Penny stocks to watch, Sept. 2, 2014: Penny stocks across a variety of sectors have logged impressive gains year to date, led by low-priced stocks in the fuel sector and cannabis market.
Despite the scams and traps in penny stock investing, there are many penny stocks to watch now, from legitimate companies that generate revenue and have healthy prospects.
The key is finding those engaged in niche businesses offering a product that will serve a growing audience.
And the following three penny stocks to watch deliver just that...
Three Penny Stocks to Watch Before 2015
Penny Stocks to Watch No. 1: Ultrapetrol Ltd. (Nasdaq: ULTR) is an industrial shipping company providing marine transportation services in South America, Central America, Europe, North America, and Asia. The company operates in three segments: River Business, Offshore Supply Business, and Ocean Business. The River Business segment owns and operates dry and tanker barges and push boats in the Hidrovia region of South America. Its dry barges transport agricultural and forestry products, iron ore, and other cargoes, and its tanker barges carry petroleum products, vegetable oils, and other liquids.
Second-quarter 2014 revenue came in at $99.4 million. Total Q2 adjusted net income and adjusted net income per share were $2.9 million and $0.02 respectively.
ULTR has strengthened its balance sheet by repaying its $80 million convertible bond and refinancing its $180 million of long-term notes to $225 million. Both significantly improved the company's financial position and ability to grow through acquisitions.
ULTR has also expanded its offshore fleet from 11 to 14 vessels, while diversifying its service offerings to include more "complex higher margin capabilities."
The Bahamas-based company has made progress improving the outlook for its River Business by including certain time charter contracts and infrastructure less sensitive to climate conditions or cargo availability.
Stifel Nicolaus rates the stock a "Buy," with a $4.50 price target. That's a potential 35% increase from the ULTR's current price of $3.37.
Next up in our penny stocks to watch list is a leader in device programming systems that is up more than 26% year to date...
Penny Stocks to Watch No. 2: Data I/O Corp. (Nasdaq: DAIO) is the leading provider of manual and automated programming systems for electronic device manufacturers worldwide. The Redmond, Wash.-based company's products are used to program integrated circuits with the necessary data.
The company reported net sales of $5.6 million in Q2. Net income came in at $446,000, compared with a net loss of $624,000 in the same quarter a year ago. Leading sales growth was DAIO's PSV7000 Automated Programming System.
Expected to drive Q3's growth is DAIO's new PSV3000 Automated Programming System, just introduced for the Asian market.
"We were very pleased to report strong profits and revenue growth in Q2 led by the PSV7000," Chief Executive Officer (CEO) Anthony Ambrose said following the solid quarter. "We are seeing the positive results of our plan to invest in new products while controlling overall costs to provide strong operating leverage. The PSV7000 continues to exceed bookings expectations with existing and new customers. We won a significant automotive infotainment customer that had previously purchased from a competitor in North America. The fully configured PSV7000 was able to complete their job faster, and at a lower total cost of programming by a significant margin. This is a good example of how we are gaining market share and building a strong recurring revenue base."
The company could garner some buzz when it presents at the Rodman & Renshaw 16th Annual Global Investment Conference, being held Sept. 8-10 at the New York Palace Hotel.
Shares, at $3.24, are up 26.07% year to date.
Penny Stocks to Watch No. 3: Newtek Business Services Inc. (Nasdaq: NEWT) provides financial and business services to the small- and medium-sized business market in the United States and internationally. The New York City-based company offers electronic payment processing services, such as credit and debit card processing, check approval, and ancillary processing equipment and software to merchants.
Founded in 1998, NEWT also offers payroll management processing and employee tax filing services. It has strategic alliances to provide agent services to small business clients with American International Group Inc. (NYSE: AIG), Navy Federal Credit Union, Credit Union National Association, Pershing, and others.
The company posted diluted earnings per share of $0.07 in Q2, a 40% increase year over year.
"We anticipate realizing an uptick in performance in the second half of 2014," CEO Barry Sloan said following the strong quarter. "Historically, we have realized stronger consolidated bottom-line performance in the second half of the year. Over the past three years, our bottom-line performance on average in the second half of the year has comprised approximately 60% of total full-year earnings. We anticipate experiencing a similar trend this year and believe our adjusted 2014 EPS will grow to between $0.21 and $0.25."
Since 2003, NEWT has approved more than $1 billion in loans.
The one analyst covering NEWT rates shares a "Buy" and expects shares to rise to $4.50 in the next year from the current price of $2.71, according to Financial Times.
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