Best Industries to Find Penny Stocks In? Check These 3 Out
As investors, we’re always looking for the best penny stocks to buy. And a big part of that is understanding which industry may have the most value moving forward. So, while finding individual winning penny stocks is a great way to stay ahead, looking at broader industries can help tremendously. This allows you to identify trends, and find multiple companies on the long list of penny stocks that could benefit.
Investing in Penny Stocks in 2021
In 2021, there are a few things that all investors should understand. The first and most important factor right now is Covid. As a result of the pandemic, we’ve seen volatility soar to new heights in the past year and a half.
And with the Delta variant still wreaking havoc around the world, it doesn’t look like the pandemic is coming to an end anytime soon. However, as September gets off to a bullish start, many investors are showing heightened comfortability with the current trajectory of the pandemic. And this means that we could continue to see bullish trading action if all remains the same.
In addition to this, we have to factor in certain economic conditions such as high inflation in the U.S. and different geopolitical factors. But, altogether this has created a market that tends to fluctuate greatly. And as a result, penny stock investors can benefit from this high volatility. So, considering all of this, let’s take a look at three industries that penny stocks investors need to take a look at in September.
3 Industries For Penny Stock Investors to Watch
- Tech Penny Stocks
- Biotech Penny Stocks
- Entertainment Penny Stocks
Tech Penny Stocks
Since the start of the pandemic, tech penny stocks have been on fire. While it began as a focus on companies that were aiding with Covid-daily life such as ed-tech and work-from-home, it has evolved into much more.
Now, more than a year and a half since the start of Covid, we are facing a chip shortage, high demand for new tech products, and increasing cases as a result of the Delta variant. And all of this has created a perfect storm for the further growth of the tech industry. But, in order to find the best tech penny stocks to buy, there are a few things that investors should understand.
First and foremost is, what does the company do? Does it produce microchips, tech products, software, or a mixture of all of the above? And second, what does the outlook look like for its product and the larger market it works in? These are all extremely important questions and should be considered before investing in any tech penny stock.
As stated earlier, the microchip shortage has resulted in vastly increased demand for the chips that power almost every product we use today. So penny stocks working in this area could be worth keeping a close eye on. Considering all of this, will tech be on your penny stocks watchlist?
2 Tech Penny Stocks to Watch
Biotech Penny Stocks
Another industry that has benefitted tremendously from the pandemic is biotech. This one is rather obvious, as the pandemic has emphasized the need for new and better Covid treatments. And while this began as a focus on companies doing just that, it quickly evolved into a broader market focus. Now, investors are searching for biotech penny stocks that could have long-term growth.
When it comes to biotech, investors should look at a few things in particular. First and foremost is its pipeline. What drugs does the company have in the research stage, and how far along are those drugs in the approval process? This is a great way to gauge the potential revenue that a biotech company could have. Second, investors should look at the company’s balance sheet. This will give insight into its financials such as revenue, debt, and most importantly, how much cash on hand it has.
Cash on hand is a very important metric as it provides a proper financial runway for growth. This means that companies can continue to research new drugs as well as push existing ones through the various study phases. Because testing and researching drugs can be extremely expensive, free cash remains an important statistic to judge a company by. With all of this in mind, do you think that biotech penny stocks are worth watching right now?
2 Biotech Penny Stocks to Watch
Entertainment Penny Stocks
While entertainment penny stocks have had their fair share of ups and downs, many investors believe in their long-term future. Understandably, as the pandemic took hold, stocks in the entertainment industry dropped dramatically. But as time went on, those same stocks started to climb as people felt comfortable going out once more.
And now in September 2021, with a large portion of the public fully vaccinated, many venues have opened back up fully. This has resulted in revenues increasing, and companies returning to some sort of normalcy. While entertainment stocks can be worth it, it is important to consider that these stocks also tend to be highly volatile.
In addition, they also have a high correlation to case numbers and the pandemic as a whole. This means that if you’re interested in buying entertainment penny stocks, you should make sure that you stay as up-to-date as possible with all the latest pandemic-related news. But, with case numbers beginning to show some signs of decline in the U.S., many are turning their heads toward the entertainment industry once again.
2 Entertainment Penny Stocks to Watch
Which Penny Stocks Are You Watching Right Now?
Finding the best penny stocks to buy no matter the industry all depends on your own strategy. By creating an individualized investing method, traders can ensure that their portfolio aligns with their goals.
Considering that there are so many moving parts to the stock market right now, it can be complicated to pick the best stocks for your list. But, with a lot of hope surrounding the future, penny stocks remain hot investments right now. With all of this in mind, which penny stocks are you watching right now?