Stocks to buy

According to Finviz, there are 623 penny stocks under $1 to buy that trade on the New York Stock Exchange, the Nasdaq exchange, or the NYSE American exchange. However, while there are some promising plays among these 623 stocks, investors looking for cheap penny stocks under $1 may want to consider casting a wider net, and include stocks trading on the over-the-counter (or OTC) market in their search.

There are over 4,000 stocks under $1 per share that trade over-the-counter, according to OTCMarkets.com. Sure, the vast majority of them are not necessarily worth buying. Many of them have poor fundamentals, and/or trade at inflated valuations. Others are high quality and cheap, but are too illiquid when it comes to making them a meaningful position in your portfolio.

However, quite a few standout as stocks to consider for investors on the prowl for high-risk, high-potential return opportunities. That’s the situation here with the seven names listed below. A mix of growth and value plays, consider them some of the best bets out there among penny stocks under $1 per share to buy.

HMENF Hemisphere Energy $0.91
MRMD Marimed $0.39
NANX Nanophase Technologies $0.85
PFHO Pacific Health Care $0.92
POSAF POSaBIT Systems $0.67
VASO Vaso Corp. $0.24
XTMIF XTM. Inc. $0.12

Hemisphere Energy (HMENF)

Source: John Brueske / Shutterstock

Headquartered in Vancouver, Canada, Hemisphere Energy (OTCMKTS:HMENF) is an independent oil and gas exploration and production company, with its primary E&P asset located in the Canadian province of Alberta. After zooming from 15 cents to well over $1 per share during the 2021/2022 run-up in energy prices, HMENF stock pulled back. However, if you believe fears of an oil price correction are overblown, this may be one of the best penny stocks under $1.

Trading for less than 6 times earnings, HMENF is a bargain if oil prices hold steady/rise from here. According to a recent investor presentation, Hemisphere pays out 30% of its free cash flow as dividends. Elevated energy prices will keep this stock (with a forward dividend yield of 8.05%) a high-yielder.

MariMed (MRMD)

Source: John Brueske / Shutterstock.com

In recent articles on cannabis stocks to buy now and penny stocks under $3 per share, I have often included integrated cannabis company MariMed (OTCMKTS:MRMD) as a name to consider. Trading for just 38 cents per share, MRMD also fits the bill when it comes to finding the best penny stocks under $1 to buy. Based on current financial results, MRMD stock is cheap. Shares trade for less than 10 times earnings. More high-profile cannabis stocks trade at much higher valuations, and/or are currently unprofitable.

That’s not all. Already operating in multiple U.S. states, Marimed may be poised to experience strong growth, if cannabis reform finally happens on the U.S. federal level. As I have also argued previously, with its low valuation and small size, Marimed could also be a great bolt-on acquisition opportunity for a larger cannabis company.

Nanophase Technologies (NANX)

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Nanophase Technologies (OTCMKTS:NANX) is a specialty chemicals manufacturer. The company is mainly in the business of providing nano zinc oxide compounds, for use in personal care products such as cosmetics and sunscreens. Strong demand for this product has resulted in strong revenue growth, but consistent profitability remains elusive. However, that’s not the reason why NANX stock has become one of the cheap stocks under $1. Rather, as a Seeking Alpha commentator recently detailed, Nanophase is contending with a lawsuit filed against it by the company’s main customer, BASF (OTCMKTS:BASFY).

That said, this uncertainty may work to your advantage. Resolution of the lawsuit likely will not be a “game over” moment, nor will it end its relationship with BASF. More importantly, once this uncertainty clears up, bullishness for this growth play could return. This may result in NANX zooming back to prices well above $1 per share.

Pacific Health Care (PFHO)

Source: Shutterstock

Pull up Pacific Health Care (OTCMKTS:PFHO) on a stock screener, and at first it may not seem like it’s one of the best penny stocks under $1 to buy. This provider of workers’ compensation claims services is definitely not a growth story. Revenue dropped at the onset of Covid-19, and has remained stagnant ever since. PFHO stock also (on the surface) trades at a high multiple. Shares trade for over 30.6 times trailing twelve month earnings.

So then, what makes PFHO a bargain worth buying? The company is sitting on around $10.8 million in cash and investments. This represents more than 91.5% of PFHO’s $11.8 million market cap. PFHO’s majority owners could ultimately decide to take this undervalued company private. PFHO could end up being a stock that trades sideways for several years, only to unexpectedly spike due to a corporate event.

POSaBIT Systems (POSAF)

Source: Shutterstock

POSaBIT Systems (OTCMKTS:POSAF) is a fintech firm, specializing in providing payment services for cannabis dispensaries. Due to the legal gray area that is the U.S. legalized cannabis market, POSaBIT has been able to carve out a niche. All with mainstream payment processors still hesitant to provide services to this industry. If you believe that more U.S. states will legalize cannabis, but federal legalization remains far off into the future, POSAF stock may be a strong candidate for your portfolio. This unique competitive advantage has enabled the company to continue growing very fast.

Last year, revenue increased by 134%, and POSaBIT swung to profitability, reporting net income of $8 million (or 5 cents per share). Not bad for a stock you can buy today for only 68 cents per share. Via its recent acquisition of Hypur, the company is expanding its offerings in the cannabis-related fintech space.

Vaso (VASO)

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Trading for just under a quarter per share, Vaso (OTCMKTS:VASO) is one of the most affordable penny stocks under $1. Don’t mistake VASO’s low price to mean it is low quality, however. Trading for just 3.5 times earnings, this healthcare equipment and IT company’s shares are very undervalued. Similar to PFHO, VASO stock also represents ownership in a company sitting on a relatively high cash position. The company’s cash and short-term investments total $20.3 million, versus a market cap of $42.9 million. That said, while not majority-owned by its management like PFHO is, insiders hold negative control (44.5%) of Vaso.

This may limit the potential for a takeover, or for activist involvement. Still, given how management has delivered for shareholders with strong results, causing the stock to nearly triple in price over the past year, an activist may not be necessary to unlock underlying value.

XTM (XTMIF)

Source: Shutterstock

Based in Toronto, Canada, XTM (OTCMKTS:XTMIF) is an interesting fintech play you may have never heard of. The company is a provider of earned wage access (or EWA) services. In a nutshell, XTM’s main platform enables employees to receive their wages and tips daily, rather than on a bi-weekly payday.

Strong demand for this service has resulted in high growth for the company. In its most recently released quarterly results, XTM reported revenue growth of over 70%. Although profitability likely remains years away, as this fintech continues to scale up, XTMIF stock may be one of the best penny stocks under $1 per share to buy. Already a leader in this space in its home market, according to analyst Lisa Thompson from Zacks Investment Research, XTM is just starting to enter the U.S. EWA services market, suggesting a strong growth runway for the company.

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, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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