Though risky, there are certainly plenty of penny stocks to buy that have the potential to significantly boost portfolio returns. Of course, patience and a growth-friendly market are required for the kind of major upside most growth investors are looking for over a five year time frame. But it’s precisely these companies’ volatility and upside potential that many seek out, in the higher-risk portion of portfolios.
The three companies on this list are among the best-positioned in their respective sectors to see future growth and profitability. These companies are certainly in the higher-risk bucket, and should be treated as such. Position sizing and risk management are going to be important when considering how much and when to add positions (and when to get out). But for those looking to take a risk-on approach to this market, here are three penny stocks to buy that I think are worth considering right now.
Surge Battery Metals (NILIF)
Surge Battery Metals (OTCMKTS:NILIF) is a notable yet low-profile lithium exploration company focused on key deposits in Nevada. The company recently released its maiden Mineral Resource Estimate, revealing their lithium project in Elko County, Nevada, as the highest-grade lithium resource in the U.S.
CEO Greg Reimer stated that the results confirm the Nevada North Lithium Project (NNLP) as a significant and high-grade lithium clay deposit. Located 87 miles northeast of Elko, the NNLP is in early development stages, with the company actively progressing the project.
In a March 26 webinar, Reimer highlighted the project’s significant progress over the past 14 months. Following promising surface lithium grades, they initiated a drill program in fall 2022, drilling eight holes. The findings confirmed substantial subsurface lithium in the Granite Range, averaging around 3,300 parts per million.
VAALCO Energy (EGY)
Although slightly above penny stock range (depending on the day), VAALCO Energy (NYSE:EGY) remains an intriguing option for value investors. The company’s attractive valuation and 4% dividend yield make this a stock worth considering. Operating in Canada, Egypt and Gabon, the company benefited from the wars in Russia and Ukraine. In the last three quarters, revenues surged 43% and beat estimates. Strategic acquisitions and resumed operations at the Baobab field significantly enhanced output.
In the last quarter, Houston-based VAALCO Energy beat expectations with adjusted earnings of 35 cents per share and $68.7 million in revenue. Higher production and commodity prices drove these results. The average oil price of EGY increased to $109.65. This benefitted from geopolitical tensions and boosted its Q1 2024 revenues and cash flows.
Over the past month, the stock declined approximately 9% due to uncertain prospects. Yet, considering EGY’s dividend, well-supported by cash flow, it could mitigate some of these concerns.
Savara (SVRA)
Savara (NASDAQ:SVRA) is an emerging player in the biopharma sector, focusing on treatments for respiratory diseases lacking effective therapies. Its lead candidate, molgramostim, targets autoimmune pulmonary alveolar proteinosis (aPAP) and is currently in phase 3 trials.
Recently presented positive results at the ATS International Conference 2024 underscore its potential. With FDA designations in hand, Savara’s pipeline shows promise, supported by a strong cash position sustaining operations until 2026.
Analysts set an average twelve-month target price of $9.17, with recent updates reflecting positive sentiments. Key analysts at HC Wainwright, Oppenheimer, Piper Sandler, JMP Securities and Evercore ISI reiterated or adjusted their bullish ratings and price targets in recent reports.
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.