Irrespective of the stock market’s overall performance in the coming year, there are many stocks that could nonetheless “crush it” in 2023. Included in that category are some of the hottest penny stocks out there right now.
Penny stocks, or stocks under trading for $5 per share or less, are typically riskier than shares in larger, more established companies. However, in the case of certain penny stocks, this high risk is more than outweighed by high upside potential.
At present, there are scores of small, under-the-radar stocks, with company specific-catalysts that give each a strong chance of making an outsized move higher in 2023, and in the years ahead.
Some of these stocks have already begun to take off in price, making massive moves higher in recent weeks. Others have floundered lately, yet may be on the verge of taking off, as a growing number of market participants catch onto the opportunity.
With this in mind, here are seven of the hottest penny stocks to consider entering small speculative positions in.
Assertio Holdings (ASRT)
While Assertio Holdings (NASDAQ:ASRT) has traded in a wild range throughout 2022, this volatility has been favorable in recent months. This microcap pharma stock has zoomed from around $2.25 to nearly $4 per share.
What’s driving investors back into ASRT stock? Chalk it up to two recent developments. First, back in November, Assertio delivered a well-received quarterly earnings report. Although the results themselves were mixed, with revenue up 34.3% year-over-year but earnings per share (or EPS) down 16% compared to the prior year’s quarter, both figures came in ahead of analyst estimates.
Second, just last week, Assertio’s management raised its 2022 full-year sales outlook, from $141 million to $152 million. Despite the prospect of better-than-expected results, ASRT stock still sports an extremely low valuation (7.3- times earnings). Modest multiple expansion should be more than enough to to get shares of this company out of penny stock territory.
Douglas Elliman (DOUG)
A few weeks back, I discussed seven real estate stocks to sell, and one to buy. That one stock to buy was Douglas Elliman (NYSE:DOUG). What makes this luxury real estate firm a buy, while the housing market is experiencing what could end up becoming a multi-year slump?
For starters, the prospects of an unfavorable market for realtors is already baked into DOUG’s valuation. You can buy DOUG stock today at just 9.6-times trailing twelve month earnings. The stock also currently pays out a 5 cent per share quarterly dividend, providing investors with a 4.9% annual yield, while waiting for the housing market to recover.
More importantly, this once New York-centric realtor continues to broaden its presence nationwide, When the dust settles on the current housing bust, and market conditions improves, this may result in tremendous growth for this established, yet little-known, real estate firm.
Express (NYSE:EXPR), one of the popular “meme stock” plays of 2021, continues to make “meme-style” moves. The latest such move happened earlier this month, when EXPR went from $1.28 per share, to as much as $2.14 per share, only to sink back to around $1 per share not too long after.
That said, while shares have surged and sank once again, EXPR stock may still belong in the hottest penny stocks category. Although speculators may have gotten carried away, the emerging catalyst that sparked this short-lived spike could once again propel EXPR substantially higher down the road.
As InvestorPlace’s William White reported Dec. 8, Express stock rallied due to news of the company entering a strategic partnership with brand management company WHP Global. This deal could improve the apparel retailer’s financial footing, enabling EXPR to ride out today’s challenges, and make a comeback when the economy improves.
Globalstar (NYSEMKT:GSAT) is a stock I’ve included frequently in past coverage of standout penny stocks. As you may already know, this once-obscure satellite communications firm has made big headlines this year, thanks to its partnership deal with Apple (NASDAQ:AAPL).
In a nutshell, Globalstar will enable Apple to offer satellite connectivity for the iPhone 14. As the company itself has stated, this could result in a massive improvement in its operating results starting in 2023, with its revenue and earnings numbers significantly improving by 2026.
Soaring on this news back in September, GSAT stock has sold off more recently. Shares may continue to stay in a slump in the short-term. However, I think they’re likely to take off again as the Apple deal takes shape, given that shares trade for around $1.60 per share (versus a 52-week high of nearly $3 per share). Now may be the time to buy.
I-80 Gold (IAUX)
Previously trading in the over-the-counter (or OTC) market, I-80 Gold (NYSEMKT:IAUX) uplisted to the NYSE American stock exchange back in May. Since early November, shares in this exploration-stage gold and silver mining company have experienced a tremendous jump in price.
During this timeframe, IAUX stock has gone from around $1.75 per share, to as much as $3 per share. Still near its 52-week high, and still one of the hottest penny stocks out there, investors may want to consider adding a position. Indeed, I-80 Gold hasn’t soared higher on hope and hype.
Rather, IAUX has rallied on the heels of promising drilling news at its mining projects. I-80 has so far discovered substantial measured an indicated reserves of gold (6.47 million ounces) and silver (104.3 million ounces). With low all-in sustaining costs, the company could become highly profitable as it moves into its production stage.
Jerash Holdings (JRSH)
Rampant inflation and dwindling consumer savings may make now not seem like the time to buy Jerash Holdings (NASDAQ:JRSH). These headwinds have already affected the apparel maker’s fiscal results. Last quarter, Jerash reported a 17.3% drop in sales, and a 61.4% drop in earnings per share, on a year-over-year basis.
So then, why buy JRSH stock, when the current situation seems to be not-so-hot? Even as the business isn’t “hot” at present, when macro uncertainties clear up, a rebound in Jerash’s profitability could make this micro-cap value play a great buy.
How? Well, sell-side estimates call for the company’s earnings per share to hit 69 cents in fiscal year ending March 2024, and $1 by fiscal year ending 2025. If JRSH simply maintains its current forward price-to-earnings (or P/E) ratio of around 11.5, that could mean the stock soars up to $11.50 per share in a few years, from $4.36 per share today.
Pitney Bowes (PBI)
After falling from $6.75 to as low as $2.30 per share between January and September, Pitney Bowes (NYSE:PBI) made a tremendous leap back up towards the “penny stock ceiling,” changing hands for around $4.25 per share today.
But instead of merely being a “dead cat bounce” for this maker of postage meters and mail pre-sorters, this may be merely the first few innings of an extended PBI stock comeback. Pitney Bowe’s impressive rebound has been the result of Hestia Capital’s involvement with the company.
If it wins a planned proxy fight next year, and gains control of the board, this deep value-focused hedge fund may be able to implement a successful turnaround plan. I wouldn’t assume Hestia’s campaign at PBI will result in results similar to that of Hestia’s previous activist campaign at GameStop (NYSE:GME), but this could still be an activist situation worth wagering on.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.