Penny stocks are low-priced stocks with solid market capitalization, sustainable earnings growth and secure financial ratios. Amid a market pullback and fading rate cut optimism, caution prevails due to AI-driven stock valuations. With the end of zero interest rates, experts anticipate a resurgence of value-investing penny stocks over growth ones, reversing trends seen since 2007.
Here are three penny stocks to watch closely in this current environment.
Surge Battery Metals (NILIF)
Surge Battery Metals (OTCMKTS:NILIF) unveiled significant lithium reserves in the U.S. This prompted plans for processing optimization and expanded exploration efforts. With growing lithium demand, this discovery presents unique growth potential, further solidified by a partnership with the Salmon River Cattlemen’s Association (SRCA) for exploration activities.
The company has initiated its 2024 exploration drill program at the Nevada North Lithium Project near Elko, Nevada. The program involves eight reverse circulation holes to assess geochemical extensions and known geophysical footprints for lithium mineralization.
Positioned to expand the known deposit, drilling spans an area westward and southward from the 2024 maiden resource area. It aims to define the deposit’s lateral and vertical extent.
CEO and Director Greg Reimer noted that Surge is continuing to advance the property’s geology and high-grade mineralization, guiding ongoing planning. Once received, Phase Three drilling results will complement known clay horizons knowledge, enhancing existing substantial deposits. Further program outcomes could expand the inferred mineral reserve’s size and lithium content.
Polestar Automotive (PSNY)
Polestar Automotive (NASDAQ:PSNY) shares have risen after the company updated investors on missed financial filings. The company aims to submit its 2023 filing by June’s end and release preliminary Q1 2024 earnings data. Polestar has faced delays due to errors in prior filings, prompting investigations into 2021 and 2022 reports.
Polestar’s stock declined after the EV sector peaked. Analysts seem to think there’s an upside to this early-stage EV name. A consensus price target on PSNY stock of $3.18 suggests this stock could double from here. However, with solid backing from Volvo, the company aims to deliver 165,000 units by 2025.
Despite not being profitable, Polestar’s revenue has grown steadily. While other early-stage EV companies continue to see little upside, I do think there’s a speculative angle that can be taken for this Sweden-based EV maker. I believe a position in this stock should be one in a diversified basket, but it’s a bet I’m considering right now.
Curaleaf Holdings (CURLF)
If you want to invest in the cannabis industry, consider Curaleaf Holdings (OTCMKTS:CURLF). The company serves both the medical and adult-use sectors. Curaleaf International, leading Europe’s cannabis sector, combines advanced science with innovative cultivation and distribution.
The company experienced a 65% rally in the past year and is poised for sustained growth pre-reclassification. Germany recently legalized recreational cannabis, signaling to ease of regulatory constraints. In Q1 2024, Curaleaf saw a modest 2% revenue increase to $339 million, achieving a 23% adjusted EBITDA margin and $46 million operating cash flow.
In other news, the company expanded its Select brand by introducing Select Fruit Stiq, a 1G All-In-One cannabis oil vape featuring Berry, Citrus and Tropical terpene blends. Ideal for flavor enthusiasts, it offers bold, fruity flavors and potent oil at a competitive price. Available in Arizona, Utah and Nevada, it boasts auto-draw functionality, USB-C charging and a compact design, providing a discreet vaping experience with six refreshing flavors.
For those bullish on the potential of the cannabis sector, this is an intriguing, high-growth pick worth considering. The company’s entrenched status as a multi-state operator could bode well if legalization does take hold in the future.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Chris MacDonald 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.