If you’re building out a penny stock portfolio, remember to consider a company’s operational prospects and enduring viability carefully. Though many penny stocks to buy now have inherently speculative value propositions, it’s important to steer clear of potential “pump and dump” traps by thoroughly evaluating the practicality and market demand for a company’s products and its capacity for sustained growth.
While certainly speculative, these three penny stocks to buy now have operational prospects that outweigh their shakier standing and lessened liquidity. Better yet, they’re priced to buy, and offer an opportunity to 10x your investment if the stars align in their favor.
Desktop Metal (DM)
A reverse split is rarely a bullish indicator, but in the case of 3D printing stock Desktop Metal (NYSE:DM), it may be the opening move for an imminent resurgence. The company executed a 1-for-10 reverse split at the beginning of June, and since then, prospects have improved considerably, as per-share pricing popped 32% this week alone. However, a range of bullish news items may be the wind that fully lifts Desktop Metal from its long-term slump.
Most notably, Desktop Metal recently added platinum 3D printing to its jewelry production offerings in conjunction with metals science production firm Legor Alloys. Platinum printing, in particular, was a tough nut to crack because of the metal’s “high hardness and melting point,” but the new tech developments promise to allow “all-new, once-impossible designs.” Desktop Metal will show off the new opportunities later this month at a 3D printing industry event, so keep a close eye on the stock in the meantime.
The Metals Company (TMC)
In late April, I looked at The Metals Company’s (NASDAQ:TMC) potential among penny stocks to buy now, highlighting the addition of Steve Jurvetson, known for his involvement with SpaceX and Tesla (NASDAQ:TSLA), to their board. I also looked at the company’s high burn rate as a potential hurdle since deep-sea metals mining requires huge upfront capital with long exploratory and development timelines before generating revenue.
However, recent developments suggest a potential turnaround. In late May, The Metals Company announced a breakthrough in their operations — the first successful extraction of battery-grade nickel from deep-sea sources. Independent third-party evaluations confirmed that the nickel extracted from the Pacific Ocean could be processed into nickel sulfate, a top battery manufacturing component.
Company forecasts indicate that their undersea resources could potentially fulfill the material needs of up to 280 million electric vehicles, equivalent to the current number of vehicles on U.S. roads. Analysts predict a break-even point by next year or 2026. That positions The Metals Company as a compelling near-term investment among penny stocks to buy now and negates much of the concern around the cash flow I previously highlighted.
iRobot (IRBT)
Although iRobot (NASDAQ:IRBT) doesn’t strictly fall into penny stock classification with its per-share pricing around $9, its modest $270 million market cap positions it alongside smaller companies like Desktop Metal and The Metals Company. And, like the other two penny stocks to buy now, iRobot has plenty of latent upside potential that may send the stock surging. Already, iRobot is emerging as a potential standout comeback story this year, poised to generate strong momentum in the robotics sector irrespective of broader market trends.
Interest in iRobot spiked early in the year amid Amazon’s (NASDAQ:AMZN) attempted (and failed) acquisition, largely motivated by iRobot’s extensive patent portfolio and innovative technology despite a slowdown in robotic vacuum sales. This justification underscores the ongoing renaissance in robotics, spotlighting iRobot as a primary player in developing advanced robotics and sensing tech, even if the end product (vacuums) aren’t top sellers. Instead, iRobot’s strength lies in its patent portfolio, as evidenced by its $174 million intangible assets balance.
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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.