Some companies end up as penny stocks and are listed on the over-the-counter exchange for various reasons. The market can push down these companies due to market forces, which is the case for these three penny stocks to consider buying.
For those who believe that certain sectors have been hit too hard and may see a recovery in the coming years, it is important to assess which companies could withstand whatever challenges lie ahead. Penny stocks in these sectors have the potential to benefit the most from a shift in market sentiment towards growth.
These three penny stocks are speculative investments, but they are worth considering for those looking to add a more speculative element to their portfolio.
Surge Battery Metals (NILIF)
Lithium Americas’ (NYSE: LAC) market capitalization of $610 million is significantly lower than the estimated $5.7 billion after-tax net present value of the Thacker Pass asset. The asset is expected to generate strong EBITDA and cash flows once production begins in 2027. The U.S. Department of Energy provisionally agreed to a $2.26 billion loan for the company in 2024, indicating confidence in the company’s ability to cover the loan in case of default.
Legacy automakers are expanding their electric vehicle plans, leading to increased demand for lithium. This trend has benefited speculative stocks like Lithium Americas, which is currently operating without revenue. The company has recently partnered with Ganfeng Lithium in Argentina and received $650 million from General Motors (NYSE: GM) for its Nevada project. However, caution is advised when investing in such speculative ventures. Lithium Americas raised $275 million through equity dilution to ensure the completion of the project on schedule.
It is important to note that InvestorPlace does not typically cover companies with a market cap of less than $100 million or those that trade less than 100,000 shares daily, as these “penny stocks” can be risky investments. It is crucial for investors to be aware of the risks associated with low-volume stocks.
Overall, these three penny stocks present potential opportunities for investors looking to add speculative assets to their portfolio.