7 F-Rated Penny Stocks Not Worth Shaking a Stick At

I’m 100% on board when it comes to penny stocks. If you choose correctly, I think they are a fine way to diversify your portfolio and gain exposure to some companies that are on the verge of some dynamic things that can bring you profits. But you have to choose the right stocks — and F-rated penny stocks are the ones you should be avoiding at all costs.

Penny stocks are those that sell for $5 or less per share, but there are plenty of penny stocks out there that are priced much less. When you’re looking for penny stocks, it’s important to recognize which ones are the up-and-comers and which ones are on their way down.

The latter on the list are the ones that you need to be very careful about. Bottom-feeding on an F-rated penny stock is a sure path to failure and losses. And it can happen fast — penny stocks can be very volatile because most of them have a small market cap and their trading volumes are often small — so it doesn’t take a lot to move the stock price up or down.

Today we’ll use the Portfolio Grader to identify F-rated penny stocks that you should be avoiding. By evaluating metrics such as momentum, earnings performance and revenue growth (or lack thereof), the Portfolio Grader gives you an objective look at all the stocks in the market — and can help steer you clear from trouble.

Bruush Oral Care (BRSH)

Bruush Oral Care (NASDAQ:BRSH) is in the business of teeth. The company operates an e-commerce platform that sells sonic-powered electric toothbrushes and brush head refills.

The company offers a subscription program that, if successful, would provide Bruush with a consistent revenue stream. But the business model hasn’t proven to be effective.

That’s why the company performed a 1-for-25 reverse stock split in August in an attempt to maintain Nasdaq compliance, and that was a short-term solution at best, because the stock price is again far below the $1 threshold and Bruush is operating again under threat of a delisting.

Late last year, Bruush and Arrive Technology, an Indiana company that offers a smart Mailbox-as-a-Service (Maas) platform that uses artificial intelligence to help deliver packages through drones and robot technology. The merger, which is expected to close this year, would see the combined company trade under the ticker symbol ARRV.

The expected merger helped push Bruush’s stock price from 4 cents to 15 cents, but the stock is still an incredibly weak play. If gets an “F” rating in the Portfolio Grader.

Ascent Solar Technologies (ASTI)

Ascent Solar Technologies (NASDAQ:ASTI) is a Colorado company that makes photovoltaic panels on thin, film-like layers that can be used on solar panels, for drones and unmanned aircraft, and in space and defense applications.

The company recently touted a new contract it signed with an unnamed customer who plans to use Ascent’s thin photovoltaic panels to power low Earth-orbit satellites.

But like Bruush, the company is also struggling to maintain its Nasdaq compliance. It completed a 1-for-200 reverse stock split in September, but the stock is already back below $1.

And the financials are painful to see. Revenue in the first quarter was $5,600, down from $124,255 a year ago. The company posted a loss of $2.53 million in the quarter, which was better than the $6 million loss it recorded in the first quarter of 2023.

ASTI stock is down 83% this year and gets an “F” rating in the Portfolio Grader.

Ault Alliance (AULT)

Ault Alliance (NYSEAMERICAN:AULT) is a holding company that seeks to buy undervalued businesses and invest in disruptive technologies. It has a number of affiliates, including Sentinum, which is a miner of Bitcoin (BTC-USD)

Ault doesn’t even have a Nasdaq listing and trades on the NYSE American, which is the small cap equity market exchange. But like other names on this list, it’s had some difficulties there maintaining compliance. Ault announced on May 2 that it’s managed to regain compliance.

But it may be a short-term victory. The stock price is down to 33 cents per share, having lost 84% of its value this year, including 15% in the last week.

AULT stock gets an “F” rating in the Portfolio Grader.

Grom Social Enterprises (GROM)

Grom Social Enterprises (NASDAQ:GROM) is a Florida company that runs a social media platform that’s targeted to kids. Most social media platforms require users to be at least 13, but Grom is for kids younger than that.

The platform lets kids share content and chat in an online environment that is monitored by Grom employees.

However, the business is shrinking fast. Revenues in the first quarter were only $874,000 down from $1.19 million. The company posted a net loss of $4.1 million, up from a loss of $2.3 million in the first quarter of 2023. Grom acknowledged seeing steep drops in animation revenue, sales and a loss of multiyear contract renewals.

Grom now only has cash and cash equivalents of $450,000, and debts of $100.9 million. In a recent filing, the company acknowledged that it will need to raise additional funding to continue.

GROM stock is down 56% this year and gets an “F” rating in the Portfolio Grader.

Virgin Galactic (SPCE)

Virgin Galactic (NYSE:SPCE) is probably one of the most well-known F-rated penny stocks on this list. The company a few short years ago was in a race with SpaceX and Blue Orgin to see which would be the first private company to successfully launch a civilian into space and open the door toward space tourism.

Virgin Galactic won that race, as founder Richard Branson made his first suborbital spaceflight just nine days before Jeff Bezos went up in a Blue Origin ship. But that’s pretty much been the highlight for Virgin Galactic.

The company’s encountered steep losses, burning through more than $1 billion in the last two years.

And while there’s renewed interest in SPCE stock today in advance of the company’s planned Unity spacecraft launch on June 8, space tourism is still a rich person’s game with no profits to be had for investors.

SPCE stock is down 61% in 2024 and gets an “F” rating in the Portfolio Grader.

MicroVision (MVIS)

MicroVision (NASDAQ:MVIS) makes automotive lidar sensors to help driver-assistance systems and autonomous vehicles function. The sensors are also used in industrial, smart infrastructure and robotics.

While there are useful applications for MicroVision’s products, the company hasn’t been able to turn that into a profit.

Revenue for the first quarter was an improvement, coming in at $956,000 versus $782,000 a year ago. But the company’s losses were massive, coming in at $26.3 million and 13 cents per share versus $19 million and 11 cents per share a year ago.

And there doesn’t appear to be a plan to turn things around, other than “work harder.”

“As we navigate current headwinds in the automotive industry and lidar sector with a healthy balance of optimism and realism, we are aggressively pursuing near-term revenue opportunities in industrial markets and with partnership opportunities, as well as continuing our ethos of fiscal discipline,” CEO Sumit Sharma said. “I remain committed to steering MicroVision and firmly establishing it as a leading automotive OEM supplier of lidar hardware and software solutions.”

I would rather see a bold plan for turning this ship around. But that’s why MicroVision is an F-rated penny stock in the Portfolio Grader. The stock price is down 58% this year.

Mullen Automotive (MULN)

Mullen Automotive (NASDAQ:MULN) is a struggling electric vehicle stock that’s made huge moves in the last year to try to maintain its Nasdaq listing.

Remember, this is the EV company that did three separate reverse stock splits last year, including a 1-for-100 split in December.

To its credit, Mullen is trying to do something different now. It’s shifting its business model to produce commercial EVs, and it’s completed the first phase of its battery line integration at its California plant in hopes of commercializing EV battery packs.

It’s working on expanding its distribution network into Eastern Europe and it signed a new deal to supply 40 commercial vehicles to a company in Switzerland.

Is this enough to turn the tide on MULN stock? Its finally starting to see revenue, bringing in $33,000 in the second quarter of fiscal 2024. But the losses are staggering, at $177.3 million for the quarter.

Mullen has $22.3 million in cash and cash equivalents, down from $155 million a year ago. So at this rate of spending, money is going to be an immediate concern. While it’s possible that Mullen can eventually become a stable company, it’s nowhere close now.

MULN stock is down 73% this year and gets an “F” rating in the Portfolio Grader.

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, Louis Navellier did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article had a long position in BTC-USD. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.