The iShares Micro-Cap ETF (NYSEARCA:IWC) has seen a significant 20% increase in the last six months, reflecting optimism among investors seeking higher-risk assets. However, certain indicators suggest a potential correction in risky asset prices may be on the horizon. For example, the Federal Reserve’s announcement of a reduction in its tightening program implies a potential economic slowdown. Additionally, the S&P 500 Volatility Index is currently below its long-term average of 21, indicating a likelihood of mean reversion that could negatively impact high-risk assets.
While my outlook on risky stocks is negative, I anticipate a rebound after a temporary market downturn. If you share my perspective, you may want to consider investing in these three penny stocks after their prices have declined.
Workhorse Group Inc. (WKHS) is an all-electric durable goods producer that specializes in vehicles, drones, software, and advanced infrastructure. Despite a significant decline in its stock value over the past year, an inflection point may be on the horizon in late 2024. Workhorse Group has shown growth potential, with a recent 27.9% year-over-year increase in revenue and a $129 million convertible notes agreement to strengthen its balance sheet and expand its production capacity.
Aris Water Solutions, Inc. (ARIS) is a U.S.-based water recycler with a focus on the oil and gas industry. Despite being an early-stage company, Aris Water Solutions has shown promising results, including a 25.6% year-over-year increase in quarterly revenue and a net profit margin of approximately 12.5%. The company’s operational efficiency and financial strength, combined with a low price-to-earnings-growth ratio, indicate potential for future growth.
Kona Gold Beverage, Inc (KGKG), soon to be known as NuVibe, is a beverage company that specializes in low-calorie energy and hydration drinks. With a three-year compound annual growth rate of 69.14% and a unique market positioning in the healthy energy drinks segment, Kona Gold Beverage has shown success in a competitive market. The company’s acquisition of Surge Distribution and exposure to the cannabis market further enhance its growth prospects.
In conclusion, while these penny stocks may offer potential opportunities for growth, it is important to exercise caution when investing in low-volume stocks. It is advisable to conduct thorough research and consider the risks involved before making any investment decisions.