By The technology sector consists of businesses that develop, build, and market consumer electronics, electronic components, and software. Companies in the tech sector may also provide information technology (IT) services such as cloud computing. While the best-known companies are giants like Apple Inc. (AAPL) and Microsoft Inc. (MSFT), there also are tech businesses that are classified as penny stocks. Penny stocks typically trade at $5 per share or less. Investing in penny stocks can be especially risky and may entail higher trading costs. Investors should therefore be careful when considering whether to invest in these or similar securities.
There is no widely-used benchmark for tech penny stocks, and their performance has varied significantly over the past 12 months. However, the Invesco S&P SmallCap Info Tech ETF (PSCT) provides a general indicator for tech penny stocks. PSCT has outperformed the broader market in the past year, providing a 1-year trailing total return of 131.2%% compared with 72.2% for the Russell 1000, as of March 18, 2021. All numbers below are as of March 18, 2021.
Here are the top three tech penny stocks with the best value, the fastest growth, and the most momentum, respectively.
These are the tech penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.
| Best Value Tech Penny Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing P/S Ratio | |
| Exela Technologies Inc. ( XELA) |
3.02 | 148.7 | 0.1 |
| Sonim Technologies Inc. ( SONM) |
0.99 | 65.7 | 0.7 |
| Borqs Technologies Inc. ( BRQS) |
1.57 | 69.3 | 0.8 |
Source: YCharts
- Exela Technologies Inc.: Exela Technologies is a business process automation company. It offers software and services for accounting, human resources management and other services. In preliminary results for Q4 and full-year 2020, the company reported a net loss of $88.9 million compared with a net loss of $304 million during the same time period a year before. Exela posted a net loss for all of 2020 was $178.5 million as the revenue declined 17.3% to $1.3 billion.
- Sonim Technologies Inc.: Sonim Technologies provides industrial-grade accessories, mobile devices and cloud-based software for the construction, hospitality, logistics and other sectors. The company’s net revenue was $15.8 million in the fourth quarter, compared to $17.2 million in the same quarter a year earlier.
- Borqs Technologies Inc.: Borqs Technologies is a software provider specializing in Android-based, customizable devices and cloud service solutions.
These are the tech penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors pick out growing startups that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
| Fastest Growing Tech Penny Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | Revenue Growth (%) | |
| Hello Pal International Inc. ( HP.CX) |
1.58 | CA219.45 | 2,240 |
| ImagineAR Inc. ( IP.CX) |
0.53 | CA100.05 | 276.8 |
| Ideanomics Inc. ( IDEX) |
3.25 | 1,208 | 242.1 |
Source: YCharts
- Hello Pal International Inc.: Hello Pal is a social apps platform that includes live-streaming and language learning. It has major offices in China and Canada. The platform allows its 4.4 million users to exchange gifts and “turn them into cash”. The company posted significant increases in monthly revenue in 2021 as of March.
- ImagineAR Inc.: ImagineAR offers augmented reality (AR) services as a mobile application. The application turns logos, signs and other products into AR videos, 3D holograms and other interactive content. ImagineAR and fintech company Liquid Avatar Technologies Inc. launched Oasis Digital Studios, an agency to support the development of AR-based Non-Fungible Tokens (NFTs).
- Ideanomics Inc.: Ideanomics operates as a fintech company. Its electric vehicle business provides group purchasing discounts on electric vehicles, batteries, electricity, and financing. Ideanomics also provides financial services solutions powered by AI and blockchain.
These are the tech penny stocks that had the highest total return over the last 12 months.
| Tech Penny Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($M) | 12-Month Trailing Total Return (%) | |
| Extreme Vehicle Battery Technologies Corp. ( ACDC.CX) |
0.48 | CA171.2 | 19,100 |
| Sun Pacific Holding Corp. ( SNPW) |
0.07 | 70.6 | 12,070 |
| Alpine 4 Holdings Inc. ( ALPP) |
4.13 | 611.9 | 9,100 |
Source: YCharts
- Extreme Vehicle Battery Technologies Corp: Extreme Vehicle Battery Technologies provides products for the electric vehicle and energy storage markets. The company launched its IoniX Pro EV Smart Charger Series in March 2021.
- Sun Pacific Holding Corp: Sun Pacific Holding is a renewable energy company that owns several subsidiaries. Its products include solar power bus shelters and energy-efficient lighting.
- Alpine 4 Holdings Inc.: Alpine 4 Holdings is an owner and operator of small companies that produce products for a broad range of industries, including defense, technology, and construction. Earlier in March, the company announced the merger of its two subsidiaries: Deluxe Sheet Metal, Inc. and Morris Sheet Metal Corporation. The combination will create one of the biggest sheet metal contractors in the Midwest region.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
