The 7 Most Compelling Penny Stocks to Watch Right Now (2023)

As 2023 unfolds into a promising, positive year, investors are looking to load up on the next big opportunity. The consensus amongst the market punditry is that value and reasonably priced stocks with company-specific catalysts are likely to thrive in the current economic environment. With an optimistic outlook, it’s time to turn our attention to the best penny stocks to watch, offering potential multibagger returns.

It’s also imperative to consider that low-priced stocks could also plummet to zero. However, selecting the best penny stocks with wide “moats” could tilt the odds in your favor. Allocating 10% to 20% of your portfolio to penny stocks could skyrocket your portfolio. The challenge is to invest in these stocks at appealing valuations and exhibits patience while holding onto these investments.That said, here are seven of the most compelling penny stocks to watch.

American Shared Hospital Services (AMS)

American Shared Hospital Services(NYSEAMERICAN:AMS) is a small-cap leading provider of radiation therapy equipment to some of the most prestigious medical facilities. In addition, it’s also in a pole position to effectively ride the wave of growing demand for cutting-edge healthcare equipment. With a strong performance since the start of the year, the firm isn’t showing any signs of slowing down.

While AMS’s latest quarterlies suggest that earnings growth may slow, its management has actively pursued organic growth opportunities that could pay off in the long run. Nevertheless, revenue and free cash flow margin growth has improved by double-digit margins in the past year.

Solid Power (SLDP)

Solid Power (NASDAQ:SLDP)is arguably one of the front-runners in the race to commercialize forever batteries, potentially generating millions in new revenues.It has the backing from automotive stalwarts such as BMW(OTCMKTS:BMWYY), which would significantly accelerate its project. Moreover, it was recently awarded a whopping $5 million in funding from the U.S. Department of Energy, which should help lower the prices of its EV batteries.

On top of that, it will be delivering its EV cells for testing to its automotive partners in the upcoming months.With a massive liquidity buffer of nearly $500 million, the company has the resources to pursue aggressive R&D investments. If it succeeds in commercializing its solid-state batteries, the sky is the limit for SLDP stock.

Cronos Group (CRON)

Cronos Group (NASDAQ:CRON)is a leading Canadian cannabinoid firm with a strong presence in key markets such as Canada, Israel, the U.S., and Germany. It’s grown its business remarkably over the years, with its 5-year average revenue growth at a whopping 125%. Its stock, however, is down in the doldrums, despite closing out last year with a colossal $765 million in cash and $113 million in short-term investments.

Revenues for the firm improved by a healthy 23%, while EBITDA losses narrowed by 50% to $80 million last year. Additionally, operating leverage and cost savings plans will imply impressive improvements in key margins.One of its main competitive advantages is its robust positioning in the Israeli cannabis market. The country imported over33,000 kg of medical cannabis last year, roughly 11,000 kg more than in 2021.

Tilray Brands (TLRY)

Tilray Brands (NASDAQ:TLRY)is a hidden gem in the cannabis sector, with stellar fundamentals, making it an alluring value investment opportunity. The company has consistently delivered positive adjusted EBITDA and will likely achieve positive free cash flow in the current financial year. Moreover, with a strong liquidity buffer of $408.3 million, its financial prowess undeniably renders TLRY stock an appealing prospect.

Furthermore, Tilray has ventured into the realm of craft brewing in the U.S. with its acquisitions of two brewing companies establishing a formidable infrastructure. In addition, its $56 million acquisition of Hexo has added another layer to its core cannabis business in the Canadian market. As TLRY stock has languished at a 55% discount over the past 12 months, investors should watch this remarkable player with enormous potential.

Ammo Inc. (POWW)

Ammo Inc. (NASDAQ:POWW)is a renowned ammunition enterprise catering to retail and government sectors. Over the years, it’s been an incredibly consistent business, generating triple-digit revenue growth in the past five years.

However, its business has been feeling the heat in the past year, following inflationary headwinds due to rising input costs. In curbing the inflationary effects, the firm is gearing up to shift its focus towards adopting cutting-edge technology solutions that could bolster working capital efficiency and operating margins and enhance cash flows.

In an astute strategic move, it acquired GunBroker.com, a thriving gun auction site boasting a staggering seven million unique monthly visitors. It positions the company to mine invaluable data, unlocking a treasure trove of opportunities.

The bearish market conditions and stringent firearms regulations have weighed down POWW stock, with it trading at a highly enticing entry point for long-term investors.

Uranium Energy(UEC)

Uranium Energy(NYSEAMERICAN:UEC) is a Texas-based uranium mining business. The firm has two production-ready mining projects located in the U.S. and high-grade projects in Canada. Moreover, the company can capitalize on the massive growth expected in the uranium energy sector with a rock-solid balance sheet.

The uranium energy space is set for explosive growth due to a substantial shortfall between the global requirements and the current output. As I discussed in one of my previous articles, the CEO of Sprott Asset Management, John Ciampaglia, notes a 50 million pound shortfall in the supply and demand for nuclear energy. Hence, with the growing demand for uranium energy rising, UEC is in position to capitalize on this trend and deliver strong returns for investors.

Enel Chile (ENIC)

Enel Chile (NASDAQ:ENIC) is one of the largest utility companies in South America. ENIC is a key player in the Chilean electricity space, providing energy to millions of people in and around the Santiago region. Moreover, the firm is powering through a sustainable future by focusing on green energy methods such as hydroelectric, wind, and solar.

The severe drought in Chile significantly impacted hydrology conditions last year. However, with the improving hydrology conditions and the effects of gas prices being marginalized, the company is well-positioned to weather the storm and emerge even stronger. The improvement in its operating environment is evidenced by its blow-out results in the past couple of quarters. Its EBITDA improved by 40% last year, compared to its Investor Day 2021 estimates.

Hence, for those looking to invest in a forward-thinking utility stock with robust long-term potential, Enel Chile is definitely worth investing in at this time.

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

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.