocks
These are the top penny stocks as ranked by agrowthmodel that scores companies based on a 50/50 weighting of their year-over-yearrevenueand earnings-per-share (EPS) growth in the most recent quarter.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax laws or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest Growing Penny Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($M) | EPS Growth (%) | Revenue Growth (%) | |
| SNDL Inc. (SNDL) | 1.44 | 374.4 | N/A (See company description) | 978 |
| LexinFintech Holdings Ltd. (LX) | 2.40 | 391.3 | 307 | 62 |
| WAVE Life Sciences Ltd. (WVE) | 4.22 | 415.1 | N/A (See company description) | 639 |
Source:YCharts
- SNDL Inc.: SNDL is one of Canada's largest private-sector liquor and cannabis retailers. It also cultivates and processes cannabis for sale under the Sundial, Top Leaf, Palmetto, and Grasslands brands, among others. SNDL's net revenue grew more than 1,000% year-over-year in the first quarter due to its acquisition of the Alcanna, Valens, and Zenabis brands in 2022. Net loss for the quarter shrank 5% compared with the previous year. On June 6, SNDL appointed Alberto Paredero-Quiros as CFO, effective July 1, following the retirement of the current CFO, Jim Keough. Note SNDL Inc. doesn't have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
- LexinFintech Holdings Ltd.:LexinFintech operates online financial services in China. In the first quarter, LexinFintech's net income quadrupled from the prior-year quarter. The company's loan origination business grew by 41%, and its registered user base increased by 14% compared to the previous year.
- WAVE Life Sciences Ltd.: WAVE Life Science is a company based in Singapore that develops medicines for the treatment of genetic disorders. Note WAVE Life Sciences doesn't have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
Penny Stocks With the Most Momentum
These are the penny stocks that had the highest total return over the past 12 months.
| Penny Stocks With the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing Total Return (%) | |
| Ardelyx Inc. (ARDX) | 4.06 | 870.7 | 660 |
| Snowline Gold Corp. (SGD.CN) | CA$3.23 | CA$451.6 | 271 |
| Qudian Inc. (QD) | 1.92 | 431.8 | 167 |
| Russell 1000 Index | N/A | N/A | 10 |
| Russell 2000 Index | N/A | N/A | 5 |
Source:YCharts
- Ardelyx Inc.: Ardelyx produces medications for individuals with gastrointestinal diseases. Its primary product is Ibsrela, an oral medication to help treat irritable bowel syndrome that was launched in March 2022.
- Snowline Gold Corp.: Snowline is a Canadian mining company that explores and develops gold-producing properties in the Yukon.
- Qudian Inc.:Qudian is a Chinese company that provides online consumer credit solutions. The company's total revenue declined 89% year-over-year in the first quarter, primarily due to the winding down of its loan book business. Qudian's share price dropped by 14% after reporting its first-quarter results, but it's still up more than 100% in the last year.
Advantages of Investing in Penny Stocks
Potential for High Returns: Most penny stocks have tiny market capitalizations, meaning it takes a small amount of money to move their share price substantially. Therefore, positive news, such as signing on a major customer or forming a new strategic alliance, can lead to sizeable returns before the mainstream investing world discovers the stock. Conversely, negative news can lead to significant losses.
Leverage: Penny stocks attract investors with a small amount of trading capital as their lower share prices allow them to buy thousands of shares. For example, if an investor has $500 to invest, they can purchase 2,000 shares of a penny stock trading at 25 cents. If that stock doubles over a month, the investor makes a quick 100% return on their investment. However, with the same starting capital, the investor could afford only a small number of shares in most stocks, making it almost impossible to achieve those gains over the same period.
Risks of Investing in Penny Stocks
Low Liquidity: Penny stocks often trade on thin volume, meaning it can be difficult for investors to enter and exit their positions. Moreover, these stocks typically have a wide spread between the bid and ask, which increases trading costs. For example, if a penny stock has a bid price of $1.00 and an ask price of $1.50, a trader wanting to buy at market gets caught paying a 50 cent per share premium. Therefore, investors should use limit orders to minimize trading costs when buying and selling penny stocks.
Extreme Valuations: Penny stocks that start moving rapidly higher in price show up on stock screeners and may even get media attention. This often attracts more speculators who push prices up even higher, leading to unsustainable valuations. For instance, during the dotcom bubble in the late 1990s, many penny technology stocks doubled and tripled in price despite not generating any earnings. However, when the market turned bearish a few years later, many Nasdaq-listed penny stocks with unsustainable valuations fell substantially or were delisted.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read ourwarranty and liability disclaimerfor more info.
As of the date this article was written, the author does not own any of the above stocks.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
Saturn Oil & Gas Inc. "Saturn Oil & Gas Announces Graduation to the Toronto Stock Exchange."
Cemex S.A.B. de C.V. "Cemex reports solid growth in Sales and EBITDA, while marking important inflection point in margin recovery." Pg. 7
SNDL Inc. "SNDL Reports First Quarter 2023 Financial and Operational Results."
SNDL Inc. "SNDL Appoints New Chief Financial Officer."
LexinFintech Holdings Ltd. "LexinFintech Holdings Ltd. Reports First Quarter Unaudited Financial Results."
WAVE Life Sciences Ltd. "Wave Life Sciences Reports First Quarter 2023 Financial Results and Business Update."
Qudian Inc. "Qudian Inc. Reports First Quarter 2023 Unaudited Financial Results."
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