When it comes to very undervalued penny stocks to buy in May, investors have many choices. Run a stock screener, and you’ll find hundreds of stocks, whether on major U.S. exchanges, or in the over-the-counter (OTC) market, that trade at either a low earnings multiple, or a discount to tangible book value.However, there are a few that stand out as strong buys. With some of the stocks in this category, this is due to them having company-specific catalysts in play that could help bridge the gap between trading price and underlying value within a reasonable time frame.
In other situations, there may not be a strong company-specific catalyst per se, but their valuations, coupled with other strengths such as earnings consistency, give them the potential to appreciate in price, as the overall market becomes more aware of them.So, what are some of the very undervalued penny stocks to buy in May? These seven fit the bill. Each one trades at low earnings multiple and/or at a meaningful discount to tangible book value.
BUKS | Butler National | $0.71 |
CHCI | Comstock Holding | $4.79 |
HRBR | Harbor Diversified | $2.25 |
JRSH | Jerash Holdings | $4.42 |
PBI | Pitney Bowes | $3.08 |
SACH | Sachem Capital | $3.32 |
WFSTF | Western Forest Products | $0.79 |
Butler National (BUKS)
Source: John Brueske / Shutterstock
Butler National (OTCMKTS:BUKS) is one of the best undervalued penny stock opportunities in May. Yes, it has been quite some time since shares in this aerospace and casino gaming firm experienced a big jump in price.
As I have discussed previously, BUKS stock has soared since the late 2010s, but over the past year has delivered middling returns. However, with shares trading for less than 8 times earnings, a big discount to peers in both aerospace and gaming, it is clear there is plenty of value that could be unlocked.
Admittedly, based on commentary from CEO Clark Stewart on a July 2022 earnings conference call, Butler doesn’t appear ready to spin off/sell one of its divisions. Still, while management’s 25.1% ownership of the company may limit shareholder activism, one or several of Butler’s outside investors could ultimately push the C-suite to seriously pursue strategic alternatives.
Comstock (CHCI)
Source: Billion Photos / Shutterstock.com
Trading for just 4.9 times earnings, it’s easy to see why I consider Comstock (NASDAQ:CHCI) one of the very undervalued penny stocks to buy in May. Very few stocks trade at such a low earnings multiple.Yet given this property management firm’s big exposure to commercial real estate, it also is easy to see why the market has yet to price shares at a higher multiple. However, while this factor may keep CHCI stock depressed in the near term, this may mean big upside potential over a longer time frame.
In the past year, the company has increased occupancy at its existing managed propertiesand has continued to expand its property management portfolio. This could pave the way for further earnings growth. Coupled with a rebound in sentiment for real estate stocks, this may produce a big move higher for CHCI shares down the road.
Harbor Diversified (HRBR)
Source: Shutterstock
Despite the name, Harbor Diversified (OTCMKTS:HRBR) owns just one business: regional airline Air Wisconsin. At this stage of the economic cycle, you may think now is not the right time to buy shares in such a business.
But while HRBR stock has all the risks inherent with airline stocks, there is something that more than makes up for it. That would be HRBR’s very large discount compared to its underlying value. As a Seeking Alpha commentator argued last month, Harbor Diversified has a book value of $3.75 per share. Shares today change hands for $2.25 per share.
The stock also trades at a single-digit P/E ratio. More importantly, as the commentator argued, there is big potential earnings upside with Air Wisconsin’s new contract to operate regional routes for American Airlines (NASDAQ:AAL). A potential windfall from a lawsuit against its former airline partner is another catalyst.
Jerash (JRSH)
Source: Shutterstock
In December, I recommended Jerash (NASDAQ:JRSH) as one of the best penny stocks to buy for 2023. While up by around 12.5% year-to-date, I’ll admit that shares in the apparel maker have yet to have a true liftoff moment. However, that doesn’t mean such an event will not play out in the coming year.
The economic slowdown has had a big impact on Jerash’s profitability since the end of the fiscal year ending March 31, 2022. During this time, earnings per share (or EPS) have dropped by nearly 50%, from 67 cents to 34 cents. Still, as I argued back in Dec., an earnings comeback could arrive pretty soon.Although revising them lower in recent months, sell-side earnings forecasts continue to call for a big jump in EPS during this fiscal year and the next. This could in turn spur a move back to multi-year highs for JRSH stock.
Pitney Bowes (PBI)
Source: Shutterstock
Last fall, shareholder activism became a potential catalyst for Pitney Bowes (NYSE:PBI). This initially sparked a big rally for shares in the business products company. PBI zoomed from around $2.40 per share in early October, to prices nearing $5 per share in January.
Unfortunately, investors who bought PBI stock when excitement about Hestia Capital Management’s launch of a proxy fight peaked last winter are now deep underwater on their positions in this deep-value stock, as it changes hands for around $3 per share. Even as the hedge fund has prevailed, winning four out of nine board seats, shares have continued to slide lower.Yet whether you bought ahead of Hestia’s victory, or after it, a position in PBI could prove very profitable. Hestia believes that its multi-step transformation plan for Pitney Bowes could unlock $11.34 to $16.33 per share in value out of the company.
Sachem Capital (SACH)
Source: Shutterstock
Sachem Capital (NYSEAMERICAN:SACH) appears to be anything but one of the undervalued penny stock winners in May. Shares in this mortgage real estate investment trust have performed poorly as of late.
It’s no shock that SACH stock is struggling right now. Interest rates keep rising, real estate still appears vulnerable, and Sachem on the surface appears riskier than other mortgage REITs, due to its focus on short-term “hard money” real estate loans. Yet keep in mind SACH’s single-digit P/E ratio, its 37% discount to book value, and its 15.6% forward dividend yield.
Hard times have arguably more than accounted for in the valuation of this hard money lender. If/when interest rates begin to come lower, or when sector sentiment for real estate improves, SACH could bounce back in a big way. This makes it one of the best undervalued penny stocks to buy in May.
Western Forest Products (WFSTF)
Source: Shutterstock
As you may be able to infer from its corporate name, Western Forest Products (OTCMKTS:WFSTF) is in the timber business. This Canada-based company turns the wood from its timberlands in British Columbia into wood products for construction and industrial end-use.
With revenue and earnings dropping after post-pandemic boom times for the industry, WFSTF stock has in turn fallen back over the past year, to the tune of 46.2%. However, following this big drop in price since May 2022, it has become one of the best undervalued stock opportunities in May 2023.
Mostly, because the stock trades at a 45% discount to book value. There may be a way for Western Forest Products to get back to prices above its book value. As InvestorPlace’s Muslim Farooque argued last month, a rebound in construction, together with continued demand for housing, could spark a growth resurgence for WFSTF.
On Penny Stocks and Low-Volume Stocks:With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand thatInvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:Penny Stocks — How to Profit Without Getting Scammed
Onthe date of publication, Thomas Niel held a long position in HRBR. He did not hold (either directly or indirectly) any positions in the other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
Penny Stocks
FAQs
7 Very Undervalued Penny Stocks to Buy in May 2023? ›
Do penny stocks ever "go big"? Penny stocks can certainly "go big," but the problem is these parabolic moves are usually short-lived. Penny stocks frequently double or triple in price in short periods, but these companies usually have a very bleak 5-year chart.
What penny stocks to buy in 2023? ›- Geron.
- ARC.
- Ubiquitech Software.
- Rover.
- Planet.
- Beachbody.
- Canaan.
- Mullen Automotive.
Company Name | LTP | % Change |
---|---|---|
Ortel Communications Ltd | 1.15 | 4.55 |
DCM Financial Services Ltd | 4.65 | 4.49 |
Birla Tyres Ltd | 4.7 | 4.44 |
Dhanuka Realty Ltd | 9.45 | 4.42 |
- BBBYQ0.300.05% Bed Bath & Beyond Inc.
- MULN0.950.15% Mullen Automotive, Inc.
- QBTS1.250.15% D-Wave Quantum Inc.
- NA2.370.97% Nano Labs Ltd.
- BMR4.962.76% Beamr Imaging Ltd.
- HCMC0.000.00% Healthier Choices Management Corp.
- APRU0.000.00% Apple Rush Company, Inc.
- AITX0.010.00%
Name | Current Market Price (CMP) | Year's Range |
---|---|---|
Virgo Global | INR 8.26 | INR 0.64 - INR 13.53 |
BAMPSL Securities | INR 9 | INR 4.10 - INR 10.50 |
Rajnish Wellness | INR 15.80 | INR 5.75 - INR 25.79 |
J Taparia Projects | INR 8.78 | INR 2.64 - INR 8.83 |
Company | Forward Sales Growth Next Year |
---|---|
Alphabet (GOOG, GOOGL) | +11.8% |
Eli Lilly (LLY) | +19.4% |
Match (MTCH) | +13.0% |
Progressive (PGR) | +10.9% |
RAMP | LiveRamp | $24.68 |
---|---|---|
KYMR | Kymera Therapeutics | $28.35 |
SDGR | Schrodinger | $26.10 |
HSAI | Hesai Group | $8.10 |
ABCL | AbCellera Biologics | $5.74 |
Symbol | Company Name | Price |
---|---|---|
WETG | WeTrade Group Inc. | 0.059 |
MINM | Minim Inc | 4.59 |
SVFD | Save Foods Inc. | 1.2 |
TLRY | Tilray Brands Inc. | 2.77 |
HMENF | Hemisphere Energy | $0.91 |
---|---|---|
PFHO | Pacific Health Care | $0.92 |
POSAF | POSaBIT Systems | $0.67 |
VASO | Vaso Corp. | $0.24 |
XTMIF | XTM. Inc. | $0.12 |
Company | Face Value (In INR) | 52-week Low (In INR) |
---|---|---|
Medico Remedies Ltd | 2 | 16.52 |
Titagarh Wagons Ltd | 2 | 93.40 |
De Nora India | 10 | 460.20 |
Olectra Greentech | 4 | 374.10 |
Do any penny stocks ever go big? ›
Do penny stocks ever "go big"? Penny stocks can certainly "go big," but the problem is these parabolic moves are usually short-lived. Penny stocks frequently double or triple in price in short periods, but these companies usually have a very bleak 5-year chart.
How do you find booming penny stocks? ›You can find penny stocks on the regular stock exchanges and the OTC Markets. Find securities that interest you, then review their basic data. How long has the company been active?
How do I find good penny stocks? ›- Research the Company. An informed trader is a smart trader. ...
- Look for Volatility. ...
- Look for Volume. ...
- Look for Catalysts. ...
- Listen to What Others Are Saying. ...
- Get More Knowledge About Penny Stock Patterns. ...
- Consider the Time of Day. ...
- Pay Close Attention to Debt.
Symbol | Name | Price (Intraday) |
---|---|---|
AMZN | Amazon.com, Inc. | 116.75 |
NVDA | NVIDIA Corporation | 305.38 |
BAC | Bank of America Corporation | 28.10 |
AAPL | Apple Inc. | 171.84 |
Stock | YTD Total Returns Through May 17 |
---|---|
Walt Disney Co. (DIS) | 6.8% |
PayPal Holdings Inc. (PYPL) | -13.7% |
EOG Resources Inc. (EOG) | -12.5% |
Grupo Aeroportuario del Sureste SAB de CV (ASR) | 25.8% |
- Accenture (NYSE:ACN)
- Adobe (NASDAQ:ADBE)
- Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL)
- Amazon.
- Broadcom (NASDAQ:AVGO)
- Danaher (NYSE:DHR)
- S&P Global (NYSE:SPGI)
- Salesforce (NYSE:CRM)
- Energy. Information. technology. Health care. Utilities.
- Real estate. Materials. Industrials. Communication. services.
- Consumer. staples. Consumer. discretionary. Financials.
S.No. | Long Term Stocks India | Industry |
---|---|---|
1. | Reliance Industries | Multinational Conglomerate |
2. | Tata Consultancy Services (TCS) | Information Technology |
3. | Infosys | Information Technology |
4. | HDFC Bank | Banking |
Wall Street Analysts expect low-priced stocks PaySign, Inc. (PAYS), Sorrento Therapeutics, Inc. (SRNE), and National CineMedia, Inc. (NCMI) to more than double in the next 12 months.
What is the cheapest penny stock to buy? ›- Gerdau S.A. (NYSE:GGB)
- Lufax Holding Ltd (NYSE:LU)
- Olaplex Holdings, Inc. (NASDAQ:OLPX)
- Nokia Oyj (NYSE:NOK)
- Banco Santander, S.A. (NYSE:SAN)
- Itaú Unibanco Holding S.A. (NYSE:ITUB)
- Ferroglobe PLC (NASDAQ:GSM)
Which is the cheapest share to buy? ›
- Yes Bank. Banking.
- Vodafone Idea. Telecommunication.
- UCO Bank. Banking.
- Bank of Maharashtra. Banking.
- U.S. Bancorp USB.
- Taiwan Semiconductor Manufacturing TSM.
- GSK PLC GSK.
- Wells Fargo WFC.
- Roche Holding RHHBY.
- Comcast CMCSA.
- International Flavors & Fragrances IFF.
- Anheuser-Busch InBev BUD.
Price-To-Earnings (PE) Ratios
Keeping an eye on the company's price-to-earnings ratio is important to identify multibaggers. A good indicator of a multibagger stock is when the PE is growing faster than the price of stocks.
"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.
What is the most a stock has gained in one day? ›Winner: Amazon. One day after Meta's staggering loss, another tech giant set a new record for single-day gains. On January 4, 2022, Amazon (AMZN)'s market capitalization rose by $190 billion in a single day, beating out Apple's record of $179 billion a week earlier.
How high can penny stocks get? ›Just like mid and large cap stocks, there is no limit to how high a penny stock can go. Many massive, well-established companies were once trading for less than $5 per share.
Why avoid penny stocks? ›Potential risks of penny stocks
Lack of liquidity: Penny stocks are often illiquid, meaning it can be difficult to sell your shares quickly without impacting the price. Unprofitable: Many penny stocks represent a stake in a company that has not and will not generate earnings for its shareholders.
You can verify this by looking at the stock in social media to see what people are writing about. If you see elevated social media activity, then this is a sign of a pump and dump scheme.
How do you pump and dump penny stocks? ›A pump-and-dump scheme usually goes like this: a group of insiders plans to buy a particular stock, like a penny stock, which are riskier types of equities. The insiders then spread false or misleading information about the company to increase the demand for the stock and drive up the price.
Who is the best broker to buy penny stocks from? ›- Best online brokers for penny stocks.
- Interactive Brokers.
- E-Trade.
- TD Ameritrade.
- Fidelity.
- Charles Schwab.
- Merrill Edge.
- Ally Invest.
How long do you have to hold penny stocks? ›
Experts Might Hold The Stock For 6 Minutes Or Up To 6 Months: If you are a day trader, you may be buying and selling stocks at an average of every five or 10 minutes. But, investors who are looking for long-term plays and do not want to trade much off momentum, might hold penny stocks for as long as six months.
What are good penny stocks to invest in on Robinhood? ›- (NASDAQ: NNOX) — Nano-X Imaging — The JNJ Stake Penny Stock.
- (NASDAQ: SBFM) — Sunshine Biopharma Inc. ...
- (NASDAQ: IMGN) — ImmunoGen, Inc. ...
- (NASDAQ: PACW) — PacWest Bancorp — The Volatile Banking Crisis Penny Stock.
- (NASDAQ: GFAI) — Guardforce AI Co., Ltd.
In addition to Amgen, Inc. (NASDAQ:AMGN), other Fast Money stocks that are widely held by elite hedge funds include Tesla, Inc. (NASDAQ:TSLA), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT).
Which stock is the most stable? ›- McDonald's Corporation (NYSE:MCD) Number of Hedge Fund Holders: 57. ...
- The Coca-Cola Company (NYSE:KO) Number of Hedge Fund Holders: 58. ...
- NextEra Energy, Inc. (NYSE:NEE) ...
- Walmart Inc. (NYSE:WMT) ...
- Costco Wholesale Corporation (NASDAQ:COST) Number of Hedge Fund Holders: 66.
S.No. | Name | CMP Rs. |
---|---|---|
1. | Varanium Cloud | 176.15 |
2. | Nirman Agri | 82.95 |
3. | Press. Senstive | 12.14 |
4. | BCL Enterprises | 1.24 |
Investing in U.S. exporters, tangible assets (foreigners who buy U.S. real estate or commodities), and appreciating currencies or stock markets provide the basis for profiting from the falling U.S. dollar.
What investments do well with a weak dollar? ›- U.S. companies generating international sales.
- Commodities.
- Gold.
- Cryptocurrencies.
- Emerging markets.
- International stocks.
- International currency ETFs.
Open Price | |
---|---|
High Price | |
Low Price | |
Close Price | 22.01 |
Prev. Close | 22.01 |
- Alphabet (GOOGL)
- Amazon (AMZN)
- Costco (COST)
- The Walt Disney Company (DIS)
- Dollar Tree (DLTR)
- Las Vegas Sands (LVS)
- UnitedHealth Group Incorporated (UNH)
- Visa (V)
Name | LTP | Volume |
---|---|---|
Maruti Suzuki India .. | 9281.9 | 219.0K |
NTPC Ltd. | 174.5 | 8.0M |
Hindustan Unilever L.. | 2597.3 | 1.1M |
Tech Mahindra Ltd. | 1098.1 | 1.2M |
Which is best penny stocks for short term? ›
- Vodafone Idea.
- Alok Industries Ltd.
- Yes Bank Ltd.
- Dish TV India Ltd.
- Morepen Laboratories Ltd.
- GMR Power and Urban Infra Ltd.
- Jaiprakash Power Ventures Ltd.
- Mangalam Industrial Finance Ltd.
Meanwhile, experts from Goldman Sachs recently predicted in their 2023 outlook that the stock market will “most likely rally” by the end of 2023. The brokerage you choose matters. Try Public.com, the investing platform helping people become better investors.
What penny stock is hot? ›BNGO | Bionano Genomics Inc. | 0.6666 |
---|---|---|
MVLA | Movella Holdings Inc. | 2.39 |
MVST | Microvast Holdings Inc. | 1.48 |
NVOS | Novo Integrated Sciences Inc. | 0.1502 |
CLSK | CleanSpark Inc. | 4.47 |
- Treasury bills (T-bills): Best for those with a lower risk tolerance. ...
- High-yield savings accounts: Best for those who still want access to their money. ...
- Certificates of deposit (CDs): Best for those who have a specific timeline in mind and won't need access to their money before then.
- Deal with debt.
- Invest in Low-Cost ETFs.
- Invest in stocks with fractional shares.
- Build a portfolio with a robo-advisor.
- Contribute to a 401(k)
- Contribute to a Roth IRA.
- Invest in your future self.
"In the first half of 2023, the S&P 500 is expected to re-test the lows of 2022, but a pivot from the Federal Reserve could drive an asset recovery later in the year, pushing the S&P 500 to 4,200 by year-end," the investment bank said in a research note.
Will 2023 be a bull or bear market? ›“The bear [market] is almost over, and a new exciting bull market awaits in the second half of 2023,” he said, pointing to potential in technology stocks in particular.
What age should you stop investing in stocks? ›You probably want to hang it up around the age of 70, if not before. That's not only because, by that age, you are aiming to conserve what you've got more than you are aiming to make more, so you're probably moving more money into bonds, or an immediate lifetime annuity.
What are the 10 best penny stocks to buy? ›- Vodafone Idea.
- Alok Industries Ltd.
- Yes Bank Ltd.
- Dish TV India Ltd.
- Morepen Laboratories Ltd.
- GMR Power and Urban Infra Ltd.
- Jaiprakash Power Ventures Ltd.
- Mangalam Industrial Finance Ltd.
Just like mid and large cap stocks, there is no limit to how high a penny stock can go. Many massive, well-established companies were once trading for less than $5 per share.