Alton Hill is a Cofounder at TradingSim. He has a passion to help people and found that one of his ways of doing so, is through the world of Day Trading. Alton’s skillset is in Product Development and Design Thinking which he uses to write and improve the overall experience for TradingSim.
In this article, we will cover a list of penny stocks you should keep an eye on for 2018 and beyond. Please note this article is not a recommendation to buy these securities. For this study, we have defined penny stocks as securities currently trading at less than $5 dollars.
So, without further ado, let’s dive into the 11 top penny stocks of 2018 in terms of their sector, industry and a brief description of their primary function.
BDSI specializes in a space that is very important and relevant to the entire US: the opioid epidemic. BDSI targets a very specific population – people who have chronic pain management needs but are addicted to opioids. It’s a vicious condition: living with constant pain and the only thing that provides relief has caused a horrible addiction. One of the drugs that has recently been approved by the FDA is BUNAVAIL. It provides the same pain management of an opioid, but it prevents the addictive qualities of the drug. (www.bdsi.com/bunavail)
#2 – Applied DNA Sciences, Inc (APDN)
Industry: Security Software and Services
APDN is a small cap company specializes in supply chain integrity and security. Their primary product is their SigNatureDNA – a plant-based DNA – that is applied to a product and then scanned to verify the DNA matches. One of the industries they are currently using this in is the cotton industry and the pharmaceutical industry. In the cotton industry, specifically Supima cotton (American cotton), SigNatureDNA is applied to the actual fibers of cotton to verify that the cotton sent to China for production and then sent back is used – and not counterfeit or of a cheaper quality. (http://adnas.com/2018/01/26/cotton-2/)
#3 – Credit Suisse Asset Management Income Fund, Inc (CIK)
Industry: Asset Management
CIK is fantastic, under $5, consistent monthly dividend stock ($0.02 monthly dividend). They focus predominantly on ‘high yield bonds’, which are generally ‘junk’ bonds. However, the management of CIK has consistently maintained a steady value while generating consistent dividend distributions. Most of the capital is invested in high yield US corporate debt. As a result, there is a small amount of exposure in US national debt and foreign debt.
#4 – Gold Resource Corporation (GORO)
Sector: Basic Materials
Gold has certainly got the beat down so far in 2018, but when gold is down, that’s generally the time risk-averse investors and traders like to finally pick it up. GORO is a mining company and they also deliver a monthly dividend. One of the interesting dividend options for investors is to have their dividend deliver in physical gold vs a cash distribution (www.goldresourcecorp.com/investor.php). They have had some difficulties with their mines in Mexico, but most recently their operations in Nevada have yielded significantly more gold reserves. They also mine a considerable amount of silver (often more silver than gold).
#5 – Atlantic Power Corporation (AT)
Industry: Electric Utilities
A very little known, but well-operated power company, Atlantic Power gives a lot of future growth and value in the future. What is attractive about this company is that it is a fully independent power producer and has consistent long-term power purchase agreements. Now it used to be worth quite a bit more, but it faced a lot of difficulty during the big ‘green’ energy phase. The fact that it is still around should be very telling and displays positive management. And it’s clear that institutional and insider ownership has a long-view on the bullish future for this company with 56.3% of the total shares owned by institutions. Not only that, but insider and institutional ownership transactions have increased by 13.44% and 3.72%, respectively. (finviz.com/at)
#6 – Clean Energy Fuels Corp. (CLNE)
Industry: Gas Utilities
If there is one sub $5 stock on this list that you should pay attention to, it’s CLNE. CLNE is a natural gas company, but it’s focused on making natural gas usable in vehicles. This is actually a real big deal because they’ve attracted some big attention. The huge enormous energy giant, Total, recently purchased a 25% stake in CLNE and agreed to provide up to $100 million in credit. And what is that credit line for? For putting natural gas running trucks on the road. This something that not a lot of folks are thinking or talking about. The big battle in energy has been between all-electric vehicles VS gas. But no one has really considered a clean burning and very available fuel: natural gas. This is something that could disrupt the status quo of electric and gas vehicles.
#7 – AK Steel Holding Corporation (AKS)
Sector: Basic Materials
Industry: Steel & Iron
If there is one industry that has been the focal point of geopolitical volatility, it’s steel and aluminum. With all of the talks about tariffs here and tariffs there, steel has become a focal point. Without going into the inner workings of the company itself, it’s one of the few actual steel companies in the US and the tariffs will create higher prices for steel. However, there’s one thing that should be recognized about this company: nearly 25% of the available shares are short. That’s a crazy percentage by any stretch or measurement.
So, what’s bullish about that? A short squeeze. And with EPS this year at 453.3%, you can bet that squeeze will be a violent one. (finviz.com/quote.ashx?t=aks)
#8 – AVEO Pharmaceuticals, Inc. (AVEO)
Renal cancer. A horrible terrible disease. This small cap is sitting a value area where you can put your money into a life-saving company. Its premier drug is Tivozanib, which is in Phase 3 here in the US. The big deal here is that it’s already being used in the EU, Norway and Iceland. Not all the time, but generally what is ok’d in the EU is ok’d here in the US. Institutions own 51.8% of this company and if Phase 3 goes well, AVEO is going to get a 300+ million milestone payment – that should be enough to keep things going.
Furthermore, the thing I really like about this stock is that back in August of 2017, the EU approved Tivozanib, but then there was a big dip in price. About that time, we had institutional ownership rise and the price has ‘suspiciously’ remained low. Consider that a good sign. The big money wants to camp out, rent out there shares to short the heck out of this company. Because once Phase 3 is passed, expect buyout offers and price to go to the proverbial moon.
#9 – Zion Oil and Gas (ZN)
Sector: Basic Materials
Industry: Independent Oil and Gas
This is a really, very interesting company. It’s not just an oil company that is out to find and generate oil for just money’s sake. This is a company with a very staunch religious and political purpose. It clearly states on its website: “Drilling for Israel’s Political and Economic Independence.” That is then followed by ‘Inspired by Genesis 49:25-26 and Deuteronomy 33:13-16. Now, I have not really ever seen a company (certainly not an energy company) that is so very devout and open to its purpose. The site is filled with Biblical prophesy supporting why and where they are drilling.
It’s fascinating and cool. Besides the religious and political reasons behind the company, we should take note of what the big dogs are doing. And what are they doing? Buying. Like crazy. 44.99% positive institutional transactions this last quarter. That’s massive. Now, there has not been a lot of anything found as far as oil or gas found. But when there is (and there will be), this is going to leap significantly higher, exceedingly higher. And at $3.13 a share, this is a stupidly silly price for a company that could become a super hub of energy influence in one of the most important geo-political regions in the world.
#10 – Pixelworks, Inc. (PXLW)
The Semiconductor industry has been hot hot hot over the last few years. So it’s surprising to see a company in that area that is underperforming – and that demands some scrutiny. Pixelworks is certainly not in the same realm as it’s major peers like AMD, INTEL or NVIDIA. Pixelworks focuses on a kind of niche: pixel processing semiconductors. Essentially, super advanced displays and display technology. What makes them very appealing is the broad range of companies they continue to acquire partnerships with, specifically gaming companies, mobile companies, and projector companies.
Also, there is a very real problem with modern technology as it relates to what appears on our screens: the bridge between the graphics being processed and then displayed on the screen is bottlenecked. If you are a gamer, your familiar with this issue on high-end video cards. To fix that, you need to get a monitor that is compliant with Nvidia’s G-sync technology. Pixelworks, though is working with all the manufacturers to provide an internal GPU/CPU to process the advanced images so they flow seamlessly from the processor to screen.
Formally OAKS, HCFT is a favorite among monthly dividend investors. The name and management change have certainly brought in the buyers. There was a significant dividend cut early in 2018 (and was known back in 2017) from $0.0333 to $0.02 and that caused another big dip price. However, since then prices have bottomed, flattened and even caught a bit of a bid since then. In fact, besides the large amount of retail investors coming in, there have been significant purchases by institutions and insiders. What’s more is that when you buy this stock, it’s like you’re getting free money.
At the time of writing this article, the book value is sitting at $4.84 per share. And it’s trading at $3.40. And it has a very steady and easy 7% dividend. This is easily one of the best and great values not just in the penny stock category, but in any category. Better and successful new management coupled with a discount and an easily sustainable 7% dividend? Sign me up.