Penny stocks are rebounding this year as benchmarked ETFs like the iShares Micro-Cap ETF (NYSEARCA:IWC) return just below 2%, even if it lags the overall market’s 11% year-to-date return. However, this trend might be shifting as potential rate cuts, and the elimination of weaker penny stocks from the market may now position the surviving micro-caps as leading contenders in their category. Though penny stocks probably shouldn’t be the bulk of your portfolio, strategically selecting for potential 10X penny stocks is a great way to learn underlying fundamentals through practical applications and research.
Nano Nuclear Energy (NNE)
10X penny stock Nano Nuclear Energy (NASDAQ:NNE) has had a wild ride since its public listing on May 13th; shares surged more than 100% at the end of the month before settling around $7.50 per share. That’s nearly double the company’s $4 IPO pricing, indicating big things ahead for the 10X penny stock, particularly considering its pre-revenue status.
As the name implies, the company is developing shipping-crate-sized nuclear reactors to mitigate power and electricity in some areas while offering “surge” assistance in areas needing tons of power quickly. Some of the tech’s commercial application includes crypto mining, data center support, and artificial intelligence €” and, of course, municipal governments may be interested in Nano Nuclear to support post-disaster management (like we’re currently seeing in Texas). The federal government and defense industry likewise have plenty of use for small, compact, and (relatively) cheap portable energy sources.
Nano Nuclear’s management thinks that their developing products could be fully deployable by 2030, though that represents a problem for investors looking at 10X penny stocks €” with minimal revenue projected between now and then, holding the stock for several years could be a lesson in opportunity cost. At the same time, though, there’s clear enthusiasm surrounding the stock as we saw last week. In my mind, the company’s current per-share pricing is a bit steep considering the risks, but I’d look for a buying opportunity around the $6 mark.
The Metals Company (TMC)
I covered 10X penny stock The Metals Company (NASDAQ:TMC) in late April, specifically looking at the company’s inclusion of Steve Jurvetson of SpaceX and Tesla (NASDAQ:TSLA) fame to their governance roster. I also noted that the company’s current burn rate was concerning, as deep-sea metals mining (the company’s focus) is pricy and demands high capital expenditures with limited opportunity for revenue until turning sea exploration into mining operations.
But that may soon change.
At the end of May, the company announced the sector’s first successful battery-grade nickel mining operation. Tested by independent third-party scientists, the Pacific Ocean-sourced raw material can be turned into nickel sulphate, a major battery component. As of today, company management projects that their oceanic stake may hold enough nickel and other metals to meet the production needs for as many as 280 million electric vehicles (that’s as many currently driving on US roadways).
Analysts expect that the company will soon reach break-even status and finally hit a path to profitability next year or by 2026. While that’s a bit far out, it’s a nearer-term 10X penny stock than Nano Nuclear €” and much cheaper to boot.
Akanda (AKAN)
Akanda (NASDAQ:AKAN) stock soared in mid-May, nearly doubling on the heels of an announced and executed 1-for-40 reverse stock split. While reverse splits tend to be bearish indicators of a long-term lack of sustainability, in the case of 10X penny stocks, they’re somewhat par for the course. Moreover, the company’s slim shares outstanding stat, which sits at just 1.92 million, means that Akanda’s stock volatility will likely continue as relatively few traders can move massive share quantities. This volatility, of course, is a recipe for 10X penny stock success, as smart traders can make money both ways by properly placing long or short bets.
On a longer horizon, I wouldn’t call Akanda a solid buy-and-hold penny stock like Nano Nuclear or The Metals Company; while the latter two have a technical moat and are one of just a few penny stocks operating within their respective industries, Akanda’s a small player in a large and rapidly growing cannabis sector. In the long run, Akanda’s best bet is to seek acquisition or merger with a larger cannabis player €” but that doesn’t mean the 10X penny stock isn’t worth actively trading amid all this volatility.
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 that InvestorPlace.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, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.