Penny stocks have always interested many investors. Indeed, this interest comes from many places. Some investors like the volatility of these stocks, and the ability to buy a large amount of shares at one time. Others focus on the immense upside potential most penny stocks provide.
Of course, this extremely high upside also means these stocks are highly risking. Losing a substantial amount is always a possibility. Thus, penny stocks (those trading under $5 per share) are best-reserved for those with a high risk tolerance.
Investing in small companies that are very unpredictable is one of the riskiest forms of investing. However, I think investors should have at least a small position in companies trading under $5. Here are three of the best options for investors to consider buying in July.
Nikola (NKLA)
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Nikola (NASDAQ:NKLA) has an interesting history. In June 2020, the company went public, and the stock promptly traded near its all-time high (more than $90 per share). A lot of attention was paid to the company, which was perceived to be a possible rival for Tesla (NASDAQ:TSLA) and its EV market.
However, it turns out that this company was built on lies. The former CEO of Nikola Trevor Milton made misleading claims about the company’s technological capabilities, which led to him leaving the company back in Sept. 2020. Eventually, he was found guilty on fraud charges in October 2022.
The company still follows a similar business model of developing EV semi trucks and hydrogen-powered fueling stations. Over the past month, the stock has surged by over 150%. This resulted in NKLA stock breaching the $1 per share mark, bringing it back into compliance with listing requirements for the Nasdaq exchange. And with their second-quarter vehicle production results showing a doubling of deliveries year-over-year, this is a stock with some fundamental support that could be headed much higher from here.
Cemex (CXMSF)
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Cemex (OTCMKTS:CXMSF) is an urban solutions company based near Monterrey, Mexico. The company offers a range of products including concrete mixes, asphalt, bridges, drainage basins, and architectural products. Over the past year, the company has seen considerable momentum in its stock price, which has risen by 90%.
Cemex’s first quarter earnings release showed solid 9% year-over-year revenue growth. Notably, the company has seen substantial growth in its urbanization solutions business, a model of urban construction that produces fewer CO2 emissions.
The company has seen strong growth recently and has made considerable advancements in Europe, with their recent announcement that the European Union has offered Cemex, along with a private industrial company, a grant of nearly $5 million to produce a novel waste-to-fuel technology.
Wearable Devices (WLDS)
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Wearable Devices (NASDAQ:WLDS) is an Israeli company that produces wearable wrist devices. These wearable devices use AI capabilities to track touch-less finger movements and body activity.
The company’s initial public offering took place in October of 2022. In late May, Wearable Devices announced that their Mudra Band product, compatible with the Apple (NASDAQ:AAPL) Watch, is available for preorder. And in June, the company also launched an application for the Mudra Band on the iOS Store.
Wearable Devices’ stock price has tripled in just over a month. Indeed, Wearable Devices is another AI company attracting investors due to its innovative technology and compatibility with the Apple Watch and App Store. Indeed, this stock is a great pick for investors looking for the next big thing in the tech industry.
Penny Stocks
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, Noah Bolton held a long position in CXMSF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with
topics such as the stock market and financial news.
This content was originally published here.
