It is imperative when scouting the financial landscape for high-potential penny stocks to tread with both excitement and caution. Trading at a fraction of a dollar, these low-priced securities can generate robust percentage gains even with minor upward price movements. Such an enticing prospect undoubtedly draws investors to invest in the top penny stocks to buy.
Yet it’s crucial to remember that you’re likely to take up plenty of risk in the realm of penny stocks with upside potential. Therefore, it’s prudent only to risk what you can afford to lose when entering this challenging yet lucrative market segment.
Investing in the best low-price stocks for high returns is not a pursuit for the impatient. It often involves waiting for the right opportunity to buy speculative companies at a bargain in order to offset the inherent risk. With that said, here are three of the best penny stocks to wager on at this time.
Brandywine Realty Trust (BDN)
Brandywine Realty Trust (NYSE:BDN) is a diversified real estate investment trust (REIT) that has remained resilient despite the shifting landscape of office occupancy rates. The firm specializes in the development of office buildings and mixed-use properties. However, its portfolio presents a blend of diverse asset types, offering a strong hedge against sector-specific headwinds.
Though the pandemic disrupted office REITs, it did not detract from Brandywine’s resilience. The trust’s leasing figures have shown tenacity despite the onslaught of remote work trends and social distancing measures over the past three years.
The REIT presents itself as an interesting value play, trading at just 1.5 times forward sales and a substantial cash flow of 165.6 million in the trailing twelve months. A hefty dividend yield of approximately 16.8% is a cherry on top for income-focused investors.
Vaalco Energy (EGY)
Vaalco Energy (NYSE:EGY) is one of the most attractive energy stocks in the penny stock realm that continues to make waves despite the challenging energy markets. Stationed primarily off Gabon’s shores in the Etame Marin block, the firm has effectively navigated the turbulent waters of geopolitical uncertainty.
Though its top-line growth has slowed down due to the weakness in oil prices, it cannot take away from VAALCO’s impressively profitable operations. Notably, gross profit and EBITDA margins stand at a striking rate of 64.3% and 58.9% year-over-year, respectively. If that wasn’t enough, the strategic acquisition of TransGlobe Energy infuses a dose of stability into the company’s typically unpredictable offshore business.
VAALCO stock trades at just 1.7 times forward cash flow estimates and may witness a significant uptick with a rebound in oil prices. Add to this a robust dividend yield of approximately 4.7%, following a recent increase in the quarterly payout to 6.25 cents per share.
American Lithium (AMLI)
American Lithium (NASDAQ:AMLI) is effectively creating a place for itself in the fast-growing lithium sector. With the world’s leaders ushering in a shift from combustion engine vehicles to electric ones, lithium demand will likely skyrocket over the long term. Consequently, lithium prices are poised to escalate due to these enduring supply-demand dynamics.
Additionally, AMLI has recently secured the first of three permits from the Peruvian authorities, green-lighting drilling near Quelcaya. With operations set to commence soon, this represents a significant leap forward for the company. This development aligns with the recent supportive remarks from Peru’s new government and opens up the opportunity to discover new lithium mineralization in some of the most promising targets in the Macusani Plateau. Therefore, it’s one of the best low-priced plays in lithium that promises to continue its upward trajectory.
On the date of publication, Muslim Farooque 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
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