Penny stocks have a bad rap among traditional Wall Street investors and traders, and with good reason. They trade on Pink Sheets or the OTC Bulletin Board (OTCBB) exchanges that don’t require them to make statutory filings with the SEC. Hence, you’ll most likely be making your trading/investment decisions based on incomplete or inaccurate information.
Nonetheless, not all penny stocks are bad and diligent research could help you uncover some good companies. This piece examines how some penny stocks might hold the future of technology across, Artificial Intelligence, Biotech, Energy, and Blockchain technology.
An undervalued stock is not necessarily a bad stock
Penny stocks typically refer to stocks with share prices trading under $1 per share, but the SEC has expanded the definition to include stocks trading under $5 per share. Some fallen angels, which are previously solid companies whose share prices have crashed below $5 due to market forces beyond their control are automatically lumped in the same category as “penny stocks”.
Also, promising newcomers bringing innovations or inventions to the market are usually lowly-priced in their early development days and they are also painted in the same broad strokes as “penny stocks”.
Interestingly, the mis-categorization of many undervalued stocks as penny stocks are not lost on trading coaches such as Tim Sykes who turned is $12,415 of bar mitzvah gift money into $5 million more by trading penny stocks. What he offers penny stock traders is the experiential knowledge on how to trade penny stocks successfully. The review of his training programs also shows that he lays emphasis on how to use technical, fundamental and pattern, analysis to identify undervalued stocks in the market.
Artificial Intelligence penny stocks
Artificial Intelligence (AI) is a big part of the future. The Idea of AI has gone beyond sci-fi movies into tangible realities within the last decade with practical use in self-driving cars, digital assistants, digital ads, and all things smart. Yet, the world is barely scratching the surface of what is potentially possible as AI continues to become a standard part of everyday living.
Inuvo, trading around $0.75 is an interesting penny stock that provides exposure to the future of AI. The company leverages AI to provide content creation and market analysis services to help brands deliver more targeted advertising. The aim of the company is to use AI to lower the cost-per-action of ad campaigns, finetune targeting, and increase conversion rates.
Biotech penny stocks
Biotechnology is another sector in which penny stocks companies could potentially unleash the future. Currently, biotechnology is responsible for many things including improved crops, drugs, and sustainability. As biotechnology continues to advance, genome editing, synthetic biology, ICT-integrated devices, stem-cell therapy, and metabolic engineering are some of the concepts that will birth a new future.
Conatus Pharmaceuticals is one of the penny stocks in the biotech industry. The company is committed to the development and commercialization of new medical solutions for the treatment and management of unserved/underserved chronic diseases. The company’s in-house CTS-2090 compound is especially promising as an oral active inhibitor of caspase 1 for the treatment of chronic diseases attacking the inflammasome pathways.
Energy penny stocks
The future of energy is tilting towards being renewable and sustainable. Clean energy technologies have risen in prominence during the last two decades with a reduction in the cost of clean energy assets. Also, there have also been significant strides in policy development to promote the adoption of clean energy solutions globally.
Pioneer Power Solutions, Inc, whose stock is trading around $1.04 is one of the companies working on the future of energy. The company develops a wide selection of power generation and distribution solutions in niche markets within the electrical grid industry. Its solutions are used in wind farms, solar farms, residential, and industrial power plants.
Blockchain penny stocks
Blockchain technology came into the limelight with the popularity of Bitcoin and cryptocurrencies in the last decade. Beyond cryptocurrencies, the decentralized nature of blockchain technology has shown significant promise in identity, contracts, supply chain management, and cybersecurity.
Some interesting blockchain penny stocks to watch out for include 360 Blockchain, which is focused on the mining of Ethereum and Zcash. It is also developing blockchain technology for use in other verticals in the U.S. BLOCK Technologies is developing decentralized solutions for niche industries. One of such solutions is Greenstreem, which is a decentralized supply chain management solution for the legal cannabis industry in Canada.
If you find yourself on the right side of an undervalued penny stock, the potential downside is limited to the initial investment but the upside is technically unlimited. Nonetheless, finding the right penny stock to buy might be synonymous with looking for the proverbial needle in a haystack.
You should consult professional financial advisors before making investment decisions, conduct your own due diligence, and understand that the odds of success are due to factors beyond your control.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
4 thoughts on “Penny Stocks Have a Bad Rap but Some of Them May Hold the Future of Technology”
The problem with pink sheets is the lack of trade volume… if you want to unload 100,000 shares, then you are going to be influencing the price of the stock because they only traded 10,000 shares for the day….
Looks like Brian has some penny stocks he’d like you guys to inflate the value of before he dumps them. The future is not nebulous fad technologies like artificial intelligence and block chain, pushed by internet “science” influencers. These terms are insufficiently defined. I can put a feedback loop in any old pile of linear algebra and call it “artificial intelligence.” If anything, these terms serve to lobby for public support and funding on behalf of specific tech sectors. The computer scientists with backgrounds in adaptive algorithms and stats would love for you to hand them a big bag of money for some ill-defined artificial intelligence research.
I still have a pink sheet technology company on my brokerage balance sheet from years ago that went bankrupt to $0/share. There’s no way to remove it for some reason because it’s worth zero dollars.
Pink sheets = Better than bitcoin pump and dump….
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