A penny stock is known as stock of a small company or a business that trades under $5 per share. In spite of their cheap value, these stocks often trade smaller amount of shares than their exclusive competitors. Though some companies trade penny stocks on significant exchanges such as the New York Stock Exchange (NYSE), the majority trade socks over-the-counter (OTC) consuming either the electronic OTC Bulletin Board (OTCBB) or the privately held OTC Markets Group.
OTC trades don't take place on a trading floor. Additionally, all quotations are generated digitally.
Top Penny Stocks for 2022
Best penny stocks for December 2022 include ADMA Biologics Inc., Nordic American Tankers Ltd., and Borr Drilling Ltd., which have approximately doubled in value over the last year.
Due to increased sales of its therapies for people with weakened immune systems and immunological suppression, ADMA Biologics had a spike in revenue that more than quadrupled in the most recent quarter.
Due to the significant variations in individual company performance, investment in penny stocks can sometimes be risky. They also primarily engage in over-the-counter (OTC) trading, which results in greater trading expenses. An approximate benchmark for penny stocks, the Russell 2000 Index, has declined 19% over the past year as opposed to the Russell 1000's 15% decline.
Here is the top penny stocks list for December 2022.
Safe Bulkers Inc. (SB)
Price: $2.90
Market Cap: $344.7 M
12 months Trailing P/E Ratio: 1.8
Safe Bulkers (SB) transports commodities like iron ore, grain, and coal across international maritime lanes. In November, the corporation announced that third-quarter net earnings had decreased year over year as a result of COVID-19 operational delays, particularly crew repatriation.
Ring Energy Inc. (REI)
Price: $2.90
Market Cap: $344.7 M
12 months Trailing P/E Ratio: 1.8
EPS Growth: 308.3%
Revenue Growth: 91.2%
In Texas and New Mexico, Ring Energy (REI) generates, develops, and carries out oil and natural gas exploration. Sales volumes increased in the third quarter, and the acquisition of Stronghold Energy led to almost double-fold increase in revenues and a more than five-fold surge in net earnings.
Altice USA Inc. (ATUS)
Price: $2.89
Market Cap: $504.1 M
12 months Trailing P/E Ratio: 2.7
Altice USA Inc. (ATUS) is a holding corporation that primarily provides broadband communications. Altice also offers video services under the brands SuddenLink and Optimum through subsidiaries.
Condulent Inc. (CNDT)
Price: $3.92
Market Cap: $846.4 M
EPS Growth: 50.0%
Revenue Growth: -5.9%
Conduent provides human resource management and other business services to clients in the transportation, industrial, and public sectors, along with more than 500 government organizations. BenePath Suite, a cloud-based technology that the company just introduced, aims to streamline the application and enrollment processes for government aid and social welfare programs.
Rocket Lab USA Inc. (RKLB)
Price: $4.36
Market Cap: $2,063 M
Revenue Growth: 1,090%
Rocket Lab manufactures satellites, offers space launch services, and supplies spacecraft parts. In November, the company announced a net loss despite a more than 12-fold increase in revenue, helped by a $14 million contract for one of its spacecraft separation systems. Because Rocket Lab showed the basic earnings (losses) per share during the most recent quarter, there is no EPS growth number for Rocket Lab.
ADMA Biologics Inc. (ADMA)
Price: $3.23
Market Cap: $635.6 M
12 months Trailing P/E Ratio: 122.8
ADMA is a biotech firm that produces, develops, and sells biological medicines to treat people with immune system deficiencies. Treatments are aimed at those whose immune systems are suppressed or weakened.
Borr Drilling Ltd. (BORR)
Price: $4.98
Market Cap: $1,119 M
12 months Trailing P/E Ratio: 120.3
Borr Drilling Ltd (BORR) is an international drilling contractor from Bermuda. It owns and runs jack-up rigs to support the global oil and gas production and exploration business.
Nordic American Tankers Ltd. (NAT)
Price: $3.51
Market Cap: $711.4 M
12 months Trailing P/E Ratio: 94.3
With a fleet of roughly twenty tankers, Nordic American Tankers is an international tanker company established in Bermuda. Nordic American recently disclosed a $0.05 per share dividend that will be paid on December 20.
Advantages of Investing Penny Stocks
High Return Potential: Because most penny stocks have minuscule market capitalizations, it just requires a small amount of capital to change their share price significantly. Therefore, good news can produce big returns before the company is discovered by the general investment community, such as securing a significant customer or forging a new strategic alliance.
Leverage: Due to their lower share prices, penny stocks appeal to investors with limited trading capital because they enable them to purchase thousands of shares.
Risks of Investing in Penny Stocks
Lack of liquidity: Because penny stocks are frequently illiquid, it may be challenging to rapidly sell your shares without affecting the price.
Unprofitable: Many penny stocks are investments in businesses that do not and will not produce profits for their shareholders. A constantly unprofitable organization isn't worth much because earnings and the prospect for profits are what give equities value.
Frauds: A few penny stocks even qualify as outright scams. It would be best to be alert for penny stock frauds, whether a pump-and-dump operation or a company presenting phony financial statements.
Bottom Line
Shares of businesses with low prices and little trading volumes are referred to as penny stocks. These markets have extreme volatility due to their low liquidity. There will therefore be more chances to make significant gains—or losses.