Over the past 21 months, penny stocks have gained significant attention. The pandemic, market downturn, and retail investors' desire for volatility have contributed to the popularity of these low-priced stocks. One reason for their appeal is the potential upside they offer. Additionally, many well-known companies saw their stock prices drop below $5, introducing a new group of investors to the world of cheap stocks. Vaccine stocks, GameStop, and Nio Inc. are examples of companies that experienced significant recoveries, fueling traders' hunger for more opportunities.
Before diving into a list of penny stocks, it's important to understand what they are. According to the Securities and Exchange Commission, penny stocks are shares of companies trading for less than $5. While some traders may have their own definitions, this article will use the SEC's threshold. It's crucial to note that these stocks are highly risky. Not all penny stocks will see substantial gains, and some companies may even fail entirely. However, volatility can present opportunities for those who understand how to trade properly. The past nine months have been particularly favorable for penny stocks, with some turning a $500 investment into nearly $10,000. Now, let's explore some of the top penny stocks in 2021 so far.
One category of penny stocks that have performed well this year are "meme stocks." These companies have gained popularity among retail traders and have become the focus of discussions on social media platforms like Reddit, Twitter, and Facebook. While their names may vary, these stocks share certain characteristics that offer both risk and reward. The main driving force behind their success is the large audience discussing and posting about them. However, traders are now questioning whether these stocks are still the best ones to invest in.
Ferroglobe Plc (NASDAQ:GSM) is a penny stock that has benefited from the clean energy trend. The company provides silicon metal and specialty alloys to various markets, including solar, automotive, consumer products, construction, and energy. With the increasing demand in these industries, Ferroglobe has experienced a successful year, reaching fresh 52-week highs. The company's strong earnings per share growth and sales growth have contributed to its performance.
Moxian Inc. (NASDAQ:MOXC) has also seen a significant increase in its stock price this year. The company focuses on targeted advertising campaigns and promotions to attract potential customers for its clients. As reopening trends have taken hold, Moxian's digital advertising suite has gained traction across multiple platforms, including mobile phones and smart TVs.
Vinco Ventures (NASDAQ:BBIG) is another penny stock that has gained attention recently. The company's pending merger and proposed acquisition of a TikTok competitor in Asia, Lomotif, have contributed to its popularity. Vinco Ventures achieved a record number of Monthly Active Users (MAUs) and launched a platinum-selling album on the blockchain.
Peabody Energy (NYSE:BTU) stands out among penny stocks as an energy company that focuses on coal production. Despite being considered "dirty energy," the company aims to provide fuel for electricity and create steel for infrastructure development. Peabody's growth in the past quarter has boosted sentiment among analysts, leading to increased bullishness.
AMC Entertainment (NYSE:AMC) has become a symbol of the rise of retail traders in the penny stock market. Starting the year at $2.20 per share, AMC saw a massive surge to highs of $72.62. Although the stock has pulled back, it is still up nearly 2,100% year-to-date. The company's strong performance is attributed to its cult following and the return of moviegoers to theaters.
While these examples show the potential for significant gains in penny stocks, it's important to note that not all penny stocks will perform as well. However, there are numerous penny stocks that experience double and triple-digit moves daily. Understanding how to trade and profit from the market's offerings is crucial for success in this volatile sector.
Overall, penny stocks can be worth it if approached with caution and a thorough understanding of the market. While not all penny stocks will yield substantial returns, there are opportunities for those who know how to navigate this sector. The hypothetical example provided in this article demonstrates the potential for significant gains in a short period. However, it's important to conduct thorough research and make informed decisions when investing in penny stocks.