By now, you know the dangers of “millionaire-maker penny stocks.”
Whenever we even mention a penny stock, we add a disclaimer at the end of articles. We remind you of the US SEC warning that simply says:
“Penny stocks may trade infrequently — which means that it may be difficult to sell penny stock shares once you have them. Because it may also be difficult to find quotations for penny stocks, they may be impossible to accurately price. Investors in penny stock[s] should be prepared for the possibility that they may lose their whole investment.”
We remind you not to risk the house on a penny stock because of its historical unreliability. I remind you to do your due diligence and even consider penny stocks, where insiders are putting their money where their mouth is. After all, who knows the company better than the insiders? And why would an insider put their money on the line for a stock they didn’t really believe in?
With those warnings and advice for spotting opportunities in millionaire-maker penny stocks, here are three I like.
Millionaire-Maker Penny Stocks: Accuray Inc. (ARAY)
Medical device company Accuray (NASDAQ:ARAY) just saw its shares gap from about $2.20 to about $1.50. This is after earnings stunk up the joint with a loss of $6.3 million, or six cents per share, from a year-ago profit of a penny. The loss was also wider than anticipated, with analysts only expecting a loss of a penny. Revenue fell 14.3% year over year to $101.1 million, which missed calls for revenue of $113.65 million.
However, there was some good news. Gross orders jumped by 21% to $89.1 million, as its book-to-bill ratio improved to 1.8 from 1.2. Better, after the miss, Board Chair Joseph Whitters bought 100,000 shares at $1.56 each for about $156,050.
Technically, the stock caught strong double-bottom support around $1.50 and has begun to pivot higher. Last trading at $1.85, it’s a buy. Initially, I’d like to see the ARAY stock refill its bearish gap at around $2.10.
BigBear.ai (BBAI)
We can also look at BigBear.ai (NYSE:BBAI), which uses artificial intelligence to make intelligent decisions. Unfortunately, its chart has been a slow-motion train wreck year-to-date, dropping from a March high of about $4.75 to a low of $1.40.
Earnings weren’t much help. In its latest quarter, revenue dropped 21.4% to $33.1 million. Losses tripled to 67 cents from 19 cents year over year. Worse, that loss per share was greater than forecasts for a loss of six cents.
On a positive note, the company closed its acquisition of Pangiam, which specializes in facial recognition. This acquisition helps broaden BBAI’s reach beyond government clients, including airlines and other areas where identity verification is essential.
Helping, in early June, Director Pamela Braden bought 140,939 shares of BBAI for $1.49 each for about $210,000. Plus, with a good deal of negativity priced in and the potential to broaden its client reach, BBAI could push aggressively higher with patience.
Altus Power (AMPS)
There’s also Altus Power (NYSE:AMPS), a clean electrification company that develops, owns, constructs, and operates roof, ground, and carport-based photovoltaic solar energy generation and storage systems.
It last traded at $4.40, and it’s just starting to break from consolidation to the upside. From its last traded price, I’d like to see it initially refill its bearish gap at around $6.
Helping, CEO Gregg Felton just bought 33,285 shares at an average price of $4 each for about $133,140. Before this early June buy, he bought 82,576 shares in late May and 12,500 shares at $4.78 on March 28, as noted by BarChart.com.
Earnings haven’t been too shabby, either. In its most recent quarter, the company posted a 38% jump in revenue year over year to $40.7 million. Adjusted EPS of five cents was also up about 66.7% YOY. That was also better than estimates for a seven-cent per share loss.
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, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.