What are Penny Stocks and Are they Worth Investing In?

What are penny stocks and are they worth investing in?

They are absolutely worth investing in.  And if you’re unfamiliar, penny stocks are typically stocks that trade for less than $5.00 a share.

Personally, I love penny stocks as those are the stocks that have made me the most money in my 20+ year career.

Perhaps the most profitable penny stock I ever recommended was Canopy Growth Corporation (TSX: WEED).  This was a $1.60 cannabis stock that delivered gains in excess of 3,000%.  Those who took my advice and bought the stock made an absolute fortune.  A one-time investment of $20,000 was worth more than a half million dollars by the time I told folks to sell.

So as you can imagine, I’m not opposed to investing in penny stocks at all.

What are Penny Stocks and are they worth investing in?  You better believe it!

Penny stocks often get a bad rap.

Mostly because a lot of people have lost a lot of money by investing in penny stocks that weren’t properly vetted.  But if your due diligence is sound, penny stocks can make you insanely wealthy.

Consider Monster Beverage Corporation (NASDAQ: MNST).  The energy drink company that was trading for $0.45 in 2005.  Earlier this year, the stock hit $61 a share.  That’s a gain of 13,455%.  A one-time investment of just $10,000 is now worth more than $1.3 million.

Other penny stocks that have made everyday investors incredibly rich include:

• Ford Motor Company (NYSE: F) — Gains as high as 1,066%
• Micron Technology (NASDAQ: MU) — Gains as high as 28,788%
• Qualcomm (NASDAQ: QCOM) — Gains as high as 42,191%
  

Of course, not all penny stocks work out this way.  Most don’t, actually.  But this should not dissuade you from investing in penny stocks.  In fact, I’m incredibly bullish right now on a penny stock called Silvercorp Metals (NYSE: SVM).  I told you about this stock last week, actually.

Here’s a snippet from that article…

Silver has long been a metal used equally for industrial purposes and investment-grade categories (i.e., coins, jewelry, etc.).  But that 50/50 balance is changing.  In fact, industrial demand for silver now represents about 60% of total silver demand.  And this figure is likely to continue growing as a result of rapidly growing markets that require large amounts of silver to operate. 

From solar panels and EVs to AI and cryptocurrency, these markets are heavily reliant on a steady supply of silver.  These are also markets that have guaranteed growth for the foreseeable future. 

Couple that with the fact that silver has always been considered a safe haven asset in times of uncertainty.  And indeed, these are times of uncertainty.  Most recently with the fall of Assaad, which a lot of folks believe presents a new powder keg for the Middle East.  Something that can only exacerbate the already heightened tensions in Israel, Lebanon, and Iran.

Then consider the Ukraine crisis, increased cyber attacks on the U.S. from both China and Russia, the global immigration crisis, the China-Taiwan conflict, the continued increase in extreme weather events, nuclear threats from Russia and North Korea, social unrest in Europe and Africa, and a rise in food insecurity in Latin America.

There’s certainly no shortage of crises in the world today.  And while I’d be lying if I said all of these crisis situations didn’t concern me — both from a moral perspective and a global security perspective — it would be foolish to ignore the fact that these crises are also adding to the value of silver as we head into 2025.

So beyond just owning physical silver, you should also have some exposure to silver stocks as we head into 2025.  My favorite right now is Silvercorp Metals (NYSE: SVM).  After doing a $130 million private placement last month, the stock fell into oversold territory.  It’s now trading at a significant discount.  And as an added bonus, it has no debt and about $200 million in cash and short-term investments.  At these levels, it’s a steal.

Of course, I don’t expect SVM to deliver quadruple-digit gains.  It’s just not that kind of stock.  But based on where it’s trading now, I see no reason why it can’t at least double inside of 2 years. 

Another stock that I believe will double within 2 years is this cryptocurrency stock.  Also known as the Bitcoin Loophole Strategy stock, this is actually one of the easiest, safest and most profitable ways to play the crypto market.  Because this stock doesn’t involve buying Bitcoin, but instead, directly profiting from the company behind bitcoin transactions. 

Worth noting, this too was once a penny stock.  Less than five years ago, it was trading for $2.00 a share. Today, it trades for around $20 bucks a share.  And it’s still undervalued by more than 162%. 

Although it’s no longer a penny stock, this thing still has a lot of steam left, and we are definitely buyers at these levels.  I would recommend you buy some for yourself, too.  Particularly now, as cryptocurrency prices continue to soar.  

To a new way of life and a new generation of wealth…

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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