As a vast swath of the population has been shut in with nowhere to go, the online brokerage firm Robinhood saw an explosion in new accounts and trading volumes.
Partially fueled by sports gamblers with nothing to bet on, people turned to trading stocks on the no-commission platform. The platform has seen some wild activity as newly minted traders bet on everything from bankrupt companies to bitcoin. Traders flock to the site's chatrooms to compare notes and strategies.
Penny stock trading has been especially popular on Robinhood.
But traders - especially new traders - can get burned on penny stocks. After all, many of these stocks are entirely speculative, are pushed up through social media hype, then bust as traders take their profits. You don't want to be left holding the bag when that happens.
Robinhood makes it possible to trade penny stocks quickly from wherever you happen to be for free. Investing in penny stocks can be wildly profitable, but be smart about it.
The Latin root word for speculate means intelligent contemplation, consideration. The root word for gambler comes from Middle English and means to play games.
Be a speculator, not a gambler. Make informed, smart speculations that can pay off in size rather than just following the latest idea tossed into a chatroom.
You can use this highly rated, easy to use brokerage app to invest in penny stocks that actually have the potential for staggering moves that help a small investor become a much bigger investor without risking blowing up their account. And we can show you how.
We went looking for stocks under $5 that have the potential for huge gains for their investors but also have more than a story propping up the stock price. We want to own stock in businesses the market is ignoring that have the type of growth potential that can turn a stock into a five, or even a ten, bagger over the next few years.
Here are the three best penny stocks on Robinhood right now...
This Robinhood Penny Stock Targets Manhattan Real Estate
Newmark Group Inc. (NASDAQ: NMRK) is a fantastic example of a penny stock with huge potential. Based in Manhattan, Newmark group is in the commercial real estate business. It helps real estate investors raise money, find properties, obtain the proper financing, and sell properties they already own. Newmark also provides property management services to clients around the world.
Newmark sold off hard when the pandemic hit the U.S. economy this spring. The initial perception was that the commercial real estate markets were doomed, and business would dry up and go away. Thanks to the Fed's stimulus programs and swift action by Congress to get money into the system, that has not happened. It may not be business as usual for a short time, but business will get done, and Newmark will make much more than the market currently expects.
Newmark is already trying to break out of penny stock status. After plunging as low as $2.49, the stock is trying to break out over the $5 mark. When that happens, we could see institutions come back into the stock and begin to drive the stock price well above current levels. This stock was over $15 a share not that long ago, and I see no reason shares of Newmark Group do not hit that level again before long.
That would make for a 200% gain.
This Penny Stock Could Double
At first glance, Orion Energy Systems Inc. (NASDAQ: OESX) is not a sexy business. It makes and sells energy management systems for the commercial office, office, and industrial markets in North America. It also offers various other LED fixtures for lighting and energy management needs, including fixtures for agribusinesses, parking lots, roadways, retail, mezzanine, and outdoor applications.
Sexy? Not really - until you consider what energy management really does. It lowers one of the highest costs for just about every type of company in the world. Switching to LED lighting can reduce energy consumption by as much as 70% compared to traditional lighting solutions.
Orion Energy Systems should see powerful earnings growth over the next several years as businesses do retrofits to install longer-burning LED systems to save cash. Mike Altschaefl, Orion's CEO, said that 2020 was a transformational year for the company on a recent conference call. It completed a major national retrofit for a major company and is consistently winning new business. In the first quarter, the company reported a 129% increase in revenue and went from losing money to a profit.
Analysts expect to see a double-digit growth rate over the next several years, at least.
The stock is trading at about $3.50 right now. As the economy recovers and more businesses switch to an LED lighting system, this stock should double or more.
But our best penny stock on Robinhood is even more exciting.
The Best Robinhood Penny Stock Helps the Military Fight
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Not much has gone right for CPI Aerostructures (NYSE: CVU) in 2020. It is a major supplier to Boeing, which has been a bit of a disaster. Then it announced that it had to amend some 2018 and 2019 financial statements.
That's all bad news, but CPI is still very much in business.
This company makes structural aircraft parts for fixed-wing aircraft and helicopters in the commercial and defense markets. While the commercial side is a little slow, the defense side has been fantastic. It has picked up contracts for F-16 parts, wing kits for the Navy's E-2D Advanced Hawkeye, and it even got an order for Boeing as part of the re-winging of the veteran A-10 Warthog planes.
CPI Aerostructures has hit a tough spot, but the military business will keep it going, and at some point, the commercial business will return. When it does, shares of CPI Aerostructures should fly above the $5 level and eventually challenge the old highs in the mid-teens.
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