The stock markets have been turbulent since the start of 2022, to say the least. Between inflation, war, food insecurity, stock market volatility, an approaching recession, and whipsawing energy prices, investors are torn between taking cover and chasing the numerous opportunities.
There are plenty of compelling investments right now—not only in spite of the overall economic commotion, but in some cases because of it. In the realm of penny stocks, here are a few interesting investments that should perform well during a time that most stocks will be under pressure.
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 the newsletter will clearly indicate that fact. Please note that penny stocks are notoriously volatile.
Penny Stock Review
Smith Micro Software, Inc. (SMSI)
Mobile software provider Smith Micro Software, Inc. (SMSI) has had a mixed performance over the past month, inching down 3.53% during that time but recovering slightly by 5.13% over the past week.
Despite that somewhat unimpressive showing, the investment case for SMSI is still looking strong. Earnings per share (EPS) are projected to soar more than 160% next year, with Tier-1 carriers set to adopt the company’s SafePath application onto their phones. A gross margin of 75% also speaks to the strength of the company’s operations.
Wrap Technologies, Inc. (WRAP)
Investors in Wrap Technologies, Inc. (WRAP), a public safety technology company, have been on a rollercoaster ride lately. For much of June, the stock more or less traded sideways–until Friday, June 24, when Wrap Technologies stock suddenly ascended all the way to $3.50 price levels, without any news flow to support the move.
Although the climb was short-lived, Wrap Technologies’ financials suggest that it may still have untapped potential at its current $1.98 price point. Consider its bulletproof balance sheet, featuring double-digit quick and current ratios, as well as zero debt/equity. EPS are also set to grow a decent 22% next year.
That said, if the company can’t get its act together soon in terms of growing its meager sales, then readers may want to consider cutting their losses on the stock.
New Stocks to Watch
NetSol Technologies, Inc. (NTWK)
NetSol Technogies, Inc. (NTWK) is a maker of software for the automobile and banking/finance sectors. A glance at the company’s dashboard reveals some nice-looking financials. These include a price-to-earnings (P/E) ratio of 10.83x, price/earnings to growth (PEG) ratio of 0.39x, price-to-free cash flow (P/FCF) of 3.70x, and book/share value of 4.54.
In addition, a solid balance sheet (with current assets outweighing current liabilities by 2.30x and very low debt) inspires confidence in the company’s ability to navigate the rough recessionary waters ahead. EPS are projected to grow a healthy 28% over the next five years. CEO Najeeb Ghauri has said, furthermore, that NetSol is set to achieve 10% sales/revenue growth in 2022 as well as 20% growth in recurring revenues.
These fundamentals and the renewed focus on the software-as-a-service (SaaS) model suggest that NetSol stock is cheap at its current price of $3.18 and an excellent value.
OMNIQ Corp. (OMQS)
In the words of OMNIQ Corp. (OMQS), the company “uses patented and proprietary AI technology to deliver data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic and parking management and access control applications.” In the most recent conference call, management estimated the size of all the markets it caters to as being worth $27 billion. CEO Shai Lustgarten says he believes that this number could rise to $70 billion in the next three years.
Aside from a large and growing potential market, OMNIQ is showing some compelling momentum. As of December 2020, for example, annual revenue was reported at $50 million before hurtling toward $78.25 million in December 2021. In December 2022, annual revenue is projected by management to be $105.77 million, before climbing once more to $130 million in December 2023. Furthermore, the company is guiding for EPS next year to soar 125%.
Obviously, because these are the company’s own projections, they should be taken with a grain of salt. But solid evidence of OMNIQ’s growth can be seen in its most recent results for the first quarter of 2022, with gross profit rising 132% from the same quarter in 2021, and revenue rising 33% during the same period.
Image and article originally from www.investopedia.com. Read the original article here.