If you are interested in investing in penny stocks or want to learn what it’s all about, you are in the right place.
Penny stocks are great for making money because their price is low, and they can skyrocket in price.
In recent years, more people have been investing in penny stocks. But with this popularity has come a flood of scams and pump-and-dump schemes.
Penny stocks are usually associated with high risk, however, if you know which penny stocks to buy, there is potential for high returns.
While there are a ton of penny stocks out there, only a few talk about the penny stocks that matter.
This article will give you insider information about the hottest penny stocks in Canada and how to gain from their ups and downs.
What are Penny Stocks in Canada?
You may have heard of penny stocks and wondered what they are. Penny stocks are a hot topic when it comes to day trading in Canada.
Penny stocks are stocks that are currently selling for under five dollars per share. They are often very volatile, and you should be smart when trading these types of stocks.
The term penny stock has been around for many years now, but only recently have people been encouraged to trade them.
For some investors, buying penny stocks can be a great way to make some money.
However, there’s always the risk that you could lose your money if you buy penny stocks. Are penny stocks a good investment?
Penny stocks in Canada are low-priced stocks that trade over the counter (rather than on a major stock exchange).
They tend to be riskier than stocks traded on major exchanges, but the percentage payback can be enormous for those willing to take that risk.
They can be companies just starting, companies that have lost most of their value and need an infusion of capital, or simply a company that you have decided to bet on.
Can You Get Rich Through Penny Stocks?
Penny stocks can pay off big. But there’s no magic formula for getting rich on penny stocks. It’s pretty hard to do so.
Some investors have made millions of dollars on the stock market. However, the likelihood of something similar happening to you is very slim.
Although, one does hear the occasional stories about people who started with $50,000 and ended up with $10 million through speculative investments in various companies.
The term “penny stock” has a lot of baggage: small value, large risk. It’s a small market, anyone can join it, but only the most seasoned investors can come out on top.
It’s essential to remember that penny stocks are risky and very volatile. They are usually not suitable for someone with limited investment experience or trading discipline.
Therefore, if you’re looking to get rich off your penny stocks, think again. Only a few penny stocks earn enough return to make up for the high amount of risk involved.
Unfortunately, only a select few investors will be able to handle these trades; most people end up losing their investment, and some lose everything.
How Can You Find Penny Stocks in Canada?
There are several Canadian penny stocks that you might be interested in, but how can you find them?
Unfortunately, you won’t find penny stocks on the major stock exchange markets.
There are no legal venues for penny stock trading in Canada; trading is mainly done through over-the-counter (OTC) markets.
The main thing that separates penny stocks from others is their size. Most of them are too small to meet the minimum requirements to be traded on major exchanges markets.
However, there are some ways to find penny stocks in Canada and invest in them if this is what you’re determined to do.
To find Canadian penny stock companies to invest in, you can check the OTCBB online.
The OTCBB, or “over-the-counter bulletin board,” lists many publicly traded companies’ stock prices and financial information.
Companies listed on this board often represent an attractive investment opportunity since their stock prices tend to be lower than companies trading on major exchanges.
However, a penny stock company listed on the pink sheets does not disclose its financial information.
This means they can lie about expenses and activities to give investors a good impression of the company.
This is misleading and makes it impossible for small investors to make informed decisions about investing in stocks with low liquidity.
10 Best Performing Canadian Penny Stocks to Buy
Canada is a phenomenal place to find hot stocks offering significant opportunities. Below, we’ve identified 10 of the most promising Canadian stocks that are certain to give you a solid return on your investment:
1. Sangoma Technologies Stock (TSXV)
Sangoma Technologies was founded in 1984 and is based in Markham. Mainly serving B2B clients, it offers communication technologies.
These technologies were generally PBX; today, it is mostly VoIP and cloud technology.
Since 2016, Sangoma has been a consistently growing stock with a history of strong growth. The company’s balance sheet is strong, and its revenue is growing steadily.
Additionally, the company has a comprehensive product range and an average size in a relative niche market.
2. CloudMd Software & Services Inc
The Canadian-based CloudMd software development company is looking to expand into the mobile sector.
Although the company had growth in the past, stock prices for CloudMd have been dropping over the past months.
Nevertheless, now might be a great time to buy CloudMd since it may return to a bull run.
CloudMd provides virtual healthcare solutions. Telemedicine services and general medical advice fall under this category.
3. Hamilton Thorne Stock (TSXV)
Another penny stock in the tech sector that you can invest in is Hamilton Thorne.
Based in the US, it specializes in non-invasive medical diagnostic lasers and laser-based precision lasers.
Over the last five years, the company has grown consistently. Product offerings are decent at the company.
Most of the company’s revenue is generated by the consumables it sells with its instruments, so it has a steady source of income.
Furthermore, despite being a relatively niche market, it is a well-known name in a market with a diverse consumer base.
4. Drone Delivery Canada Corp
Drone delivery is a Canadian company that develops and tests its delivery technology in Canada before selling it globally.
The stock price has exploded as the company’s demonstration model is quickly bought up by eager businesses like Amazon.
Nevertheless, Drone Delivery Canada has an advantage. The company was founded in 2011 and went public in 2012.
This Canadian penny stock has been trading for about $2.00 after rising from $0.28. Nevertheless, it is now around $0.70. As a result, investors have better opportunities to buy.
5. Ventripoint Diagnostics Ltd
The stock of Ventripoint has climbed significantly in the past year. The stock has emerged from a long-term bear market pattern.
As a result of this recent trend, it’s a hot penny stock for Canadian investors. Investors will likely see significant returns if the trend continues.
Using Ventripoint, heart images can be taken. Although it is capable of an MRI, it is not necessary.
6. Kodiak Copper Corp
Since the stock was first listed in 2015, Kodiak has been volatile. There are many copper mines owned by Kodiak’s in both Canada and the United States.
Recently, the market has been trending down after seeing some significant ups and downs. If a reversal occurs soon, this provides an opportunity for investors.
Additionally, it owns a diamond mine, which it hopes to develop further. The rising commodity prices have benefitted the company’s resources.
7. NameSilo Technologies Corp
NameSilo Tech provides products for website development. It is a domain name registry company that is accredited.
The company provides web hosting, domain name registration, SSL certificates, and other web products.
There are only about 20 million Canadian dollars in market capitalization for this company.
NameSilo Tech has a low trading volume. As a result, it may be more challenging to purchase and sell.
Even so, the stock is at an advantageous price and might be an excellent time to invest.
8. BTB Real Estate Investment Trust
BTB Real Estate Investment Trust is a real estate investment trust that acquires, sells, and retains properties. The same might also apply to real estate stocks.
With 65 commercial, office, and industrial properties in eastern Canada, it is one of the best penny stocks in Canada.
As of this writing, the total number of square feet and assets owned is 5.4 million, with total assets of $924 million.
9. B2Gold Corp
B2Gold is a mining company operating in numerous countries. The company has a market capitalization of more than 5 billion Canadian dollars.
A couple of large bull runs have helped the stock climb higher over the long run. In mid-to-late 2020, it reached its all-time high.
At its peak, it was near $7 per share. Following the recent correction, it may be wise to watch this stock to see if a better buying opportunity appears.
10. HIVE Blockchain Technologies Ltd
The HIVE, a crypto mining company, is the first publicly-traded company of its kind. It strives to remain profitable, using 100% green energy.
Hence, the company utilizes hydroelectricity, solar energy, or wind power. The company mines Bitcoin and Ethereum.
Therefore, it is one of the most interesting Canadian penny stocks to consider investing in. However, it is best to be careful if you are considering investing in this company.
How Do I Buy Penny Stocks in Canada?
As penny stocks become more and more popular in Canada, many investors ask, “where can I buy penny stocks?”.
That’s valid because not everyone has access to Canadian exchanges, such as the Toronto Stock Exchange (TSX).
Therefore, if you’re interested in buying penny stocks in Canada, you have several options. You can purchase Canadian penny stocks listed on U.S. exchanges.
But if the company you’re looking to invest in is only listed on a stock exchange based in Canada Markets, then you can open an account with two several brokerages.
The easiest way is to open a brokerage account with a reputable U.S. broker that allows you to trade Canadian stocks.
With an account at this broker, you can do things like buying and selling Canadian stocks online or via phone or fax.
In addition to financial services and energy, the TSX market dominates in materials and energy. As a result, there are many great companies listed there.
Tips When Buying Penny Stocks in Canada
You need to know a few key points before getting started if you plan to succeed with penny stocks in Canada.
There are many more things to know, but I feel these are some of the most important so that you don’t lose your money.
It is essential to know that smaller companies may not have to file documents with the Securities and Exchange Commission (SEC), as larger companies are.
Because of this, it is almost impossible to determine a company’s financial health, which is why penny stocks are often regarded as merely a gamble.
However, if you want to reduce your risk, you should try buying stocks listed on the OTCQX and OTCQB exchanges.
Penny stocks listed on these exchanges will likely have accurate, timely financial information since they belong to penny stocks’ top and middle tiers.
OTC Pink stocks offer some of the highest returns, despite their high risk. OTC Pink stocks provide the lowest financial details among penny stocks.
Since these stocks are highly volatile, they have the highest potential profitability. However, the greater the reward, the higher the risk.
Nevertheless, a penny stock screener will help you narrow down your potential list of suitable companies out of the immense number of penny stocks available.
Also, trading penny stocks requires a thorough understanding of technical analysis.
As investors have limited access to accurate financial data, fundamental analysis is rarely essential in selecting stocks.
RELATED:
Ultimate Guide to Options Trading in Canada
Conclusion
Penny stocks are usually associated with high risk, however, if you know which penny stocks to buy, there is potential for high returns.
But, if you’re not knowledgeable in the stock market, it’s recommended that you employ the services of someone who is.
There are many scam penny stocks out there, so take care before investing your hard-earned money into any company.
Hopefully, now that you have gone through this article, buying penny stocks in Canada has been made easy.
So what are you waiting for? Open your door to the world of investing and trading with the best Canadian penny stocks.
Turn each issue into a profitable trade by taking advantage of our screening techniques and trading tips.
