3 Penny Stocks Poised to Make a Fortune for Bold Investors

Often valued at less than $5 per share, penny stocks can seem attractive to investors looking for high-risk, high-reward opportunities. These stocks typically feature companies with small market capitalizations and volatile trading patterns. Although they can offer substantial gains over short periods of time, they also carry notable risks. Some of these include their susceptibility to manipulation, low liquidity, and the potential for sudden price fluctuations. This makes them unsuitable for most investors’ portfolios.

However, opportunities with significant potential lie in this risky corner of the stock market. Of course, most penny stocks are penny stocks for a reason. However, some show promising prospects. For example, a biotech startup might be close to getting FDA approval for a breakthrough drug. Additionally, a technology company could pioneer a revolutionary AI-based platform. In other cases, a penny stock may be too cheap to ignore at its current levels. This may be true despite its penny stock status.

In this article, I’ve selected three penny stocks that either present compelling growth stories or are too cheap in terms of fundamentals. Although they carry various risks, these penny stocks could have the potential to generate substantial returns for aggressive investors if their bullish investment theses come to fruition.

Planète Labs (PL)

Currently trading at just $1.85 per share, Planet Laboratories (NYSE:PL) is the first promising penny stock on my list. Planet Labs is a major player in Earth imaging and satellite data analysis. It is known for its fleet of small satellites that provide high-resolution images of the entire globe. Its satellites monitor environmental changes, track agricultural changes and contribute to disaster response efforts globally.

Over the past few quarters, growing demand across a wide range of industries has supported Planet Labs’ growth. These are agriculture, forestry, urban planning and defense. Additionally, these customers need access to Planet Labs imaging data on a recurring basis. The company thus benefits greatly from multi-year contracts. This guarantees. predictable cash flow and revenue visibility.

To illustrate the underlying demand for Planet Labs’ imaging services, at the end of its Q1 2025 fiscal period (i.e., end of April 2024), the company had 1,031 customers. Notably, the number of customers has increased sequentially every quarter for the past three years. Additionally, Planet Labs’ revenue was $60.4 million for the quarter. Revenue increased by 15% compared to last year. Multi-year contracts generated more than 90% of revenue.

Although Planet Labs is still unprofitable, an argument bears might make, its margins are increasing slightly heading into the quarter, implying the possibility of a positive outcome sooner rather than later.

Latham Group (SWIM)

Shifting gears to my second penny stock to buy, let’s take a look at Latham Group (NASDAQ:SWIM). Currently trading at $3.75 per share, Latham is a major player in the swimming pool market. Its diverse portfolio of swimming pool components includes fiberglass swimming pools, automatic safety covers and various related accessories. The company caters to both residential homeowners and commercial customers and is generally praised for offering customizable solutions that promote durability, aesthetics and energy efficiency.

The main problem the company faces that has hampered its investment case is its razor-thin margins. In recent years, Latham has either lost money or posted barely positive margins. Combined with the fact that its sales also declined following the pandemic-induced pool market boom in 2021, you can understand why Latham has become a penny stock in the meantime.

Nonetheless, Latham’s growth prospects remain strong. They include the growing demand for home improvement projects and the popularity of residential swimming pools. This trend, in turn, is driven by lifestyle changes and the increasing emphasis on outdoor living spaces. Additionally, with shares trading at just 0.85 times this year’s forecast sales, the stock is poised for significant upside momentum once Latham achieves sustainable positive margins.

Dynagas LNG Partners (DLNG)

My last penny stock with notable potential is Dynagas LNG Partners (NYSE:DLNG). It operates as a master limited partnership, specializing in the ownership and exploitation of liquefied natural gas (LNG) carriers. The partnership primarily serves energy giants engaged in global LNG production, transportation and distribution. His ship Arctic Aurora, for example, is now employed by Equinor (NYSE: EQNR).

Currently sitting at $3.77, Dynagas’s share price has significantly underperformed over the past decade. This resulted from the company loading its balance sheet with expensive debt and high-yielding preferred stock that drained common shareholders. However, notable deleveraging has occurred in recent years, with management devoting the bulk of its operating cash flow to reducing debt and increasing shareholder value. Shares have been gaining upward momentum lately, a trend that I hope will persist as long as management continues to focus on strengthening the partnership’s financial position.

On Penny Stocks and Low Volume Stocks:With rare exceptions, InvestorPlace does not publish commentary on companies with market capitalizations of less than $100 million or that trade fewer than 100,000 shares each day. Indeed, these “penny stocks” are often the playground of scammers and market manipulators. If we ever publish commentary on a low-volume stock that may be affected by our comments, we require that InvestorPlace.com editors disclose that fact and warn readers of the risks.

Learn more:Penny Stocks How to profit without getting scammed

As of the date of publication, Nikolaos Sismanis did not hold (neither directly nor indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com’s publishing guidelines.