The 7 Best Penny Stocks Under $1 to Buy Now
Despite warnings, investors still gravitate toward the realm of speculation, thereby necessitating a discussion about the best penny stocks under $1 to buy. To be clear, you don’t want to participate with any funds which you can’t afford to lose. By nature, these market ideas feature incredible risk and volatility.
At the same time, not all speculative ventures are the same. Some incredibly low-priced securities do feature solid financials. We’re talking on a relative basis of course. Nevertheless, the concept of the best penny stocks under $1 to buy isn’t just a cheap marketing gimmick. These ideas do carry some fundamental justification.
Each of the names below are undervalued either based on proprietary calculations or traditional metrics. In addition, they feature a low-risk profile – again, speaking relatively. So, if you’re ready to get adventurous, these are the best penny stocks under $1 to buy.
Profire Energy (PFIE)
An oilfield technology firm, Profire Energy (NASDAQ:PFIE) specializes in the design of burner-management systems and other combustion-management technologies. Notably, it’s the only exchange-traded security on this list of best penny stocks under $1. Beyond this point, the other ideas trade over the counter. Currently, PFIE trades hands at 93 cents a share. It’s lost 13% on a year-to-date basis.
Fundamentally, one of the strongest arguments for PFIE centers on relevance. Due to geopolitical flashpoints, global gas and oil supplies are depleted. Further, Profire stands relatively insulated from economic pressures as energy commands inelastic demand. In other words, societies must consume a baseline of energy, irrespective of economic forces.
However, Profire doesn’t just bank entirely on outside fundamentals. For instance, it features a stout balance sheet, highlighted by a cash-to-debt ratio of 53.3 times. In sharp contrast, the industry median ratio sits at a lowly 0.5 times.
Parks! America (PRKA)
Based in Pine Mountain, Georgia, Parks! America (OTCMKTS:PRKA) bills itself as one of the fastest-growing animal park brands. Primarily, the company attracts visitors because of its drive-through business model, enabling people to feed various wildlife. Currently, the company commands a market capitalization of $26.3 million. Shares trade hands for 35 cents a pop. They’ve lost over 44% of equity value since the beginning of the year.
According to Gurufocus.com, Parks! America features a modestly undervalued business. Its Shiller price-earnings ratio pings at 11.52 times, rating well below the industry median of 21.2 times. Also, its price-to-projected free cash flow is 0.8 times, below the industry median of 1.17.
However, the highlight for PRKA centers on its income statement-related performance metrics. For instance, its three-year revenue growth rates stands at 24.9%, ranking better than nearly 94% of its peers. Its net margin is 9.2%, ranking better than almost 72% of its peers. Combined with a solidly stable balance sheet, PRKA is one of the best penny stocks under $1 to buy.
Integrated Biopharma (INBP)
Based in Hillside, New Jersey, Integrated Biopharma (OTCMKTS:INBP) engages primarily in the manufacturing, distributing, marketing and sales of vitamins, nutritional supplements, and herbal products. Presently, Integrated Biopharma carries a market cap of $12.9 million. Average trading volume sits below 4,000 shares, reflecting low liquidity. Since the start of the year, INBP – which trades hands at 43 cents – fell 60%.
Understandably, the headline numbers for INBP may scream “sell!” However, according to the financial data compiled by Gurufocus.com, INBP is a significantly undervalued investment. For instance, its P/E ratio is 3.3 times, well below the industry median of 17.1 times. As well, its price-to-sales ratio is 0.26 times, far below the industry median of 0.99 times.
However, the main attraction for INBP centers on its high-quality business. At the moment, Integrated Biopharma’s return on equity stands at 23.7%, ranked better than 89.5% of the industry. Plus, it has decent strengths in the balance sheet, including an equity-to-asset ratio of 0.74 times that’s above 80% of its peers. So, based on the evidence, INBP rates as one of the best penny stocks under $1.
Based in Ontario, Canada, NamSys (OTCMKTS:NMYSF) is a fully integrated cash management software. It claims to put control in the users’ hands and cost savings in the bank. Currently, NamSys features a market cap of 16.9 million CAD (roughly translating to $12.4 million). Average trading volume is only 416 shares. Since the start of the year, NMYSF – which trades hands at 49 cents a pop – fell about 12%.
Though seemingly a sketchy organization, Gurufocus.com assesses NamSys as a significantly undervalued business. At the moment, NMYSF trades at 13.7 times trailing earnings. However, the industry median is 24.2 times. Further, NamSys’ price-to-FCF is 11 times, well below the sector median of 21.6 times.
If these stats weren’t enough to get you thinking about the cash management firm, the company’s balance sheet should appeal. Mainly, NamSys carries zero debt on its books, affording it significant flexibility during these uncertain times. Also, its Altman Z-Score rates at a stratospheric 17 points, reflecting extremely low bankruptcy risk. Therefore, NMYSF represents one of the best penny stocks under $1 to buy.
Western Forest Products (WFSTF)
Based in Vancouver, British Columbia, Western Forest Products (OTCMKTS:WFSTF) is a lumber company. Per its website, Western Forest manufactures high-quality wood products and sustainably manages forests. Presently, the company carries a market cap of $290 million. Shares feature an average trading volume of 21,000. Since the January opener, WFSTF – which trades hands for 89 cents a pop – fell nearly 47%.
As with many other of the best penny stocks under $1 on this list, Gurufocus.com labels Western Forest significantly undervalued. For example, it carries a forward P/E ratio of 5.4 times, well below the industry median of 8 times. Also, its price-to-sales ratio is 0.28 times, rated better than nearly 83% of the competition.
However, Western Front’s main spotlight arguably centers on its balance sheet. The company enjoys a strong cash balance, with a cash-to-debt ratio of 4.58 times. This ranks above 84% of its peers.
Vertu Motors (VTMTF)
Based in the United Kingdom, Vertu Motors (OTCMKTS:VTMTF) represents a car dealership group. Though the sector faces significant pressures due to inflation and other macroeconomic headwinds, people must have transportation. Currently, Vertu carries a market cap of about $181 million.
Average trading volume for VTMTF is just under 3,000 shares. At time of writing, VTMTF trades hands at 48 cents per share. Since the beginning of this year, Vertu dropped 47% of market value.
Notably, Vertu features a modestly undervalued profile based on traditional metrics. Its forward P/E ratio sits just underneath 5 times. In contrast, the industry median is 8.7 times. As well, its price-to-sales ratio is only 0.04 times, ranking below 99% of its peers.
However, the main highlight for Vertu centers on its growth metrics. In particular, its three-year FCF growth rate stands at 45.6 times, above 87% of the competition. Thus, it makes a reasonable case for best penny stocks under $1 to buy.
Alkane Resources (ALKEF)
Based in Australia, Alkane Resources (OTCMKTS:ALKEF) stands poised to become its nation’s next multi-mine gold producer, per its website. Predominantly, Alkane’s projects concentrate in Australia’s central west region. Average trading volume is only 3,100 shares. Currently, the company commands a market cap of roughly $281 million. ALKEF trades hands for 45 cents a pop. It’s lost almost 33% YTD.
Despite its volatility and questionable relevance (as global central banks attempt to reduce money supply), Alkane Resources attracts contrarians for its overall solid financial profile. For instance, on the income statement, the company commands a three-year revenue growth rate of 20.8%, better than 79% of its peers. On the bottom line, the company has a net margin of 42.6%, better than 93% of the sector.
Just as importantly, Alkane enjoys a stable balance sheet. Its Altman Z-Score is 4.7 points, reflecting low bankruptcy risk. If you’re in the speculative mood, ALKEF could make for an intriguing play among the best penny stocks under $1.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.