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6 Canadian Penny Stocks That May Take off in October 2021

If you’re looking for some of the hottest Canadian penny stocks on the market today, you’ve come to the right place. We’ve got 6 of the best penny stocks…

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This article was originally published by Stock Trades

If you’re looking for some of the hottest Canadian penny stocks on the market today, you’ve come to the right place. We’ve got 6 of the best penny stocks to be looking at in 2021. Continue reading to find out what they are!

What is the definition of a penny stock?

The definition of a penny stock is quite broad. You’ll get varying answers from different investors, but the general consensus is that a penny stock is a stock that trades below $5.

However, it’s important to note that a lot of popular stocks, ones that don’t have the volatility or market capitalization of a penny stock trade below $5. So here is a few more guidelines to help you narrow down your search:

  • Penny stocks are typically smaller companies, and their shares are often illiquid (not easy to buy and sell)
  • They have a small following, and typically are not covered by major analysts
  • They usually trade OTC (over-the-counter, more on this later) or through pink sheets.

Canadians often confuse the term small-cap stock with penny stock. Unlike numerous small-cap stocks, you won’t find penny stocks trading on the TSX.

This is often because they are too small to meet the requirements needed to list on major exchanges, and don’t file the proper paperwork needed.

How do I buy penny stocks in Canada?

The first box you need to check off if you want to invest in penny stocks is the ability to handle significant volatility. If you don’t think you can stomach the risk, simply head to our how to buy stocks page to get started investing in the major exchanges.

What I like to tell investors looking to start trading the pink sheets, is to set aside an amount you would be completely comfortable losing. I wouldn’t recommend anyone invest their whole portfolio into penny stocks. But a designated amount, say 10% of your total portfolio, is completely reasonable.

Once you’ve allocated some capital towards what I like to call “fun investing”, you’ll need a brokerage account.

If you already have one, you’re ahead of the game. If not, feel free to check out our Questrade review. In my opinion, they are the best brokerage to start with if you’re looking to invest in penny stocks.

Take advantage of our exclusive offer for $50 in free trades with Questrade today.

Keep in mind, most brokerages charge more than their standard commission rates to buy penny stocks.

This is simply due to the fact that the stocks are traded over-the-counter, which is a little bit different than processing a transaction on a normal exchange.

Is it bad to invest in penny stocks?

If you’ve developed the proper strategy no, it isn’t bad to invest in penny stocks.

Where people go wrong, is investing money that they simply can’t afford to lose, and in the end it puts them in a very difficult position both emotionally and financially.

Penny stocks are, in the end, a gamble. We don’t have enough fundamental research to form any sort of concrete conclusion about the company’s future. So, our opinion is that you should be purchasing penny stocks with money you would be completely comfortable taking to a casino.

Why are penny stocks so cheap?

Penny stocks are often companies that do not meet the requirements or have the funding to list on major exchanges. As such, they typically have low market capitalizations and less stringent requirements.

One requirement to list on major exchanges is a higher share price. With penny stocks, there is no minimum and as such, stocks can trade extremely cheap, sometimes in fractions of a penny. The key to judging a size of a company is not its share price however, but it’s market cap. This is a very important concept.

Can you get rich off penny stocks?

It is possible to become rich investing in penny stocks yes. But, it’s very important you understand that for every success story, someone striking it rich and retiring early off a penny stock, there is a dozen, if not more, disasters of people risking way more than they were comfortable with and losing it all.

You are more likely to go broke than strike it rich with penny stocks. So, keep this in mind and invest solid, blue-chip stocks with the majority of your portfolio and spend expendable capital if you wish on Canadian penny stocks.

Can you buy penny stocks on Wealthsimple?

Unfortunately with a brokerage like Wealthsimple Trade, you won’t be able to buy Canadian Penny stocks. Why?

Well, when companies aren’t listed on a normal exchange like the NYSE,NASDAQ or TSX, they are traded via a broker-dealer network. Transactions take place via a bulletin board (the OTCBB) and Pink Sheet listing services.

These broker-dealer networks communicate with each other and act as market makers. They will locate shares available for purchase or sale, along with negotiate a price for a fee.

Although most of the stocks trading over-the-counter cannot make it on the major exchanges due to regulations, they still need to meet requirements to trade OTC.

It’s not only penny stocks that trade over-the-counter either. For example, companies may also issue bonds over-the-counter.

If you want to find a brokerage that will let you trade Canadian penny stocks, you’ll need to stick to one that deals with OTC transitions like Questrade.

Tips when buying penny stocks

Before you get started, I’m going to drop you a few quick pointers you will need to be successful with buying penny stocks here in Canada. This is by no means a complete list, however I feel they are some of the most, if not the most important things you need to know so you don’t lose your money.

  • When buying penny stocks, be aware that smaller sized entities may not be required to file documents with the Securities and Exchange Commission (SEC), something that bigger companies are required to do. This makes determining the financial health of a company nearly impossible, which is often why purchasing penny stocks is often thought of as nothing more than a gamble.
  • In order to reduce your risk, try investing in companies listed on the OTCQX or OTCQB exchanges. These are essentially the top and middle tiers in terms of penny stocks, and companies listed on these exchanges will more than likely have accurate financial information, and will file it in a timely manner.
  • If you’re looking for some of the highest returns, albeit highest risk, the OTC Pink is the lowest tier of penny stocks in terms of financial information provided. These stocks are the most volatile, so they bring with them highest potential profitability. Keep in mind though, the higher the reward, the higher the risk.
  • There are a ton of penny stocks out there, and I would highly suggest using a screener to identify and narrow down your potential list of suitable companies.
  • Knowledge in technical analysis is absolutely crucial when trading penny stocks. Because limited or inaccurate financial information is available to most investors, fundamental analysis almost plays no part in picking stocks.
  • Analyze the management team. More than anything, they will be responsible for the inevitable failure or success of the company. With startups in particular, there will be a lot of key decisions made by the management team that can make or break an over-the-counter company.

FP Newspapers (TSXV:FP)

Speaking of terrible liquidity, you’ll want to be careful trading Canadian penny stock FP Newspapers (TSXV:FP) shares. This $0.63 stock sometimes goes a whole day without trading and has average daily trading volume of just a few thousand shares.

I’m the first to admit a company that owns 49% of the distributable cash of several newspapers in Manitoba – most notably The Winnipeg Free Press – doesn’t sound like a very exciting penny stock opportunity in 2021. But this stock is insanely cheap, and it seems to be turning a corner.

It earned approximately $0.32 per share in 2020, while shares trade for less than 2x that much. It’ll get a nice journalism tax break from the Canadian government in 2021, too.

It also could sell its headquarters in Winnipeg for a nice gain as well. Shares could see another boost when an important loan gets extended.

The stock could also pay a substantial dividend in a year or two once it starts to earn a little more money and it gets its balance sheet more under control. If this happens, you’ll be very happy you got in today.

Kodiak Copper (TSXV:KDK)

Kodiak Copper Stock

 

Kodiak Copper (TSXV:KDK) is a newer player on this list of top Canadian penny stocks primarily because of the rising price of copper.

If you haven’t been paying attention, the price of copper has launched over the last year, going from lows of $2.10 in 2020 to touching highs of $3.70 just recently in 2021. Obviously, with this company being essentially a copper pure-play, it stands to benefit from this increase in price.

In fact, in September of 2020, resource giant Teck Resources invested $8 million into Kodiak Copper, representing a 9.9% stake in the company, and showing strong signs of confidence and outlook for the junior exploration company moving forward.

The company generates no revenue and is largely a play on its exploration efforts and asset base which is located in British Columbia, Arizona and Nunavut.

The company actually recently went through a transition, as it changed its name from Dunnedin Ventures to Kodiak Copper at the start of 2020, and is probably one of the higher risk plays on this list. However, there’s always large potential in exploration companies in the very early stages. Just be wise, and invest with expendable capital.

Namesilo Technologies (CSE:URL)

Top Canadian Penny stocks - Namesilo

 

Namesilo Technologies (CSE:URL) is an internet services company in Canada that registers domain names, provides hosting, offers email services, and provides various other needs for the owners of websites.

In 2021, having your own website is imperative. Customers don’t bother picking up the phone if they have a question or concern; they’re just going to go straight to your website. If you don’t have a digital advertising strategy, good luck.

Namesilo is delivering blistering growth of late, more than doubling its top line on a year-over-year basis in 2019. Net income before taxes, meanwhile, grew more than 1,000% compared to the same period last year. Profit margins expanded as well, and the company reported strong customer retention rates.

The question is whether Namesilo can continue its blistering growth. It should benefit from new businesses (and individuals) becoming serious about building an online presence, as well as taking customers from competitors. Its focus on giving great deals and providing excellent service is a winning combination.

And at just $0.25 per share, Namesilo certainly qualifies as a penny stock. The stock only has a market cap of just under $23 million, so big-time investors might struggle with its lack of liquidity.

Fobi AI (Formerly Loop Insights) (TSXV:MTRX)

Loop Insights Logo

 

Fobi AI (TSXV:MTRX) has surged in value recently, but prior to this the company had a market cap of just over $40 million. It now sits at just under $190 million, but I’d still firmly place this company in penny stock territory.

Fobi AI, which recently changed its name from Loop Insights, provides retail and marketing solutions for digital and physical landscapes. They’re primarily situated in the AI sector, and the company’s primary function is to enable brick and mortar companies to analyze critical customer data, including customer spending habits and trends.

The company works in the casino, sports, hospitality, retail and education sectors and has signed multiple critical contracts with some major players here in Canada, including Telus, Amazon and Shopify. Although the company does not generate any revenue at the time of writing, this is still a company you’ll want to keep a close eye on moving forward.

As of right now, it’s very difficult to value this company considering it has no form of revenue generation or any sort of earnings. And because of this, we can expect the company to be, like many Canadian penny stocks, extremely volatile around earnings time and on news releases. There is a lot of speculation and forward earnings priced in to Loop’s price right now, so we’d stress extreme caution if you’re considering taking a position.

Athabasca Oil (TSX:ATH)

Canadian Penny Stocks - Athabasca Oil

Athabasca Oil (TSX:ATH) is a classic penny stock conundrum. It has huge upside potential, but there’s also a real possibility the company could go bankrupt. It’s almost like flipping a coin, except if you win, you’ll likely do far better than just doubling your money.

The company has light oil production in both the Motney and Duvernay fields in Alberta Canada, as well as heavy oil production near Fort McMurray. The heavy oil assets have a long reserve life, but the company isn’t making much from any of its production because of low oil prices.

Athabasca projects it’ll start earning free cash flow in the next couple of years, but in the meantime, it’s forced to spend approximately $125 million each year on sustaining capital. It has cash on the balance sheet, but it must also contend with refinancing some US$450 million worth of debt coming due in 2022.

You could make a lot of money if oil recovers and Athabasca Oil shares shoot higher. But this $0.22 stock is cheap for a reason. You’re taking some significant risk buying today, especially with the demand in oil plummeting due to COVID-19.

However, a quick recovery in the industry could lead to a quick recovery in this stocks share price as well. Prior to COVID-19, Athabasca’s share price sat in the low $0.50 range.

Redishred (TSXV:KUT)

Top Canadian Penny Stocks - Redishred

One of our favorite Canadian penny stocks is Redishred Capital (TSXV:KUT), which owns and operates the Proshred brand.

Proshred has two separate business models – it both owns mobile paper shredding trucks and it franchises out locations to interested franchisees. The company has either corporate or franchised operations in 40 different U.S. cities.

The mobile paper shredding model has a few interesting advantages. It allows Redishred to easily acquire competitors and then rebrand them. It’s more secure – and convenient — than bringing documents to a central location. And the multi-city business model allows brand recognition in an industry that’s currently very fragmented.

It’s well poised to keep growing, thanks to its clean balance sheet with almost zero debt. Top managers are major shareholders with an ownership stake of more than 40% of the company.

And unlike many penny stocks, this company generates plenty of cash flow. Remember, this company has a share price of $0.61 and a market cap of just over $48 million. It doesn’t take much to really move the bottom line.

Redishred is one of our top penny stock picks in Canada because it’s in a good business with great growth potential. It’s the kind of stock you’ll want to stick in your portfolio and own for a very long time.

However as with any other penny stock, you’ll want to keep a close eye on it incase anything materially changes.












Author: Dan Kent

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Energy & Critical Metals

Hastings could be next in line to produce rare earths in Australia with plant approval in Onslow

Rare earths player Hastings Technology Metals (ASX:HAS) has just secured environmental approval for construction of the downstream processing plant at…

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Rare earths player Hastings Technology Metals (ASX:HAS) has just secured environmental approval for construction of the downstream processing plant at its Yangibana rare earths project in Onslow in WA.

It’s a solid step on the path to production, with the plant set to perform hydrometallurgical processing of rare earths oxide concentrate from Yangibana into mixed rare earth carbonate (MREC) containing high levels of neodymium and praseodymium concentrate (NdPr).

NdPr are vital components used to manufacture permanent magnets that are required in advanced technology products ranging from electric vehicles to wind turbines, robotics, medical applications and digital devices.

And Yangibana contains one of the most highly valued NdPr deposits in the world, with NdPr:TREO ratios of up to 52%.

Australia’s next rare earths producer?

The Department of Agriculture, Water and the Environment (DAWE) approval follows DevelopmentWA Board sign-off last month for the company to enter discussions for an option to lease Ashburton North Strategic Industrial Area (ANSIA) Lot 600.

“This is a significant milestone for our Yangibana Rare Earths Project and further endorses Hastings’ decision last year to decouple the processing plant from the Yangibana mine site,” executive chairman Charles Lew said.

“The Commonwealth environmental approval will allow Hastings to construct the Onslow Rare Earths Plant for a full production rate of 15,000 tonnes of MREC per annum, unlocking the high-quality and NdPr-rich rare earths carbonate that we will produce at Yangibana.”

“Importantly, the Commonwealth approval is another positive step in Hastings’ journey to become Australia’s next rare earth producer.”

“Debt financing talks are advancing well and scheduled for conclusion before the end of this year and early stage civil works at the Yangibana mine site are in progress.”

Pic: Location of ANSIA highlighting the site chosen for the Onslow rare earths plant.

Plant construction kicks off in 2022

The company says that building the plant at ANSIA – which is around 15kms south-west of Onslow – is key to its downstream processing program because it offers access to piped natural gas, a plentiful supply of water and grid power.

Plus, the ANSIA location reduced the volumes of consumables and reagents needed to be transported to the Yangibana mine site by up to 80%.

Construction of the plant is due to begin in 2022, after the completion of early works at Yangibana mine site – and in line with Hastings’ target to produce its first MREC in early 2024.

The post Hastings could be next in line to produce rare earths in Australia with plant approval in Onslow appeared first on Stockhead.




Author: Emma Davies

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Peppermint delivers key milestones in the last quarter, including the launch of micro-loan platform bizmoPay

Special Report: Peppermint has had another significant quarter, delivering on all key metrics which was highlighted by the launching of … Read More
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Peppermint has had another significant quarter, delivering on all key metrics which was highlighted by the launching of bizmoPay.

Fintech company Peppermint Innovation (ASX:PIL) has had a very productive quarter, with the highlight being the delivery of its alternative non-bank micro-enterprise loan offering, bizmoPay.

In July, the company achieved a significant milestone after being awarded a financial lending licence for bizmoPay by the Philippines Securities Exchange Commission (SEC).

Following that approval, PIL immediately commenced a three-month pilot program for a select number of bizmoto agents to test out the bizmoPay platform.

The aim was to identify and optimise any friction points or blockages to ensure efficient  system operations before it started offering the loan program to more than 56,000 registered bizmoto agents.

The pilot program has rapidly expanded in the last two weeks of September to more than 150 bizmoto agents.

“Having initiated a select 10-agent pilot program to identify friction points in our bizmoPay system, we rapidly expanded the size of the pilot due to the level of interest shown by other bizmoto agents,” commented Peppermint CEO, Chris Kain.

Kain said the pilot program was so in demand that by October 12, PIL had issued 359 loans across its three different loan products – Platinum Plus, Platinum and Silver.

During the quarter, PIL also recorded cash receipts of $472,000, which was an 83% increase on the previous quarter.

The company is well funded, with a strong cash position in the bank of $2.7m at quarter end.

 

BizmoPay

The granting of a financial lending licence by the Philippines SEC allows bizmoPay to offer alternative non-bank micro-enterprise loans to qualified bizmoto agents, registered bizmoto network members, and enterprise platform partners.

bizmoPay services fully complement the commercialisation of Peppermint’s proprietary technology platform which targets four key business sectors – mobile payments, ecommerce, delivery and logistics and mobile financial services.

Based on data analysis from the first 45 days of the bizmoPay pilot program, loan recipients on average increased their transactional volume by approximately eight times across the bizmoto ecosystem of services.

“We’re starting to get a picture of an overall positive impact on the agents’ ability to conduct transactions across the platform, which is exactly what we wanted to do,” Kain told Stockhead.

And of course, the more transactions across the platform, the greater revenue that the company earns.

The bizmoPay pilot program started with only the Platinum Plus and Platinum loan products, with the shorter term and lower value Silver bizmoPay loan product commencing trials in the last week of September.

As such, no meaningful data were able to be collected for the Silver bizmoPay loan type.

The program yielded significantly different results in terms of transactional volumes and values across the first 45 days.

On average across the board, the total number of bizmoPay loan recipients completed 13 transactions during the first 45 days of the bizmoPay pilot program, and processed $1.05 per day in transactional value.

“That volume of transactions would represent an additional $22 million per annum in revenue if extrapolated across our 56,000 registered bizmoto agents,” said Kain.

“We’re also on schedule to deploy the next phase of our commercial roll-out for bizmoPay next month, whereby recipients will be able to apply for their micro-enterprise loans via their mobile app.”

Several agents significantly outperformed the average transactional volume during the first 45-day pilot period, including 20 agents who performed more than 50 transactions.

At the higher end, five agents completed more than 100 transactions, while one agent undertook more than 250 transactions.

Peppermint expects to expand bizmoPay’s agents to more than 56,000 users when the pilot is completed, with a target of $30m in micro loans over the next three years.

The graph below is an extrapolation of what the different average performance of each loan type would yield if applied across selected numbers of the registered bizmoto agent base over the same initial 45 day period of the bizmoPay pilot program:

Kain expects this simple and easy to use feature will be incredibly popular with many of its bizmoto agents.

The non-bank lending space in the Philippines is currently undergoing massive changes, especially in the mobile app space where users have exploded as more people access non-bank loan finance through their mobiles.

To capitalise on this momentum, Kain said the next level of regulatory licensing that Peppermint would be chasing is an Electronic Money Issuer (EMI) licence.

With an EMI  licence in place, he believes that Peppermint could turbocharge its capabilities in the digital transaction space.

“An EMI licence will allow us to facilitate any e-money transaction and service open-loop e-wallet accounts, providing all Filipinos – not just bizmoto agents – with a convenient and secure way to receive digital money and access digital services,” Kain said.

“Every Filipino will have the chance to receive a bizmoPay loan, paid to their bizmoto e-wallet to access the bizmoto ecosystem and agent services. We believe this will stimulate significant transaction volumes over the bizmoto platform.”

In February, the company told the market that its phase 2 objective was the launch of bizmoPay.

“We’ve done that and ticked that box, so now we’re moving to phase 3, an EMI licence which is Peppermint’s next objective in delivering financial inclusion to the Filipino people.”

 

Other significant milestones

In March, PIL signed an API agreement with the Bank of the Philippine Islands, which saw PIL’s proprietary bizmoto platform integrated into the bank’s operating systems.

The integration will begin during Q4 2021, with the product expected to go live later in 2021 or early 2022.

PIL’s strategic Merchant Biller Agreement  with Cebuana Lhuillier back in April allowed its bizmoto agents to cash in money and top up their mobile wallets at any of the 2,500 Cebuana shop fronts across the country.

The API that serves as the gateway for Cebuana Lhuillier to send funds has now been developed, with a projected go-live date later this year or early Q1 2022.

Integration of the bizmoto platform with GCash as a payments facilitator is also underway, and expected to be launched in December.

Once the GCash offer is live, bizmoto agents, riders and merchants will have exposure to approximately 46 million registered GCash users throughout the Philippines.

PIL’s bizmoTinda website meanwhile, has been improved to include multi-vendor customer and multi-vendor merchant functionality, allowing  users to register as multiple vendors or multiple merchants.

The bizmoTinda allows users to sell their own items, with the convenience of having their own website.

Other milestones during the quarter include launching a blog newsroom with the aim of providing non-ASX sensitive information and news updates about the company’s activities to shareholders.

PIL also executed a direct marketing campaign around bizmoPay during the quarter, introducing the concept of a “Planet bizmoto” community among its agents.

The primary objectives of the “Planet bizmoto” community are to experience unique value, be loyal to the brand and transact frequently within the bizmoto ecosystem.

This article was developed in collaboration with Peppermint, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Peppermint delivers key milestones in the last quarter, including the launch of micro-loan platform bizmoPay appeared first on Stockhead.



Author: Special Report

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Lefroy Exploration secures major nickel frontier land package in WA

Special report: In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications ……

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In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications over a new nickel project named Glenayle.

The Glenayle Project covers a massive contiguous 2735sqkm of the Proterozoic age Salvation Basin that is intruded by multiple dolerite sills which extend over the entire land package.

These dolerite sills are part of the Warakurna Large Igneous Province (LIP), which extends west to the Bangemall Basin and east to include the Giles layered intrusive complex. More importantly, they are considered prospective for nickel mineralisation.

Glenayle represents a first mover approach by Lefroy (ASX:LEX) into a frontier nickel-copper exploration project with its stake over the Warakurna LIP.

New wholly owned subsidiary to list on ASX in 2022

The Glenayle tenement package is held by a new wholly owned LEX subsidiary, Johnston Lakes Nickel (JLN), which Lefroy aims to list on the ASX in 2022 subject to shareholder and regulatory approvals.

JLN will also hold other nickel assets currently held by LEX at Lake Johnston and at Carnilya South in the Lefroy Gold Project.

The company expects the tenements to be granted in Q4, 2022.

While the explorer aims to expand its portfolio in search for nickel, the focus remains on exploration at Eastern Lefroy and the Burns gold-copper prospect.

A rare opportunity

LEX managing director Wade Johnson said it is not often that an opportunity like this presents itself.

“It is a monster land package,” he said.

“We have taken the first mover approach into a new area that has seen very little exploration.

“We are very keen to further develop and apply knowledge learned about nickel mineralisation in large igneous provinces that will provide exploration targeting criteria for target selection,” he said.

“Glenayle adds another wholly owned project to the LEX greenfields exploration portfolio and complements our other nickel assets at Lake Johnston and Carnilya South.”

The Glenayle project relative to the other company projects and key geological rock units in Western Australia. Pic: Supplied

Identified in desktop assessment

The Glenayle nickel project was identified after a desktop assessment to identify new areas in Western Australia considered prospective for nickel mineralisation.

Prior geological knowledge of the area from a field reconnaissance trip in 1998 by Wade Johnson and the subsequent review of the research paper by Pirajno and Hoatson (2012) supported LEX’s acquisition.

What’s next?

Lefroy has kicked off compilation and assessment of previous surface geochemistry, geophysical and drilling data from WAMEX at Glenayle.

The location of drill core from the only three diamond holes drilled at Glenayle is being sourced, with two of the three holes being located.

Geophysics, and in particular interpretation of gravity survey data, will play a key role in guiding exploration targeting within the project.

Development of a detailed aeromagnetic and gravity dataset is underway and will be the primary exploration tool in the interpretation of the distribution of the mafic rocks such as feeder sills, layered intrusions and dykes within the Salvation Basin.

This will then be followed by targeted stratigraphic diamond drilling in 2023.

The company will apply for funding support through the WA State Governments Exploration Incentive Scheme (EIS) for this drilling where applicable.

LEX has also commenced land access negotiations with the determined Native Title group.

 


 

 

This article was developed in collaboration with Lefroy Exploration, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Lefroy Exploration secures major nickel frontier land package in WA appeared first on Stockhead.





Author: Special Report

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