Penny stocks have a well-deserved reputation for low quality, high risk, and intense volatility. However, by practicing due diligence, you can discover some hidden treasures in the most unexpected places.
Below, you’ll find updates on previously discussed penny stocks from this column, followed by a few new intriguing and inexpensive trade ideas that are still flying under most investors’ radar.
Some of the setups described below may no longer be relevant or intact as of the time you read this article. Please conduct your own due diligence. Many stocks mentioned here were also discussed in the Peter Leeds Newsletter. Leeds may own shares in some of the investments mentioned, in which case that fact will be clearly indicated. Please note that penny stocks are notoriously volatile.
First, Some Updates
Amyris, Inc. (AMRS)
After Amyris, Inc. (AMRS) was first included as a penny stock to watch in 2020, the stock’s value soared all the way to $20 and beyond, remaining high above the “penny stock zone” (composed of stocks valued at under $5 per share) for almost the entirety of 2021.
However, shipping delays and manufacturing issues in China are taking a big bite out of earnings for Amyris. Potential dilution is also a concern for shareholders, and the company’s quick and current ratios of 0.40 and 0.60, respectively, are low enough to be worrisome. Consequently, the share price was back down to $4.07 as of this writing.
However, there are some reasons to believe that the sell-off is overdone. Consider the fact, after all, that the company is bringing two factories (in Brazil and Nevada) online soon, which should offset many of those earlier shipping issues. Meanwhile, Amyris still has excellent double-digit earnings per share (EPS) and revenue growth rates, as well as a gross margin of 66.40% and a spectacular return on equity (ROE) of 337.40%.
Given all these positives, the stock has the potential to rise back to the $10 level in the medium term once the negative news is digested and shipping issues are…..