Right now, all the most explosive profit opportunity is concentrated in one small segment of the stock market…
These cheap stocks are not for everyone, and require a solid risk management approach. But only stocks selling for under $5/share can provide true “lotto ticket” gains – blowing Amazon, Microsoft, and even Tesla out of the water.
See Also: $3 Tech Stock the Next Tesla?
Dozens of tiny stocks are capitalizing on this mad rush in 2021, and already we've seen real gains of 209%… 903%… 1,434%… even 2,351% in one year…
And more than a few Mega-Gains have blown to the top of our Penny Stock Hotlist (below).
So the big question is, of course, what should a penny stock investor buy now?
The answer, for many, is still penny stocks…. and our new hotlist (below) is an excellent tool.
Not only is a stock trading below $5 a share much more affordable for regular investors… but cheaper stocks also tend to belong to smaller companies, who can double or triple in size much easier than a giant like Amazon.
In fact, some of the greatest companies in the world used to be tiny stocks themselves. Amazon traded for less than $2 a share in 1997. Now it's over $3,000.
Of course, with higher potential reward comes higher risk. Smaller companies and cheaper stocks means there’s more volatility and more room for bad actors to influence stock prices, so please exercise caution, and keep an eye on your trades.
These cheap stocks can go from slumber to life-changing jackpot – and sometimes back down again – in a matter of days, sometimes hours.
With that being said, below is our vetted list of the 5 best cheap stocks to buy right now:
1. The Electric Vehicle for the Masses – $3.40/share
Easily the hottest tech trend of the decade is electric vehicles.
All eyes are on Tesla Inc. (TSLA), but something’s not right when Tesla, which makes about 350,000 cars a year, is valued higher than Toyota Motor Corp. (TM), which makes 10 million. Not to mention that at over $700/share (post a 5:1 split!), Tesla’s shares are inaccessible.
A much better option is Electrameccanica Vehicles Corp. (SOLO). Based in Canada, this electric car company is one of the few Tesla contenders with an actual product out there, a low-priced one-seater called the SOLO that’s perfect for urban drivers. That already puts it a giant step ahead of most of the industry, and the company is moving quickly to start production of more practical cars and, indeed, an entire ecosystem of EVs (including rideshare, deliveries). Electrameccanica is also planning to plunk down roots in the U.S. with an assembly facility in Arizona and retail centers in five states.
It's still operating at a loss – for now. Financials are turning around fast, with the latest quarter showing cash on hand increasing from $43mm to $260mm YOY and a net profit margin that’s improved from -77,000% to -98%. The minute this thing becomes profitable, get out of the way.
Analysts expect it to climb 157.55% over the next 12 months, according to data compiled by InvestorsObserver.
2. Tesla's Next Big Acquisition? – $1.30/share
It’s no secret that the meteoric rise of electric vehicles is fueling a gold rush in lithium, the element used in high-capacity batteries.
The vast majority of lithium comes from South America, but as more and more cars go electric, demand is expected to outpace current supply.
Check out this recent analysis from Forbes' Tim Treadgold:
If your investment portfolio is not exposed to lithium… then consider the price effect on a commodity said to be heading for a “perpetual deficit.”~ Lithium Price Tipped To Rise After Warning Of ‘Perpetual Deficit’, Forbes, July 2, 2021
Experts think the electric car industry is overdue to start buying up lithium mines to guarantee their supply – and lock competitors out.
American Lithium Corp. (LIACF) is a speculative play that owns a promising lithium deposit in Nevada, just four hours drive away from Tesla’s Gigafactory. The company’s management is banking on being bought out by Tesla.
It’s a speculative and volatile space, but the potential upside is extraordinary.
3. The World's Best Address for Gold – $0.90/share
Another commodity that’s already breaking records is gold, which went above $2,000/ounce for the first time ever in 2020 (holding tough at about $1,700 today).
With unprecedented money-printing from the U.S. as well as governments across the world, all desperate to get out of the economic crisis caused by the Covid-19 pandemic, currencies everywhere are being devalued. In fact, in just a few months in 2020 the Fed pumped in more stimulus into the economy than it did through years following the 2008 Financial Crisis. That means ever more dollars chasing the pretty much the same amount of gold. So no wonder gold prices are going up.
One of the best ways to play this is Fosterville South Exploration Ltd. (FSXLF), which owns several potential gold deposits in Australia, including three that are adjacent to the highest quality, lowest-cost gold mines in the world.
There’s some extra risk with such a thinly traded stock (average volume is just 53,600 shares). But the company has loads of cash, no debt, and a tight management team. As stimulus and money printing keep pushing up the price of gold, Fosterville will follow.
4. The Path for Businesses to Go Digital – $2.40/share
The Covid-19 lockdowns have accelerated the push for businesses to digitize their communications, bookkeeping, payment systems, and more. With millions of people now working remotely and ordering almost exclusively online, going digital is the only way for companies to survive.
Exela Technologies Inc. (XELA) is a business process automation leader that specializes in custom automation solutions. This includes things like evaluating and tracking job applicants, handling billing, digitizing physical mailrooms, payment processing, and much more.
In case this sounds boring, let’s take a look at this small-cap’s global reach in over 50 countries…
- U.S. customers include the top 5 healthcare payers, the top 10 banks, and even the IRS.
- In the U.K., Exela’s Request to Pay system enables the processing and archiving of 100% of check payments.
- In Sweden, Exela is the sole processor of bank giros payments for 500,000+ companies.
- Plus, the moat is massive, with numerous patents and a customer based that renews at the insane rate of 95%.
Striking financial highlights include a 27% boost to gross profits in Q2/2021 (to $84 mm YOY) and gross margins of 28.6% (up 722 bps YOY).
5. Capitalizing on Worry – $2.60/share
During the Covid-19 pandemic and the related lockdowns, anxiety has skyrocketed. In fact, the Census Bureau says that one third of Americans are now showing signs of clinical depression and anxiety.
VistaGen Therapeutics Inc. (VTGN) is an early-stage biotech company in Phase 3 testing of a completely new kind of treatment for anxiety and depression – a nasal spray. Its pipeline is highly innovative due to the unique “mechanism” – an odorless, fast-acting spray – and the rapid uptake (begins working in just 15 minutes, rather than the 2+ weeks of regular SSRI treatments). The FDA has awarded a Fast Track Designation to its PH94B Nasal Spray for anxiety.
Here’s a look at its current pipeline:
Co-licensing deals also mean that VistaGen is set to receive milestone payments for this drug of up to $172 million even before it starts selling.
Moreover, VTGN just joined the Russell 2000 Index in June 2021, a great sign of bright things ahead.