This story was originally published here.
Stocks have rebounded sharply since the March market crash. As a result, traders are looking for hot opportunities again. Tech stocks, growth companies, and speculative firms are all surging. Amid that backdrop, there may well be an uptick in interest in penny stocks soon as well. When the market is enjoying a strong upswing, oftentimes penny stocks enjoy an outsized benefit.
What makes for a good penny stock selection at this point? There are several features to look for. A company that has fallen too far on coronavirus concerns is one good category. Or look for companies that could benefit from the aftereffects of this economic shock; natural resource stocks could benefit, for example, if all the Federal Reserve stimulus ends up leading to inflation.
Here are seven penny stocks to have on your radar now:
Ambev (ABEV)
The first on this list of promising penny stocks is Ambev. On a pure market capitalization basis, Brazilian brewing leader Ambev is not a typical penny stock. Even after the crash this year, Ambev is still worth tens of billions of dollars. But at $2 per share, ABEV stock certainly falls in the lower-priced shares category. And like other low-priced shares, there could be big upside; Ambev sold for $4 earlier this year, and $7 in 2018. Those would be large gains from the current two buck level.
Ambev, for those unfamiliar, is the South American arm of the Anheuser-Busch Inbev (NYSE:BUD) beer conglomerate. South America is in a steep recession right now. Economies such as Brazil and Chile, where Ambev operates, are seeing their economies tank as commodity prices plunge and export orders have dried up. With China in particular just starting to recover, the emerging markets that rely on China are in a downdraft.
Ambev is well-positioned to ride out the bust, however. It has a net cash position and the beer market has remained stable. For now, the company may bring in less revenue due to selling beer in weak currencies such as the Argentine Peso. However, as the virus starts to pass and economic activity picks up, solid companies like Ambev will start to catch traders’ attention again.
Editor's Note: For the other six penny stocks, click here.
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