Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
One simple way to avoid losses with penny stock investing is to make sure you don't buy into companies that risk shuttering in the near term.
Sure, everybody wants big short-term gains. But the best penny stocks to buy will have even more value to sustain them for a lifetime.
We will show you a few of those today.
Looking at a company's balance sheet helps you gauge this. It significantly lowers the risk if you find that a company has capital to go around.
Ford Motor Co. (NYSE: F) rocketed 152% in the last 12 months as it rallied from coronavirus lows. This is an example of a time-tested company trading at penny stock levels. You knew it wasn't going away.
Often, you find way too many penny stocks with great stories and empty bank accounts. Those can lose you big money if you are not careful.
Since we want make big money, we will limit our universe to companies with the ability to stay in business. A good business model around a good product or service creates massive gains in stock price.
It's as simple as that.
Here is our first penny stock today...
The "New Normal" Penny Stock
TOMI Environmental Solutions Inc. (NASDAQ: TOMZ) is an excellent example of a penny stock with solid finances. The company has a great story, and business is booming.
TOMI runs global decontamination and infection prevention operation. Its Binary Ionization Technology cleans and sterilizes schools, hospitals, airlines, hotel rooms, and a host of other commercial locations.
The TOMI platform produces a fog of ionized hydrogen peroxide that sterilizes surfaces on contact.
To say that COVID-19 helped its business is an understatement.
2020 revenue rose 297% as the need for quick and effective sterilizing products became a primary concern for every business in the United States.
These numbers likely won't fall when the pandemic ends. Sterilizing surfaces inside commercial buildings will remain a high priority. Employees and customers alike will demand to know exactly how they are being protected.
So, TOMI Environmental should continue to see rapid growth for a very long time.
TOMI Environment easily passes our financial stress tests.
Right now, this penny stock trades for under $4. But it has the potential to double further down the road.
This next penny stock may get a bigger bump, sooner, however...
This Penny Stock Delivers What Others Can't
Williams Industrial Services Group Inc. (NASDAQ: WLMS) presents another company in excellent financial condition that promises a very bright future.
Williams Industrial provides services like construction and maintenance for customers in the energy and industrial sectors. If it needs to be fixed, replaced, or rebuilt, you call Williams.
Not many companies besides Williams can perform comprehensive services like Williams. It has the credentials to work anywhere in U.S. nuclear power facilities under the U.S. Nuclear Regulatory Commission's rules.
Williams will repair industrial uses and provide painting and coating in industrial and energy plants with specialized needs. These include both conventional and nuclear power plants.
Basically, if it is hard, messy work that has to meet very high regulatory and safety standards, Williams does it.
The stock currently trades at $3.99. If Williams Industrial Services Group comes anywhere close to meeting the expectations of the few analysts that follow the company, that number could easily triple in value over the next few years.
But none of these come quite close to the growth potential of our best penny stock to buy now...