Most investors can admit that the lure of striking it rich with just one smart pick is always there. That’s what draws traders into high-risk penny stocks.
While it’s true that some penny stocks are incredibly speculative, there’s an intriguing subset of low-cost equities that stand out due to their promising businesses and robust long-term potential. Of course, investing in them will require a healthy dose of courage.
If you have some high-risk capital you want to put to work and can stomach the volatility in return for a shot at massive gains, here are the top penny stocks for July.
Solid Power (SLDP)
Solid Power (NASDAQ:SLDP) has positioned itself as a frontrunner in the revolutionary field of solid-state battery technology. It is looking to disrupt the electric vehicle (EV) industry by creating a battery that is longer-lasting, safer and cheaper than traditional lithium-ion batteries.
Solid Power began manufacturing its solid-state EV batteries for internal testing in June 2022. If tests with partners Ford (NYSE:F) and BMW (OTCMKTS:BMWYY) go well, commercial-scale cell production could begin in 2026, said Chief Executive Officer (CEO) Doug Campbell.
Solid Power’s automotive partnerships are key, helping drive revenue up 335% in 2022 to $11.8 million. For 2023, analysts are calling for revenue growth of nearly 44%.
In December, the company said it had expanded its agreement with BMW to license its cell design and manufacturing processes to the automaker so the companies can carry out “parallel research and development activities.” Furthermore, in January, Solid Power announced it was receiving an award of up to $5.6 million from the U.S. Department of Energy to develop its solid-state battery cells.
It seems there’s plenty to look forward to with SLDP stock. Those who get in early could see huge returns as the company’s batteries near commercialization.
Cronos Group (CRON)
Cronos Group (NASDAQ:CRON) is a Canadian cannabis company. The promise of the sector has yet to pan out for investors as companies have grappled with numerous challenges, including oversupply and competition from the black market. Add to this stalled legalization efforts in the United States, and it would seem hope for a green wave has gone up in smoke.
Yet, opportunity remains as states continue to legalize the drug for medical and recreational purposes, with seven states seeing sales begin in 2022. And researcher Brightfield Group thinks the U.S. legal cannabis industry could hit $50.7 billion in annual sales by 2028, growing at a compound annual rate of nearly 10%.
Fortified with an $836 million cash reserve, Cronos is looking to seize the expansive growth opportunity as regulatory roadblocks disappear. The company’s dual approach, catering to the recreational cannabis market and research-backed medicinal cannabis market, widens its total addressable market.
Finally, with the company cutting operating expenses, management expects to be cash flow positive in 2024.
Enel Chile (ENIC)
Enel Chile (NASDAQ:ENIC) is a shining star in Chile’s drive toward a greener future, strategically positioning itself to meet the South American country’s ambitious renewable energy targets. Chile is looking to have 70% of its total energy consumption be powered by renewable sources by the end of the decade and to become carbon neutral by 2050.
Enel Chile is the largest electric utility company in Chile. It is playing a big part in the country’s sustainable energy development with 62 hydro, wind, solar and geothermal plants with a total capacity of 6.43 GW. At the end of last year, renewables constituted more than three-quarters of Enel’s generation capacity.
In short, the company is a powerful player in a country where renewable energy demand is expected to surge.
Uranium Energy (UEC)
Uranium Energy (NYSEMKT:UEC) is an emerging uranium miner focused on acquiring assets in the southwestern U.S. states. It has two production-ready projects in South Texas and Wyoming and is waiting until the price of uranium hits $60 per pound to resume production. That is less than 8% above where uranium trades currently.
The company notes that it has an annual production capacity of 8.5 million pounds and that it is unhedged, meaning it is “highly leveraged to uranium’s price compared to all other uranium miners globally.”
Additionally, its Alto Paraná Titanium project in Paraguay is one of the world’s highest-grade and largest ferrotitanium deposits. This material is an alloying additive used in the manufacturing and strengthening of steel and stainless steel.
In its most recently reported quarter, Uranium Energy saw revenue more than double on a year-over-year basis to $20.2 million. A key contribution came from winning a contract to supply the U.S. Department of Energy National Nuclear Security Administration with uranium to set up a reserve.
With no debt, this top penny stock offers an excellent way to capitalize on rising uranium demand and prices.
Vaalco Energy (EGY)
Houston, Texas-based Vaalco Energy (NYSE:EGY) is a leader in oil and gas exploration and production and a promising prospect for long-term investors interested in top penny stocks. It is primarily focused on Africa, with properties located offshore Gabon and Equatorial Guinea and onshore in Egypt, as well as western Canada.
For the first quarter, the company reported a 17% year-over-year jump in revenue to $80.4 million. However, this was below estimates, as were the company’s earnings per share of 3 cents, prompting analysts to lower their forecasts for the current quarter and the full year. Analysts are now forecasting revenue growth of nearly 19% for the full year and earnings-per-share (EPS) growth of 22%.
Over the past two weeks, EGY stock has rallied more than 13%. If OPEC countries like Saudi Arabia continue to limit output, thus driving up the price of crude oil, this penny stock is likely to move higher.
Finally, EGY offers an attractive 6% forward yield after hiking its dividend by 92% earlier this year.
American Lithium (AMLI)
American Lithium (NASDAQ:AMLI) is an up-and-coming player in the lithium sphere, where demand is being driven by the EV revolution. It has two impressive lithium projects, the TLC Lithium Project in Nevada and the Falchani Lithium Project in Peru, the latter being the world’s sixth-largest lithium deposit.
Additionally, recent permits from the Peruvian government for drilling near Quelcaya mark a significant milestone for the company. Peru’s new government, which is looking to capitalize on the lithium opportunity, and the rich exploration potential in the Macusani Plateau make for a compelling story.
The company also recently announced an investment in Surge Battery Metals and said it will advise the company in its exploration and development of the Nevada North Lithium Project. This promising claystone project could be a large-scale, high-grade deposit.
Polestar Automotive (PSNY)
Electric vehicle maker Polestar Automotive (NASDAQ:PSNY) has languished below its special purpose acquisition company (SPAC) merger price of around $10 since its market debut. Production guidance cuts and delayed vehicle launches are largely to blame. Yet, the Swedish EV maker could still become a standout brand in the premium EV segment.
For the second quarter, the company delivered a record 15,800 vehicles, up 31% from the previous quarter. This was helped by a 73% year-over-year surge in deliveries for June. Polestar expects to deliver 60,000 to 70,000 vehicles in 2023.
Q2 earnings are set to be reported in early August. For the first quarter, Polestar’s revenue grew 21% year over year to $546 million. On an adjusted basis, the company lost 10 cents per share in Q1, down from a loss of 14 cents a year ago.
While some remain skeptical about Polestar’s growth potential and valuation, I think patient investors could reap long-term rewards in this top penny stock.
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
