Penny Stocks to Watch for June 2021

Investing in penny stocks can be an incredibly frustrating and fruitless – even harmful – endeavor. (Trust me, I know – as a kid, I lost my entire life savings doing it!) But it can also be one of the weirdest and most wonderful ways to make money I can think of.

So what differentiates that first negative experience with low-priced stocks from the second, more enjoyable one? I’ve found that – in almost every case – investors who lost money through penny-stock investing went in cold and without doing enough of their own due diligence. In contrast, the investors who profited from these inexpensive equities put a lot of hard work into making completely certain they were confident in their investing choices.

In this column, my team and I put together some research on the most interesting penny stocks out there. Consider it our attempt to help you with your due diligence and achieve all your monetary goals. We hope these stock picks spark a lucrative investing journey for you.

First, Some Updates

Zovio Inc. (ZVO)

Online education provider Zovio Inc. (ZVO) was one of my favorite stock picks here back in June 2020. For most of us, it has been a fun (if a little scary) trip, with prices shooting all the way up to $7 in August 2020 and February 2021.

However, Zovio stock has fallen on hard times again recently, driven by a bad earnings report on May 12, which saw revenue and EPS dropping hugely. This wasn’t helped by the fact that Zovio is still lacking a CEO, or by management’s disappointing guidance.

At its current extremely cheap valuation, however, I’m thinking Zovio just might be a steal. It has zero debt and good financial ratios, and some good technical signals to boot. Just remember that – if historical precedent is our guide – Zovio stock tends to jump up and then tumble back down again almost just as quickly. This one may only be for readers with excellent and proven timing.

Blink Charging Co. (BLNK)

I last provided an update on Blink Charging Co. (BLNK) in February, when the stock was trading at around $60 per share. (Some context here: Believe it or not, when Blink Charging first came to my attention in 2019, it was trading at well below the $5 levels. Since then, it has skyrocketed 3,000% on the back of electric vehicle madness.)

In February, I said that I thought investors should take their gains, citing the extremely high risk associated with Blink Charging stock. Sure enough, the stock price is down to $34.00 at the moment.

Frankly, I’ve grown bearish on Blink Charging, which has become deeply overhyped to the point of absurdity on the back of EV mania. But the hysteria now looks to be wearing off, in my view, and I believe that the share price will soon start to reflect Blink Charging’s actually pretty mediocre revenue rates. That is, unless the company is able to live up to its hype. But for now, it isn’t. Period.

Williams Industrial Services Group Inc. (WLMS)

I have decidedly mixed feelings about infrastructure play Williams Industrial Services Group Inc. (WLMS) right now. I discussed this stock a few months ago, and by the time of its peak of $5.27 around the end of April, it had risen approximately 30%, a decent gain.

I then included Williams Industrial Services in “Penny Stocks to Watch for May 2021,” and shares only climbed around 6% over the past month. This isn’t altogether surprising, however, given the huge spike in value over the past couple of months. Longer-term shareholders are taking gains, which will be reflected in the price.

Will we see higher prices ahead, or is the stock’s run over for now? It’s hard to say. The company’s large backlog remains impressive, and the excitement generated by President Biden’s infrastructure plan is still running pretty hot. That said, the relative strength index suggests that the stock is close to being overbought, revenue growth has generally been mediocre, and the high debt-equity ratios are worrisome.

Whether you decide to invest in Williams Infrastructure Services comes down to your risk tolerance. But I’d like to see it start turning that backlog into money – and quickly.

Some New Ones

AmpliTech Group, Inc. (AMPG)

In my view, AmpliTech Group, Inc. (AMPG) is an excellent play on what people have been calling the “5G Revolution.” Now, before I go any further, most analysts believe 5G-related stocks have a three- to five-year wait before they start substantively reaping the rewards of the transition. So, if you’re looking for quick money, then look elsewhere.

That said, AmpliTech has its fingers in many pies, with its products providing important uses in such diverse (and lucrative) industries as the Internet of Things (IoT), satellite technology, space exploration, and the defense sector. These are all areas in which I expect to see exponential growth over the next few years.

AmpliTech had a lousy last quarter due to COVID-related business closures and cutbacks in spending. However, it maintains that “[d]espite these challenges, AmpliTech’s Request for Quote (RFQ) activity, a leading indicator of future business performance, has strengthened in recent months. The company’s backlog was $2.4 million at the close of Q1’21 and is expected to translate to increased sales in the second and third quarters of 2021.”

A new contract win from a Fortune 100 defense contractor, in addition to AmpliTech’s Board of Directors welcoming veteran industry executive Daniel Mazziota to the team, implies that the company is making good progress to revive flagging sales. At this point, AmpliTech is still relatively small potatoes. It needs to start announcing bigger deals before it can exit penny stock territory. But after a $23 million capital raise, it’s well placed to grow at least 30% in the near term, in my view – and perhaps significantly more over the longer term, once the 5G Revolution finally begins to take hold.

Entravision Communications Corporation (EVC)

Entravision Communications Corporation (EVC) is a California-based media, technology, and marketing company operating in the television, radio, and digital spaces, targeting Hispanic audiences across the United States. The past year has been a wild one for Entravision, with the stock growing 192% over the past 12 months alone.

And it isn’t hard to see why, with annual revenue growing 25% between 2019 and 2020, and quarterly revenue showing 40% and 172% growth over the past two quarters, respectively. In addition to these impressive figures, the balance sheet is pretty strong, with assets at $777 million versus liabilities at $468 million as of Dec. 31, 2020, and both quick and current ratios at a healthy level of 2.40.

All this, plus a dividend of 2.46%? At this point, EVC is looking almost too good to be true. And sure enough, before you begin your due diligence on the stock, I have an important concern to bring to your attention. Entravision was trading at only $1.25 in the fall of 2020, and it’s now priced at $4.27. As I mentioned, there are good reasons for the stock to have skyrocketed so hugely. But sometimes when a penny stock climbs too high, and too fast, then it can crash down again just as quickly.

Still, if the company is able to keep up its momentum and revive its auto sales business – as management promised would soon be the case, once supply chain issues resolve, in the most recent conference call – then the stock could be on its way back to the $7 levels it last witnessed in 2018.

Best Brokers for Penny Stocks

Interactive Brokers

Interactive Brokers’ very low per-share trading commission of $.005 ($1 minimum per trade) and up-to-the-split-second real-time margin calculations are ideal for penny stock traders. IBKR Lite clients can trade penny stocks for $0.

Charles Schwab

Schwab’s research pages point out the exchange on which a stock trades, which will keep you informed of the inherent risk. There are a variety of platforms available; the StreetSmart platforms have customizable charting and streaming real-time quotes. Schwab does not charge trading commissions on all stocks (including penny stocks) and ETFs.

Penny stocks are volatile and can generate catastrophic losses. Price levels in this article are hypothetical and do not represent buy recommendations or investment advice. Keep in mind that it’s your responsibility to make trading decisions through your own skilled analysis and risk management.

Peter Leeds is the author of several books, including the international bestseller, “Penny Stocks for Dummies.” He and his team also issue a newsletter devoted exclusively to penny stock picks and analysis, as well as a popular YouTube channel PeterLeedsPennyStocks.

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