Penny stocks are like a wild rodeo, a white-knuckle ride. Eager investors are ready to own them, risking a tumble but set for a shot at the jackpot. Not all these small fries are cut from the same cloth. Some are rotten to the core, masked by a shiny hull, while others, the rare few, offer a blend of promise, grit, and gusto. So, here are three underdog penny stocks that just might be singing that sweet song of success.
Standard Lithium (SLI)
Standard Lithium (NYSE:SLI) is like a phoenix, rising from the ashes. The lithium market took a nosedive, leaving the investors skittish. However, such desolation might be the perfect entry point for the keen-eyed. Standard Lithium plunged by a gut-wrenching 71% in the last 12 months, making it a risky penny stock. But if lithium sparks the market again and stays lit, the tides could soon turn. Analysts are predicting a lithium drought as soon as 2025, tilting the scales in favor.
The real kicker for this stock is securing project funding. If Standard Lithium pulls in the big bucks, watch out – the stock is about to blast off. The company’s key asset huddles a net present value of around $4.5 billion, but it needs an investment of $1.2 billion to get there. If they bag the funding, the commercialization could be on the horizon, possibly in 2026 or 2027.
Bitfarms (BITF)
Bitfarms (NASDAQ:BITF) is in the throes of the cryptocurrency frenzy. With Bitcoin (BTC-USD) slated to make waves, Bitfarms is positioned to ride the tsunami. Should Bitcoin crest over $100,000, BITF stock could yield returns upwards of 5x or even 10x. If Standard Chartered’s prophecy of Bitcoin touching $200,000 by the close of 2025 holds water, BITF stock will erupt, making 10x returns sound like small fry.
While stability is key, Bitfarms is revving up its business. The company sits on a cash hoard of $118 million, as of December 2023. On top of that, the shackles of debt are soon to be cast off, rendering Bitfarms untethered and financially nimble. The company is set to triple its hash rate capacity from 6.5EH/s to 21EH/s this year. With a triple jump in capacity, Bitfarms is on track for meteoric growth, coupled with a gush in cash flows.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) is the dark horse among penny stocks, poised to deliver returns of 5x or 10x. Though the stock’s sails have been caught in a tough wind, the business remains on a high. Furthermore, should the federal government decide to give the nod to cannabis, 5x returns could be just around the corner.
Tilray reported record revenue of $194 million in Q2 2024, marking a 34% leap from the prior year. The company reigns as the leader in the European medicinal cannabis market, driving up international cannabis revenue by 55% for the quarter. Not content with cannabis alone, Tilray made a spate of acquisitions last year, propelling it to the position of the fifth-largest craft beer brewer in the U.S. With diversification, the company is all set for steady growth. Additionally, the company foresees positive adjusted free cash flow for the fiscal year 2024. As the cash flows swell, Tilray is geared to make bold investments, bolstered by robust financial freedom.
