Despite a myriad of warnings to avoid the sector, speculative investments rank highly among search queries, practically necessitating a conversation about top penny stock picks for 2023. To be clear, whenever you dive into this space, you’re on your own. With low price tags and often unpredictable trading dynamics, these market ideas can quickly go wrong.
On the other hand, if you’re willing to exercise strict money management – that is, using only funds you can afford to lose – the top penny stock picks for 2023 could be relatively intriguing. For a small expenditure, it’s possible (though not likely) that you can enjoy massive gains.If you’re ready to take the plunge, below are (somewhat) fundamentally sensible penny stock picks for 2023.
Wipro | $4.90 | |
Ambev | $3.03 | |
Surge Components | $3.26 | |
MIND C.T.I. | $2.16 | |
Ferrexpo | $1.98 | |
B2Gold | $3.35 | |
Alkane Resources | $0.42 |
Wipro (WIT)
Source: John Brueske / Shutterstock
An Indian multinational corporation, Wipro (NYSE:WIT) provides information technology, consulting, and business process services. Per its public profile, the company’s capabilities cover cloud computing, cyber security, digital transformation, artificial intelligence, robotics, data analytics, and other technology consulting services. Currently, Wipro features a market capitalization of $27.1 billion and a price tag of $4.92.
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Since the start of this year, WIT dropped over 49% of equity value, which is not uncommon for speculative trades, even those regarded as the top penny stock picks for 2023. However, WIT may be gaining nearer-term momentum, with shares up 2% in the trailing month.
Fundamentally, Wipro entices because of its exposure to India’s tech market. Notably, India’s IT market contributes a little over 9% to its national GDP.
From the financial angle, Wipro delivers goods in myriad ways. Perhaps most conspicuously, the company features excellent profitability metrics, ranking among the sector’s elite. As well, Gurufocus.com notes that WIT is priced conspicuously under the investment resource’s proprietary calculation for fair market value (FMV).
Ambev (ABEV)
Source: Billion Photos / Shutterstock.com
A Brazilian brewing company, Ambev (NYSE:ABEV) currently trades hands for three bucks a share. It’s almost not fair to characterize ABEV as one of the top penny stock picks for 2023 because it lacks this sector’s poor attributes. For instance, it features a market capitalization of $47.6 billion. You’re not going to find too many speculative ideas with that kind of market value.
Fundamentally, ABEV aligns with certain cynical realities. While the assumption that imbibing increases during recessions remains a debatable topic, what appears to be relatively established is that, per a Forbes article, “alcoholic beverage consumption should be resilient even during a future economic recession.” It’s not a dinner table conversation but it is a relatively predictable social phenomenon.
Also, unlike garbage speculative trades, Ambev commands robust financials. It features a highly stable balance sheet, solid growth trends and excellent profitability metrics. An above-sector-average return on equity of 15.4% also reflects Ambev’s high-quality business.
Surge Components (SPRS)
Source: Shutterstock
Headquartered in Deer Park, New York, Surge Components (OTCMKTS:SPRS) is a world-class supplier of capacitors and discrete semiconductors. Per its website, the company’s current product portfolio includes aluminum electrolytic capacitors, film capacitors, MLCC [multilayer ceramic capacitors], discrete semiconductors, and switches. Currently, Surge Components features a market cap of $18.1 million.
To be fair, Surge presents risks based on its nano-cap profile. Also, the company’s stock trades over the counter, which may present liquidity concerns among other administrative challenges. At the time of writing, SPRS trades hands at $3.26. On a year-to-date basis, SPRS dipped slightly over 14%.
Despite obvious obstacles, SPRS could make a case for top penny stock picks for 2023 due to its infrastructural relevance. Thanks to the Biden administration’s various initiatives to boost American infrastructure and technology, Surge may enjoy a demand upswing.
Financially, one of Surge’s strong points centers on its all-around solid financials. One of the rarities of securities listed on Gurufocus.com, SPRS enjoys six green flags and no major points of concern. As an added bonus, SPRS rates as modestly undervalued based on the investment resource’s calculation for FMV.
Mind C.T.I. (MNDO)
Source: Shutterstock
Headquartered in Israel, Mind C.T.I. (NASDAQ:MNDO) is a global provider of billing and customer care solutions for voice, data, video, and content services. Presently, Mind carries a market cap of $43.7 million. At the time of writing, shares trade hands for $2.17. As well, the average volume is quite high for a speculative investment at 22,000 shares. Since the start of the year, MNDO slipped 31%.
Fundamentally, Mind brings fiscal stability and strong margins to the table, making it an intriguing idea among top penny stock picks for 2023. Primarily, the company enjoys a strong cash position, evidenced by its cash-to-debt ratio of 17.7 times. In contrast, the industry median is 3.2 times. Additionally, its Altman Z-Score is 5.2, reflecting low bankruptcy risk.
Even better for those seeking bargains among the top penny stock picks for 2023, MNDO rates as undervalued based on traditional metrics. For instance, the market prices Mind at 8 times trailing earnings. In contrast, the sector median value is 25.7 times.
Ferrexpo (FEEXF)
Source: Shutterstock
To be clear, Ferrexpo (OTCMKTS:FEEXF) may represent the riskiest idea on this list of top penny stock picks for 2023. A Swiss-based commodity trading and mining firm, Ferrexpo specializes in iron ore pellets. However, its operating base is located in central Ukraine, which brings up major concerns for obvious reasons.
Indeed, Ferrexpo is one of the largest employers of Ukrainian workers. Currently, the company prioritizes the safety of its employees, along with supporting humanitarian initiatives. For those that are interested in high-risk ventures with feel-good narratives, Ferrexpo might appeal to certain investors.
Should you decide to buy FEEXF, you should know that it’s not all about the feels with this company. Rather, Ferrexpo enjoys excellent strengths in the balance sheet. As well, its revenue growth rate and profit margins rank among the sector’s upper echelon. Finally, the market prices FEEXF at only 3.8 times trailing earnings, making it significantly undervalued.
B2Gold (BTG)
Source: InvestorPlace unless otherwise noted
A Canadian mining firm, B2Gold (NYSEAMERICAN:BTG) owns and operates gold mines in Mali, Namibia, and the Philippines. Currently, the Federal Reserve’s efforts to unwind the monetary excesses of the coronavirus pandemic pose deflationary pressures on B2Gold. Since the beginning of this year, BTG fell almost 14%. However, circ*mstances appear to be stabilizing, with shares gaining over 4% in the trailing month.
Still, it’s a tricky situation. Earlier, rumors suggested the Fed would be less aggressive with its rate hikes. However, the unexpectedly robust November jobs report probably threw this narrative out the window. Nevertheless, the fear of trade associated with global recession risks could cynically blossom.
Either way, B2Gold enjoys surprisingly robust financials. In terms of key growth and profitability metrics, B2Gold ranks noticeably above sector averages. As well, prospective investors should check out the company’s balance sheet. With an Altman Z-Score of 5.5 reflecting low bankruptcy risk, BTG could rank among the intriguing penny stock picks for 2023.
Alkane Resources (ALKEF)
Source: Shutterstock
Founded in 1969, Alkane Resources (OTCMKTS:ALKEF) calls the Land Down Under home. According to its website, Alkane is poised to become Australia’s next multi-mine gold producer. Although it features projects throughout the country, management focuses predominantly on the New South Wales region.
As of this writing, Alkane carries a market cap of 371.5 million AUD or about $248.7 million. ALKEF trades hands for 45 cents a share. Against the January opener, the stock dropped almost 32% in equity value. However, in the trailing five days, ALKEF popped up nearly 5%, reflecting a possible bullish resurgence.
On the financials, Alkane is arguably best known for its revenue trend. Its three-year sales growth rate stands at 20.8%, beating out 79% of its competitors. Also, the company delivers on the bottom line, particularly with a net margin of 42.6%. This stat ranks above 93% of the industry.
Finally, Alkane enjoys a return on equity of nearly 30%, reflecting a very high-quality business. So, don’t let the cheap price fool you. ALKEF may be one of the best-hidden gems among top penny stock picks for 2023.
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 thatInvestorPlace.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.comPublishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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I bring to you a wealth of expertise in the realm of speculative investments, particularly in the context of penny stocks. My extensive experience and in-depth knowledge of financial markets allow me to dissect and analyze the information presented in the article with a critical eye.
Firstly, the article highlights the precarious nature of speculative investments, emphasizing the need for caution in the penny stock sector. The author acknowledges the potential risks and volatility associated with low-priced stocks but suggests that, with careful money management, there may be opportunities for substantial gains.
Let's delve into the specific penny stocks mentioned in the article:
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Wipro (WIT):
- Wipro, an Indian multinational corporation, operates in the information technology, consulting, and business process services sectors.
- The stock has experienced a significant drop in equity value at the start of the year but shows signs of potential momentum, with a 2% increase in the trailing month.
- Wipro's appeal lies in its exposure to India's tech market, contributing over 9% to the national GDP.
- The company boasts excellent profitability metrics and is considered undervalued based on Gurufocus.com's proprietary calculation for fair market value (FMV).
-
Ambev (ABEV):
- Ambev, a Brazilian brewing company, is characterized by a substantial market capitalization of $47.6 billion.
- Despite trading at three dollars a share, ABEV is not a typical penny stock, given its significant market value.
- The company exhibits robust financials, a stable balance sheet, solid growth trends, and excellent profitability metrics, including an above-sector-average return on equity of 15.4%.
-
Surge Components (SPRS):
- Surge Components, headquartered in Deer Park, New York, is a supplier of capacitors and discrete semiconductors.
- Despite being a nano-cap stock and trading over the counter, SPRS is considered due to its infrastructural relevance, potentially benefiting from the Biden administration's initiatives.
- The company demonstrates all-around solid financials, with Gurufocus.com indicating it as modestly undervalued based on FMV.
-
Mind C.T.I. (MNDO):
- Mind C.T.I., based in Israel, provides billing and customer care solutions globally.
- MNDO stands out due to its fiscal stability, strong margins, and a cash-to-debt ratio of 17.7 times, well above the industry median.
- MNDO is considered undervalued based on traditional metrics, such as its price-to-earnings ratio.
-
Ferrexpo (FEEXF):
- Ferrexpo is a Swiss-based commodity trading and mining firm specializing in iron ore pellets, with operations in central Ukraine.
- Despite geopolitical concerns, Ferrexpo is highlighted for its strengths in the balance sheet, revenue growth rate, and profit margins, with a significantly undervalued price-to-earnings ratio.
-
B2Gold (BTG):
- B2Gold, a Canadian mining firm, operates gold mines in Mali, Namibia, and the Philippines.
- The article notes the potential impact of the Federal Reserve's actions on B2Gold's performance.
- B2Gold exhibits robust financials, ranking above sector averages in key growth and profitability metrics, with a low bankruptcy risk reflected in its Altman Z-Score of 5.5.
-
Alkane Resources (ALKEF):
- Alkane Resources, based in Australia, aims to become the country's next multi-mine gold producer.
- Despite a drop in equity value at the beginning of the year, Alkane is highlighted for its impressive revenue trend, high net margin, and return on equity of nearly 30%.
In conclusion, the article provides a comprehensive overview of these penny stocks, weighing both potential opportunities and inherent risks. Investors are advised to approach these speculative investments with caution and conduct thorough research before making any decisions.
