Investors can still make money during this time of extraordinary market volatility due to COVID-19. However, it would be best if you weren’t taking undue risks by staking cash on penny stocks. Even the hottest penny stocks are risky investments.
Most of these companies don’t have the liquidity to endure a crisis. More so, you’ll be left holding the bag since typically penny stocks are hard to sell.
Look to invest in popular yet affordable stocks that can make you richer instead. Prime examples of such stocks are BlackBerry (TSX:BB)(NYSE:BB) and TORC Oil & Gas (TSX:TOG). Both are worth every penny you invest.
Next tech superstar
BlackBerry is the upcoming superstar in the technology space, given the growing popularity and increasing demand for intelligent security software. This $3.57 billion company and former smartphone maker is slowly regaining its lost glory through another avenue. As of this writing, the stock price is only $6.43 per share.
Major analysts don’t usually cover penny stocks. But for BlackBerry, analysts forecast the price to climb by 117.7% to $14 in the next 12 months. The growth potential is evident as a report by Frost & Sullivan, an independent research firm, reveals that BlackBerry solutions can address 96% of the enterprise threat landscape.
Companies and organizations, both private and public, need cybersecurity and endpoint management options. BlackBerry can tailor-fit their software and services to match a specific need. Customers can reduce costs and have data protection to help minimize risk.
Another growth area is in the automotive industry. Leading car brands are installing BlackBerry’s QNX technology in their next-generation vehicles. About 175 million vehicles are already equipped with the said software.
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CPP stock to consider
TORC is ideal for thrifty investors. Currently, the energy stock is trading at $1.70 per share. What makes this stock appealing is that it’s the largest stock holding of the Canada Pension Plan Investment Board (CPPIB) on the TSX. The pension fund manager owns 65,187 worth of TORC shares (as of March 31, 2020).
The CPPIB’s top holding is losing by 61.3% year to date. TORC has a high-quality asset base and a decent balance sheet. It was among the high dividend-payers in the energy sector until the plunge of oil prices.
However, the company had to stop paying dividends recently to preserve cash. Still, analysts covering TORC predict the price to appreciate by 223.5% to $5.50 in a year. Thus, a $5,000 investment today can potentially increase to $11,175.
The oil and gas industry is taking a big hit in 2020, while its contribution to federal and provincial revenues is declining. According to the Canada Energy Centre, the total contribution from 2000 to 2018 was $359 billion.
Canada’s oil sector will eventually recover, and companies like TORC should ramp up to seize market opportunities in the post-pandemic era.
Don’t gamble your money
Newbie retail investors are flocking the stock market during the pandemic to make a quick buck. Based on data from Investor Economics, there are more than half-a-million newly opened online brokerage accounts in Canada. But if you were to invest a few thousand dollars, steer clear of penny stocks or risk losing all.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry, BlackBerry, and Torc Oil And Gas Ltd.