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 talks 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.
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)
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 new niche market.
Pros and Cons
- It enhances the flow of communication technologies to its B2B clients.
- Their technology is used in PBX but now they have advanced to VoIP and cloud.
- It can be risky
- Products it offers includes PBXact, Switchvox, FreePBX, SIPStation, Session, Border Controllers, elephony Cards and VoIP Gateways
- Traded as TSX and STC
- Has an inbuilt strong balance sheet
- It has a decent-sized player with safe investment for high returns in Canada.
- I found out that they operate on a comprehensive product line.
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.
Pros and cons
- It offers health technology solutions
- Provides services for many people and doctors
- It is a strong DOC ticker
- I found out that they focus on digitizing healthcare and facilitating telemedicine.
- It’s risky
- Investors buy stocks with the burden of debt
- It has an app for easy accessibility
- Built for doctors and digital healthcare as a whole
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.
Pros and cons
- Operates on a diverse decent product range.
- It has a diverse consumer base and distributors all across the world.
- It’s the intrinsic value relative to the price that matters the most to them.
- They focus on precision laser
- Their niche also includes building medical diagnostic tools that use these lasers.
- Sells instruments/products, which is their stable income stream.
- It’s a leader/well-known name in a relatively niche market.
4. Drone Delivery Canada Corp
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.
Pros and Cons
- Helps to improve logistics efficiency
- Save logistics costs
- Promotes the economy of underdeveloped areas
- High starting investment cost
- Vulnerable to the weather.
- Security risks
- Has electronic speed controllers, which control the speed and direction.
- Built with a flight controller
- A GPS module delivery AI
- Uses battery
- Has an antenna and receiver gadget
- Cameras are on a delivery drone
- Has sensors like ultrasonic sensors and collision avoidance sensors.
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 probably 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.
Pros and Cons
- Sells Ventripoint Medical System (VMS) equipment and you can invest
- They enabled VMS+ software to be installed on any personal workstation.
- I found that their knowledge Based Reconstruction (KBR) enables them to construct a 3D model of the heart. It goes further to calculate volumes and ejection fractions for all chambers.
- It involves risk
- The key feature is that it is used in the development and commercialization of diagnostic tools that monitor patients with heart disease
- Has a VMS+ which is a diagnostic aid. Replaced the need for magnetic resonance imaging (MRI) used as a care solution to communicate the heart’s structure and function.
- Their VMS+ is designed to create a three-dimensional (3D) model of the heart from a two-dimensional (2D) echocardiogram.
- Their VMS+ also allows cardiac metrics on all four chambers of the heart.
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.
Pros and cons
- Can come with a huge return on investment
- Owns a diamond mine, which it hopes to develop further
- Has many copper mines to invest in
- It is volatile
- It is naturally a copper mine
7. NameSilo Technologies Corp
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.
Pros and cons
- NameSilo Tech provides products for website development.
- No loss of property or name because it has a domain name registry company that is accredited.
- Challenging to purchase and sell
- Has a low trading volume
- Their services come in web hosting, registration, SSL certificate and other web products.
8. BTB Real Estate Investment Trust
is a real estate investment trust that gains, sells, and keeps 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.
Pros and Cons
- Potential for diversification
- Transparency and real
- Consistent and stable cash flow through dividends
- Competitive risk-adjusted returns
- Has low growth level
- They tax dividends as regular income to investors
- Subject to risk
- Has a high management level
- High transaction fees
- Built for global reach and has a diversified product range.
- BTB REIT is a commercial publicly traded stock, which makes them highly liquid unlike physical real estate.
- REITs investment is mostly real estate property including apartment buildings, warehouses, offices, e.t.c .
9. B2Gold Corp
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 it’s 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.
Pros and Cons
- Consistent improvement on its exploration projects.
- Has great ways to diversify your portfolio
- Has told to hedge against inflation and market fluctuation
- A persistent uptrend in prices
- The company offers dividends as yields
- Listed on the Toronto Stock Exchange and then New York Stock Exchange and the Namibian Stock Exchange. You can buy it from here.
- Company in Canada but mines its goods in the Philippines.
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.
Pros and cons
- It gives you a great way to invest in crypto-assets and is one of the best crypto exchanges in Canada
- Takes advantage of high growth potential in registered tax-sheltered accounts.
- Deals with an international portfolio of mining assets.
- It also mines Ethereum
- They diversify within the asset class
- Highly volatile in nature
- Gives one exposure to one of the most volatile asset classes like crypto.
- It is Penny Stock
- It’s built to operate in Canada, WSweden and Iceland and mining is 100% green
- They also built hive as a Tech stock
- They claim they use 100% green power. Like solar, wind, hydroelectric energy or a combination of the three.
Canadian Penny Stocks Overview
In Canada, penny stocks trade on various platforms. These platforms include:
- Toronto Stock Exchange (TSX),
- TSX Venture Exchange,
- Canadian Securities Exchange, and
- NEO Exchange.
Penny stocks are stocks traded at less than $1 each. But most investors in Canada consider stocks that trade for less than $5 apiece to mean penny stocks.In Canada, most companies whose shares trade at less than $5 each are seen as small companies in terms of market capitalization and are not known. However, when a Canadian publicly-traded company grows big enough, graduates by moving to the TSX from the TSX Venture Exchange.While penny stocks in Canada trade on larger exchanges like the TSX and NYSE, they are usually associated with smaller companies.
Pros & Cons of Penny Stocks
- Penny stocks’ major potential is to get rich quick, there’s actually a big trill to the chase
- They issue penny stocks to boost equity capital for small companies who are just starting or regaining from bankruptcy.
- Most penny-stock companies can explode upward within days with the right investment opportunity and investors turning to tomorrow’s big winners.
- Canadian penny stock shares are cheap and affordable.
- When prices for penny stock Canada shares rise, the potential to make money is massive especially if you have bought at a cheap price.
- It is a do-it-yourself platform. With this, you see everything about trading yourself.
- Gains are more rapid and speculated
- With the low price, you can buy within your budget. It permits you to trade within your budget.
- Can increase your potential savings and trading more.
- Canadian penny stocks have huge risks. When I speculate prices are still going up and I buy in a high amount, prices might drop drastically. Moreover, most investors who buy Canadian penny stocks make little or no profit.
- Penny stocks aren’t tracked by mainstream analysts and investment banks. So this makes it difficult to get company information needed for assessing a stock’s potential.
- Canadian penny stocks are traded by small investors and prices can go high. It comes with lots of volatility and changes in prices.
- Penny stocks are not for those with low-risk tolerance. You have to be alert at any time to see what it has for you. The market is too risky.
- Holding on to your penny stock for too long can turn your supposed profit into a loss.
- The thin market can make it hard for you to find a buyer when you want to sell, so it has a low trading volume.
- Small companies you choose to invest in most times lack track records.
- Penny stocks have more losses than gains
- Brokers are wary and not regulated, so it makes traders be at owners’ risk when they make a loss.
- It is prone to scams and fraud
Is it Safe to Invest in Penny Stocks?
My answer to the question would be Yes and No.
My reasons to Yes are:
- If fraud is off the table, you can quickly make money within a short while by buying at a cheaper price and selling when prices go high
- As a new company, you can get the right fund or investments to boost your new company.
- There are chances to make quick money if you trade well and speculate better.
Then my reasons to No are:
- I consider penny stocks as a high-risk venture, with high chances of losing your investment.
- Trading often gets volatile and can rise or fall in value by a high percentage before you know it.
- Sometimes, your company may depend on a particular customer. If the customer leaves, it can lead to a drop in business.
- Penny stocks are very easy to manipulate by other investors because they are often small
- The division may arise leading some to be promoting stocks on social media, passing it off as an investment strategy and waiting for others to buy so they make a profit alone.
- You know that as the stock rises; the promoters get out before the stock drops and leave only newbies and other investors.
Where to Buy Best Penny Stocks in Canada
I recommend you buy penny stock from Questrade. I have invested and have come up with these reviews:
- Has a sign-up bonus
- Has a good average MER
- No accounting fee
- No minimum investment.
- The stock trading fee is between $4.95 to $9.95
- I found out that you can get $50 in free trades when you fund your account with a minimum of $1,000.
- You can trade your stock on the platform plus other bonds, options, EFTs, e.t.c
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.
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 reliable Canadian trading platforms.
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.
Penny Stocks Vs. Regular Stocks (Differences)
|PENNY STOCKS||REGULAR STOCKS|
|Penny stocks trade below $5 each||Regular stocks trade for $5 or more.|
|They trade on small exchanges.||Regular stocks trade on larger exchanges such as the TSX, NYSE, and Nasdaq.|
|Penny stocks may be said to have a higher volume. They are usually found among the top 10 most active stocks on the TSX on any given day.||They do not have higher volume. Penny stocks have higher volume than regular stocks.|
|The listing requirements vary and are not stricter than regular trade.||Other stocks on TSX-listed are stricter than listed on the TSX Venture Exchange.|
|They do not face more regulations||Companies listed on the NYSE and Nasdaq like other regular stocks face more regulation than they would if they traded on other exchanges.|
|No sec filings||Regular firms that trade on the OTCBB have to file financial statements with the Securities and Exchange Commission (SEC ).|
|I see penny stocks as volatile stocks||Not seen as volatile stock|
|Has a good opportunity to make large sums of money in a shorter time.||Operates normally, regulated and not a basis for quick money|
|There is a huge potential to lose a lot of money quickly because it is not regulated.||There is no huge potential to lose money quickly because it is regulated.|
|Traders on penny stocks most times may be in it for the short-term. Sometimes you will also find long-term investors.||Regular stocks traders are there for a long-term|
Penny Stocks Vs. Nano/Micro-Caps Stocks (Similarities).
|Penny stocks||Micro-caps stocks|
|Penny stocks trade below $5 each||Micro-cap is a stock with a market cap value between $50 million and $300 million.|
|They are risky||They have greater volatility, thus are inherently riskier than penny stocks|
|They lack analyst coverage||Micro-caps have limited liquidity, due to the lack of analyst coverage.|
|Employers and traders can hide information for investors, so they gain more.||There is limited information on micro caps stocks|
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.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.