Best Penny Stocks in 2022: Top 4 Growth Prospects to Watch
There’s nothing worse than checking your watchlist to find the penny stock your gut told you to buy last week running over 1,000%. Even though these investments are high risk, they also offer high reward potential. With this in mind, the best penny stocks in 2022 will be hard to come by, but not impossible.
Penny stocks are generally considered assets trading under $5 a share. That said, some investors strictly use the term to describe stocks trading for pennies.
At any rate, some of the most successful companies around us started as penny stocks. For example, Monster Beverage (Nasdaq: MNST) and Apple (Nasdaq: AAPL), two of the highest returning stocks of the past decade, started as pennies.
So, it is possible to find the hidden gems amongst the madness. Having said that, keep reading to find the best penny stocks in 2022 for your chance at big growth.
How to Find the Best Penny Stocks in 2022
So far, it seems growth opportunities will be harder to come by in 2022. With growth stocks falling as investors price in changing economic conditions, the chances to find the next runner will be challenging.
At the same time, there will always be opportunities in the market. The hard part is blocking out the noise to find them.
Instead of tracking companies with little to no potential to turn a profit, look for growing financials with immense market potential. The last thing you want to do is chase a penny stock because it’s trending. Because it’s more than likely, the asset will give back the returns and more.
Having said that, these are some of the best penny stocks in 2022 to keep an eye on.
No. 4 Denison Mines (NYSE: DNN)
- Focus: Uranium
- Revenue Growth (1 Year): 248%
As the name implies, Denison Mines is a mining company focusing on Uranium exploration. As clean energy is becoming a primary focus for governments around the world, nuclear is becoming a massive part of it.
In fact, nuclear energy is the second-largest clean energy source behind hydropower globally. Furthermore, you create nuclear energy by splitting uranium atoms. So as nuclear becomes more widely used, so is the demand for uranium.
What’s more, Denison has a 95% interest in the Flagship Wheeler project, focusing on high-grade uranium. In particular, the project has two of the highest-grade Uranium in Phoenix and Gryphon.
DNN stock is up over 80% in the past year, with uranium prices soaring. As clean energy continues becoming a priority, look for Denison to continue its momentum as one of the best penny stocks in 2022.
No. 3 Arcadia Biosciences (Nasdaq: RKDA)
- Focus: Crop Productivity & Quality
- Revenue Growth (1 Year): 657%
Arcadia Biosciences is an agriculture tech company focusing on improving crop productivity and quality. The company designs crops and crop technology to improve yields and meet the growing demand for healthy food.
The company’s portfolio includes products like GoodWheat, GoodHemp and Zola coconut water. On top of this, Arcadia has body care lines that offer body lotion, bath bombs and pain relief.
Not only that, but Arcadia has the distribution channels plans in place to grow the brand. So far, the company has brick-and-mortar stores with plans to launch an online site and food service.
Despite RKDA stock being down over 80% from its highs, its top line is growing rapidly. With well over 100% growth in its last four quarters, Arcadia is making a case to be one of the best penny stocks in 2022.
No. 2 Charles and Colvard (Nasdaq: CTHR)
- Focus: Fine Jewelry
- Revenue Growth (1 Year): 30%
Founded in 1995, Charles and Colvard sells fine jewelry around the world. In particular, the company sells moissanite & lab-grown diamonds for engagement rings and other fine jewelry.
The fine jewelry company sells its moissanite under its own brand and its premium brand Forever One. What’s more, the company sells its products to 3rd parties and through its growing online store.
With this in mind, people are buying engagement rings online more than ever. In fact, one-in-four millennials now look online for their rings.
The company is capturing a piece of the transition with double-digit revenue growth in each of its last four quarters. Not only that, but the company is profitable with growing margins.
CTHR stock is up nearly 100% since last year as growth continues lifting it. If the stock can break out of its over 10-year downturn, the CTHR shares have a lot of room to run, with all-time highs over $25.
Keep reading for more info on the best penny stocks in 2022.
No. 1 Orion Energy (Nasdaq: OESX)
- Focus: Energy Solutions
- Revenue Growth (1 Year): 10%
After an explosive rally in 2020 in which Orion returned over 200% to investors, the stock has since been disappointing. With this in mind, shipping and logistics issues prevent the company from furthering production.
Yet the company is getting back on track, with revenue growing over 10% in the latest quarter. Also, the company is raising its prices, which will improve its margins as we advance.
Even though Orion is experiencing issues with international projects, the national accounts in the U.S. are providing stable growth.
Furthermore, Orion’s High Bay light fixture now ranks No. 1 for energy efficiency. As companies and other organizations look to cut down on costs, energy is generally the first place to start.
As supply chain issues continue improving, look for Orion stock to build its momentum again.
Looking to Earn a Return from the Best Penny Stocks in 2022? Here’s What to Know
Although penny stocks are very risky in many cases, some companies are simply undervalued. There are several reasons a company can be undervalued.
First, if they have bad earnings, it can lead to a cratering stock price. If a company loses investor trust, it can be hard to earn back. At the same time, guidance plays a vital role in future earnings. Companies that lower guidance often see their stock prices fall significantly.
Secondly, the company can still be in its growth phase. Without established profits to show, institutional investors will stay away in many instances.
And lastly, many of these companies are in unique, growing markets with high-risk, high-reward potential. These are some of the best penny stocks in 2022, looking to further their positions.
That said, despite investing being a risk in itself, penny stocks give you a higher exposure risk than, say, blue-chip stocks. It’s a good idea only to invest what you are willing to lose in penny stocks.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.