- January 26, 2022
- Posted by: admin
- Category: Stock
BEST PENNY STOCKS TO BUY IN 2022: As we witness the end of 2021 and usher in the New Year, there are a lot of factors to consider as an investor—especially as a penny stocks investor. 2021 wasn’t the best year for most investors because of the constant fluctuations in exchange rates and stocks value. However, 2022 might have a lot of potential for penny stocks investors, and you need to be prepared for whatever will happen.
Remember, it is only if you stay ahead in the game that you can easily take advantage of changes in the stock market. This article describes penny stocks, the factors that affect their prices, and the best penny stocks to buy in 2022.
BEST PENNY STOCKS TO BUY IN 2022
What are penny stocks?
Penny stocks are usually traded at less than $5 a share. Their primary characteristics are low quality, high risks, and volatility. Still, several investors consider penny stocks a gold mine. The reason for their interest is that trading at low share prices has usually yielded enormous profits for investors. Hence, if you keep yourself informed on the latest penny stocks with potentials, you might also gain considerable profits in the future.
Factors that affect the value of penny stocks
Three primary drivers steer the prices of penny stocks and they are discussed below.
- Expansion of the industry: The expansion of the industry determines its market share. The market share, in turn, determines the growth of companies in the industry alongside their revenues. It is wise to buy penny stocks from a company that is increasing in value at a fast pace. However, a better investment strategy will be to purchase penny stocks in a company with small penny stocks that has the potentials to increase in value over time.
- The media: If you live in this millennia, you must have witnessed the power of the media. It is usually the penny stocks with the most media coverage that attracts more investors. Let’s take the marijuana penny stocks, for example. Immediately it was introduced into the stock market, the media gave it the most stunning headlines, which gave it traction in the investment space. Investors became drawn to it, which led to an increase in its value. Still, you have to be careful of the penny stocks that the media promotes, especially if it is too good to be true.
- Trading imbalances: If the stock is bought more than it is sold or sold more than it is bought, trading imbalances are inevitable. Because low prices characterize most penny stocks, some will have excellent purchasing power or less.
A typical example of trading imbalance is when a trader sees $2000 worth of trade and another trader decides to dump $20,000 worth of stock. The stock market will be in a state of disequilibrium because it wouldn’t have enough buyers to purchase the $20,000 worth of stock. As a result, the share price is affected. However, the share price will still revert to its normal price even though it takes longer.
The three best penny stocks to buy in 2022
The three best stocks to watch out for in 2022 are discussed below.
Ambev A.D.R (NYSE: ABEV)
Ambev is a Brazilian company that houses several well-known beverage brands. Presently, the value of ABEV is relatively low ($2.80), with a YTD drop of approximately 8.5%. However, the company has been making notable moves in the past few weeks and even posted positive results in its latest Q3. In their quarterly report, Ambev reported a 56% quarterly growth. Ambev also reported a 20% increase in its annual net revenue with a boost in its EBITDA of about 7.8%. This is an outstanding result and indicates growth in the company and its shares.
The price-to-sales ratio of ABEV is 0.61, which is relatively healthy for a low-valued penny stock. ABEV might have appeared volatile in the last few months, but because of the growth in Ambev financial, it is one of the stocks with potentials to watch for in 2022.
AcelRx Pharmaceuticals Inc. (NASDAQ: ACRX)
On New Year’s Eve, ACRX stocks recorded one of the highest gains in trades. According to EOD, the shares of the biotech penny stock have by over 12% to $0.55. This increase will have a positive impact on the company’s shares. The company recently released a new product called Dsuvia, which has recorded great sales. AcelRX has several other new products that will soon be released and promise to dominate the pharmaceutical market. If you consider all these, ACRX stock likely has a lot of potential in terms of its price in the coming year—2022.
TOMI Environmental Solutions Inc. (TOMZ)
The last few months were quite tricky for most penny stocks as they witnessed significant losses. Despite the losses, TOMZ was able to stand tall and recorded over 35% in profits. TOMI Environmental Solutions Inc. has a solid balance sheet and robust gross margin. Hence, the company’s share is predicted to experience further growth in 2022.
If you are a penny stocks investor, you should be well aware of their volatility and how easily they incur losses. Hence, it is essential to note that the penny stocks listed above are hypothetical, and there is no assurance for massive profits. However, they are recommendations that can be tried if you please. Always consider your risk tolerance before making any decision that would affect your investment portfolio. Visit Croft financial for more stocks information and the best brokerages to patronize.