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Are you thinking about investing in penny stocks ? If so, choosing the best stock picks to add to your portfolio is important. After all, while penny stocks can produce meaningful returns, they’re also riddled with risk.
These stocks represent young companies that haven’t quite proven their ability to generate significant profits. They’re often in the research and development stages, or they may be in the early stages of business. In either case, there’s typically a high risk of failure among these companies.
On the other hand, if you choose to invest in the right penny stocks, you could produce significant returns. Keep in mind that NVIDIA , Amazon.com, and several other companies that are massive today where penny stocks if you adjust there IPO prices for splits.
One way to make strong penny stock picks is to look for those that analysts expect to produce significant earnings growth. Below you’ll find three penny stocks that analysts believe will grow their earnings by 50% or more this year.
Key Points
- Penny stocks are risky, but they could produce significant gains.
- Dynagas LNG Partners, Lantronix, and Smart Share Global are all expected to grow earnings significantly this year.
- Check out this report to learn about the next NVIDIA-like opportunity.
What Are Penny Stocks and Why Are They Risky?
Before we get into the penny stocks analysts are expecting to grow earnings by 50% or more this year, you should have an understanding of what these stocks are and where the risk associated with them comes from.
Penny stocks are publicly traded companies with a share price under $5. These companies typically have low market caps, and they’re either relatively young or haven’t proven their ability to generate meaningful earnings. As young companies, they have a higher probability of failure than their small-cap, mid-cap, large-cap, and blue-chip counterparts.
Dynagas LNG Partners Could Fuel Meaningful Growth
Founded in 2013, Dynagas LNG Partners (NYSE: DLNG) is a master limited partnership that is focused on the production of liquid natural gas (LNG). The company acquires LNG carriers, which international energy companies charter on a multi-year basis. At the moment, the company owns six LNG carriers, and those carriers are helping it generate impressive income and earnings.
In 2023, Dynagas LNG Partners generated earnings per share of $0.66. And those earnings could grow significantly this year. At the moment, only one analyst is weighing in on the stock, but that analyst has an overwhelmingly positive opinion. They expect earnings to come in at $1.10 per share this year, but that’s not the only positive point the analyst made.
The analysts rated the stock a Buy and set the price target at $4.50 per share. Considering the current price of under $3.90 per share, that price target sets the stage for significant growth ahead.
Lantronix Could Go From Losses to Profits
Lantronics ( Nasdaq: LTRX ) is a technology company that’s focused on the Internet of Things (IoT). The company offers technology that helps businesses track devices and device usage, enhance security within their IoT ecosystem, and more. It provides hardware, software, and services for various industries and enterprise-level clients.
According to the average among five analysts, the company is also set to go from annual losses to annual profits this year. In 2023, Lantronix produced a $0.25 loss per share. But in 2024, analysts expect the company to earn $0.41 per share.
It’s also worth noting that all analysts who currently cover LTRX have positive opinions. Three of the five rate it a Buy, while the other two rate it an Outperform. The consensus price target is $7 per share, which makes this stock an appealing one to consider.
Smart Share Global Could Give Your Portfolio a Boost
Smart Share Global (Nasdaq: EM) is a Chinese phone and device charging solution company. The company sells charging cabinets to third-party operators like restaurants and offers advertising, payment, and other services.
That business plan is expected to pay off according to the two analysts that are currently weighing in on the stock. Last year, Smart Share Global earned $0.04 per share. But this year, analysts expect the company to produce $0.49 in earnings per share — that’s more than 1,200% growth over last year!
Those analysts also share other positive opinions about the stock. Both rate it a Buy, and the consensus price target is $12.61. With a current price of around $0.73, Smart Share Global could produce powerful growth ahead if analysts are correct.
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