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The best penny stocks have one thing in common: revenue growth.
Revenue growth is one of the biggest drivers of long-term stock returns. That makes sense. If you are not selling more of your products and services, how can you grow the profits analysts and investors focus on when valuing stocks? As investors, we need an analyst to recommend the shares and investors to supply the buying pressure that moves the stock price higher.
This is true for all types of stocks, but especially true when it comes to investing in low–priced stocks.
As we know, penny stocks can be the land of hype sometimes. Rumors and social media posts can push these stocks higher, but there's no substitute for stone cold financials. Using revenue growth as our yardstick, we can mine the gems in the trash pile and find those with the potential for enormous gains.
That's why we've dug into the balance sheets of some of the top penny stocks to uncover those with real potential.
Here are three of the best penny stocks to buy right now…
The Top EV Penny Stock
One of the fastest-growing low-priced stocks has been Ideanomics Inc. (NASDAQ: IDEX).
This company is investing in companies working in what promise to be two of the fastest-growing segments of the economy: electric vehicles and fintech, including cryptocurrency. Ideanomics also offers an ETF that tracks the Innovation Labs Next-Generation Vehicles Index.
Ideanomics has investments or owns outright companies in several aspects of the electric vehicle market. It provides financing to fleet operators that are buying electric vehicles.
It owns an electric bike company in Malaysia that has plans to expand into EV buses, trucks, cars, and light rail.
Ideanomics is also invested in Solectrac, the first North American company to offer 100% battery-powered, all-electric tractors for agriculture and utility applications.
On the fintech side of things, Ideanomics is the majority owner of DBOT, an alternative exchange that helps investors trade small and microcap U.S.–based companies that are not currently eligible to be listed/traded on the national exchanges. Most of these are small–cap firms valued between $20 million and $50 million.
Ideanomics also owns Intelligenta, an artificial intelligence service, alongside solutions that can help investment management firms improve decision making, risk management, client retention, and growth.
Ideanomics is almost like a publicly traded venture capital fund that is invested in companies with the potential for explosive returns.
If one or more of its investments turns into a breakthrough company, revenue will pop, and we'll make an enormous amount of money with this $3.97 stock.
The Best Penny Stock to Meet Energy Demand
NexTier Oilfield Solutions Inc. (NYSE: NEX) is a child of the fracking boom. The company was the result between the merger of C&J Services and Keane Energy back in 2019. The company is one of the largest energy services companies in the United States today.
It is much better positioned than many other providers serving the unconventional oil and gas industry today for one simple reason: NexTier is debt-free with plenty of cash on hand to negotiate the energy market's ups and downs.
NexTier is also one of the first companies to realize that the digital age was going to reach the oil patch along with every other industry. The company has developed a proprietary digital platform that allows for remote operations and uses machine learning to track the equipment's functions and notify operators of potential problems.
This could quickly turn from a growth story to a takeover story as fracking billionaire Dan Wilks recently bought more than 5% of the company. Mr. Wilks says he thinks the stock is undervalued and may push for its sale.
That could lead to a quick double from today's price of $4.13 a share.
If the activist investor does not force a sale, NexTier could soar to several multiples of the current stock price as the global spread of a vaccine brings demand back to the energy markets.