Anyone looking for the best penny stocks under $3 has come here to speculate. And that’s fine, provided you are willing to assume the risk that goes along with it. Because with any publicly traded company with a share price this low, there’s a reason — and typically not a good one.

Any of the companies on today’s list of the best penny stocks under $3 could fall to $0. Still, having experienced firsthand the joys and life-changing gains of speculation myself, it is possible – though not probable – that some of the names below could make you rich.

It’s going to require nerves of steel. More importantly, you must be honest with yourself. Can you handle moving on if circumstances go awry? Because more than likely, they will.

Nevertheless, if you’ve found yourself here, you’re probably looking to scratch that itch. To help you do so in a safer – which, to be clear, does not mean safe – way, I used GuruFocus to extract the most compelling ideas for the best penny stocks under $3.

Good luck, because you’re going to need it.

Best Penny Stocks Under $3: Profire Energy (PFIE)

If you followed my other recent InvestorPlace columns, you’ll note that I’ve talked about Profire Energy (NASDAQ:PFIE) quite extensively. While I don’t mean to keep going to the same well, Profire delivers the goods regarding speculative market ideas. For the uninitiated, the company is an oilfield technology specialist. On a year-to-date basis, PFIE stock is up 5.7%.

Shares have gained 12% since the company reported earnings after the close on Nov. 2. Profire came out with earnings per share of 2 cents, meeting the Zacks Consensus Estimate. Amid this dour market environment, the alignment with expectations basically translated to a win for the stock.

Profire makes the cut for one of the best penny stocks under $3 to buy because of its balance sheet. Specifically, the company features a cash-to-debt ratio of over 53 times. This stat ranks better than nearly 82% of the competition, affording the company significant resilience.

B2Gold (BTG)

Based in Vancouver, British Columbia, B2Gold (NYSEAMERICAN:BTG) is a mining firm as you might ascertain from its branding. Specifically, the company owns and operates gold mines in Mali, Namibia and the Philippines. BTG stock is down nearly 20% since the beginning of the year.

To be fair, the Federal Reserve’s efforts to curb the soaring money stock to control inflation don’t immediately help BTG.  Fundamentally, though, it might be worth keeping tabs on B2Gold because of the fear trade. With uncertainty surrounding the global economy and central banks on a rate-hiking spree, gold may regain its luster as a safe haven.

Higher gold prices would obviously bode well for BTG, but a look at the company’s income statement shows its firing on all cylinders anyway. Its three-year revenue growth rate stands at 16.4%, better than 73% of its rivals. On the bottom line, B2Gold’s net margin of 13.7%, beats out nearly 82% of the industry. Tack on a solid balance sheet and you have a good case for it being one of the best penny stocks under $3 to buy.

Best Penny Stocks Under $3: PharmaBioServ (PBSV)

Headquartered in Puerto Rico, PharmaBioServ (OTCMKTS:PBSV) plies its trade in the life sciences industry. Specifically, it is a consulting firm that offers compliance and technology transfer services to companies in the pharmaceutical, chemical, biotechnology, medical device, cosmetic and food industries. Since the beginning of this year, PBSV stock has given up 15.5% of its equity value.

As an over-the-counter stock, PBSV will likely face administrative risks, such as wide bid-ask spreads. In addition, investors need to watch out for liquidity (average share volume). If not enough people trade the security, your profits might not matter.

Nevertheless, what’s intriguing about PharmaBioServ is that the company enjoys a strong balance sheet. Primarily, its cash-to-debt ratio stands at 27.3 times. For comparison, the healthcare providers and services industry’s median cash-to-debt ratio is only 0.89 times.

Parks! America (PRKA)

Billed as the nation’s best drive-thru animal park, Parks! America (OTCMKTS:PRKA) brings engagement to another level for its visitors at its locations in Georgia, Missouri and Texas. The stock is down 43% year to date to trade below 40 cents per share, making it the lowest-priced equity on today’s list of the best penny stocks under $3.

While the stock is incredibly risky, the company knows how to ring up the top line. According to data from GuruFocus, Parks! America features a three-year revenue growth rate of 24.9%. That’s better than almost 94% of companies in the travel and leisure industry. And the company’s free cash flow growth rate during the same period came out to 27.4%, coming in above 70% of the competition.

On the bottom line, Parks! America knows how to deliver the goods. The enterprise’s net margin stands at 9.2%, higher than nearly 72% of the competition. The company also features a high-quality business as demonstrated by its return on equity and assets ranking among the top half of the industry.

Best Penny Stocks Under $3: Mind C.T.I. (MNDO)

Based in Israel, Mind C.T.I. (NASDAQ:MNDO) is a global provider of billing and customer care solutions for voice, data, video and content services. In addition to Israel, Mind has offices in the U.S., Romania and Germany. Since the beginning of this year, MNDO has given up over 33% of its equity value.

On a fundamental basis, what’s most attractive about the company is its balance sheet stability. Specifically, the company features a cash-to-debt ratio of 12.7 times. For comparison, the software industry has a median cash-to-debt ratio of only 3.2 times. Therefore, should unforeseen circumstances materialize, Mind is better positioned to ride out the storm.

In addition, the company brings tremendous profitability to the mix. Its net margin pings at nearly 24%, ranked higher than 93% of its rivals. As well, Mind offers a high-quality business with a return on equity of over 26%. Finally, MNDO trades at 7.4 times trailing-12-month earnings, which is low for the industry. Thus, it appears to be a surprisingly solid deal among the best penny stocks under $3.

Auto Trader (ATDRY)

Auto Trader (OTCMKTS:ATDRY) is a British automotive classified advertising business. Per its public profile, it specializes in new and second-hand automotive sales, including cars sold by private sellers and trade dealers. Since the start of the year, ATDRY stock has dropped 41%.

To put it bluntly, the company faces serious headwinds in the near term. Rising inflation isn’t doing any favors for consumer sentiment and some people are likely to put off new vehicle purchases. However, for many people, transportation is not a discretionary purchase. Therefore, Auto Trader could make an intriguing contrarian bet.

The company features stability in the balance sheet. Notably, its Altman Z-Score of 48.4 points reflects extremely low bankruptcy risk. Also, Auto Trader’s net margin of 56.6% ranks better than 96% of the competition. If you want to roll the dice, ATDRY may be one of the best penny stocks under $3.

Best Penny Stocks Under $3: Alkane Resources (ALKEF)

Alkane Resources (OTCMKTS:ALKEF) is an Australian gold producer. Currently, most of the company’s projects are located in the central west region of New South Wales. However, its total footprint extends across Australia. Shares are down more than 41% so far in 2022.

As with B2Gold, Alkane investors should expect a bumpy ride. Again, if the Fed continues to aggressively hike interest rates, gold prices will remain under pressure. At the same time, investors may look for some semblance of elemental stability during these wild times. With gold enjoying universal intrinsic value, ALKEF could be an interesting play.

GuruFocus rates Alkane’s shares as significantly undervalued. At the moment, ALKEF trades for 4.9 times trailing earnings. In contrast, the industry’s median level is 10.5. Finally, Alkane represents a high-quality business as reflected by its upper-echelon return on equity of nearly 30%.

On the date of publication, Josh Enomoto did not have (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.

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, Josh Enomoto did not have (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.