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Should you buy these 3 popular penny stocks?

As the name implies, penny stocks are shares that have share prices below one dollar.

Generally they are among the more volatile shares on the share market and largely unsuitable for the majority of investors.

Three penny stocks which are gathering a lot of attention at the moment are listed below. Whilst I don’t think they are all investable right now, they could be worth keeping an eye on. Here’s why:

Bubs Australia Ltd (ASX: BUB)

Thanks to supply agreements with Brilite Nutritionals and NetEase Kaola.com, I believe this infant formula and baby food company has positioned itself perfectly to challenge a2 Milk Company Ltd (Australia) (ASX: A2M) in the lucrative China market. However, with so much future growth already built into its share price, I would suggest investors wait for a better entry point. Somewhere around the 42 cents mark would be a good price in my opinion. Though it is a high risk investment given its lack of sales to date.

Digitalx Ltd (ASX: DCC)

This blockchain technology company’s shares have gone gangbusters in the last month and risen a massive 70%. DigitalX provides a range of services including initial coin offerings, Bitcoin trading, and Bitcoin mining. It recently announced a joint venture agreement with Stargroup Ltd (ASX: STL) to develop two-way Bitcoin ATMs. At present there are less than 20 ATMs in Australia that can facilitate a Bitcoin transaction and conversion fees are in the range of 4% to 8% of the transaction value. DigitalX and Stargroup believe that a wide-scale rollout provides a potentially lucrative commercial opportunity.

Primary Opinion Ltd (ASX: POP)

Primary Opinion has a 42% ownership of celebrity chef Maggie Beer’s product range. In August former Bellamy’s Australia Ltd (ASX: BAL) CEO Laura McBain joined the company as its managing director with the aim of growing sales of the range internationally. Whilst McBain does have a track record of developing small brands into international success stories, only time will tell whether the Maggie Beer brand will appeal to an international audience.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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