3 Penny Stocks That Redefine the Meaning of Value

Lately we have been talking about penny stocks to buy and this exciting area always comes with a warning. I mean always. When you get involved in very small cap stocks, you are taking on enormous risks. I realize that this space is marketed as an ecosystem where anything can happen, but you should note that “anything can happen” also has a negative connotation.

So why do people always buy penny stocks? There is usually a spectrum in the capital markets: potential on one side and predictability on the other. The companies with the highest predictability are something like the blue chips that pay dividends. They are very predictable, but they lack robust upside potential.

On the other hand, penny stocks have extremely high potential, but at the cost of predictability. Sure, that stock with a market cap of $100 million can potentially go up 10, 20, or who knows what, right? But they can also lose 98%, 99%, or even 100%.

You have to be mature enough to realize that the possibilities with speculative ideas are endless, for better or for worse. If you can handle the heat, maybe – just maybe – these penny stocks could be interesting.

Seaenergy Maritime (SHIP)

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A shipping company, Sea Energy Maritime (NASDAQ:SHIP) provides global sea transportation of dry bulk cargo. According to its public profile, the company operates a fleet of 16 Capesize vessels. It also owns one Newcastlemax vessel. It does not seem to be one of the penny stocks to buy. However, SHIP only has a market cap of $222 million.

Still, analysts are enthusiastic about SHIP stock, unanimously rating it a strong buy. One reason is that it appears to offer reasonable value for money. Granted, the security trades at a sales multiple of 1.54 for the last year. That’s a bit on the warmer side of the underlying industry. However, it’s also important to understand that experts believe in significant growth for the shipping company.

For fiscal year 2024, analysts forecast that Seanergy will report revenue of $157.95 million, an increase of 43.3% from the previous year’s figure of $110.23 million. The most optimistic target is for revenue of $185.9 million.

And if that wasn’t enough, the company also offers a dividend yield of just under 2.7%. I call that a pretty good deal, especially for a penny stock.

Lifetime marks (LCUT)

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Based in Garden City, New York, Lifetime brands (NASDAQ:LCUT) falls into the consumer goods sector, specifically furniture, home furnishings, and appliances. According to its company profile, Lifetime designs, sources, and sells branded dinnerware, tableware, and other household products worldwide. The brands it owns or licenses include popular labels such as Farberware, Mikasa, Taylor, and KitchenAid.

In principle, it’s possible that Lifetime could see some ripple effects from the surge in home purchases during the early years of the pandemic. People bought the houses, now they need to furnish them. Granted, that hypothesis could be challenged due to the difficulties of the current consumer economy. Still, analysts rate the shares as a Moderate Buy by consensus, with an average price target of $12.75.

What is interesting here is the projected business expansion. For the 2024 fiscal year, experts expect Lifetime’s earnings per share to increase by 42.3% to 74 cents. Revenue could increase by 2.7% to $705.14 million. Similar growth forecasts for revenue and profit are available for the 2025 fiscal year.

Also, it’s worth noting that Lifetime offers a dividend yield of 1.82%. Again, I think that’s a great value when talking about penny stocks to buy.

FAT marks (FAT)

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If you really want to improve your risk-reward profile for buying penny stocks, let’s talk FAT brands (NASDAQ:FAT). You know this company for its multi-brand restaurant operation, particularly its flagship Fatburger. On its website, the label describes itself as “The Last Great Hamburger Stand” (which, by the way, is a registered trademark).

At a time when everyone is talking about sustainable calories and other holistic initiatives, it’s nice to see that there are still “gluttonous” options. In the automotive space, automakers are developing zero-emission or low-emission hybrid electric vehicles. Sometimes you just want a big old V8 engine thundering around the race track. That’s what fat brands are in the culinary world.

Analysts like the idea and rate FAT stock as a moderate buy. In addition, the average price target is $20, which means an upside potential of almost 281%. Currently, shares are trading at just 0.17 times last year’s sales, which is well below the industry average. Even better, experts predict a 31.8% increase in sales to $633.41 million for fiscal year 2024.

If that didn’t pique your curiosity, check this out: Fat Brands also offers a dividend yield of 10.67%. That’s risky because these are penny stocks to buy. But that also seems to be good value.

On penny stocks and low-volume stocks:With very few exceptions, InvestorPlace does not publish commentary on companies that have a market capitalization of less than $100 million or that trade fewer than 100,000 shares per day. That’s because these “penny stocks” are often a playground for fraudsters and market manipulators. If we ever publish a commentary on a low-volume stock that may be affected by our commentary, we require that InvestorPlace.com writers disclose that fact and warn readers of the risks.

Read more: Penny Stocks – How to make a profit without being cheated

On the day of release, Josh Enomoto had (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com policies. Publishing guidelines.