10 Best Penny Stocks

Finder’s list of the best penny stocks comes from our proprietary ranking system and is meant to be a starting point for your own research. It’s not advice to buy any particular stock.

Penny stocks generally trade for less than $5 per share and are often available on major exchanges. Some narrow the definition to include only small-cap stocks that trade over-the-counter for less than $1 per share.

For our list of the best penny stocks, we chose stocks trading for less than $5. These stocks could make big intraday moves and are relatively cheap enough to build large positions.

10 best penny stocks to buy now in Canada and the US

---

What you should know before buying the best penny stocks

There’s no single winning strategy to finding what experts might call the best penny stocks, because the most important considerations are your own goals and circumstances.

Our stock list is not personal financial advice—your personal objectives and financial situation have not been taken into consideration. Do your own research, and speak with an investment professional if in doubt.

It’s important to know whether a stock is performing well, making a profit, paying dividends or going backwards. Always remember that past performance does not guarantee future results. Investments can increase and decrease in value.

• How did we pick the best penny stocks?

  We used Finder’s proprietary algorithm to rate Canadian stocks listed on the TSX and US stocks listed on the NYSE and Nasdaq. Our rating is based on price, performance, profit, revenue and dividends. Our fundamental analysis filters stocks by taking into account historical prices, dividends, revenue growth, (low) price volatility and profit margins.

  This might indicate a quality stock, but we do not guarantee the performance or returns of any investment.

  For Canadian stocks, we filter out stocks that have been listed for less than 5 years and companies that have market caps of less than CAD $200 million. For US stocks, we filter out stocks that have been listed for less than 5 years and companies that have market caps of less than $1 billion. This is done to better compare historical data and avoid smaller, more speculative stocks.

  This methodology no doubt filters out some good stocks, so our decision to include or exclude a stock from our list does not indicate whether it’s a good or bad investment. For more information about our algorithm, check out our stock ranking page.

This list and data was compiled November 17, 2022. The algorithm was last updated 27 January 2021.

Compare brokers to buy the best penny stocks

You can buy Canadian and US stocks through the following Canadian platforms. Learn more about how to get started in our guide to opening a stock trading account.

Online stock trading in Canada

Type of investor suited to penny stocks

Penny stocks are highly speculative investments. The odds losing all your money are greater than gaining high returns. As such, penny stocks are more suited to:

• Experienced investors
• Investors with high risk tolerance
• Hedge fund managers and other professional investors
• Those with a long-term horizon who are willing to ride out short-term volatility
• Investors who are willing to take a bit of a gamble

Current penny stock trends

What happens in the future is anyone’s guess. However, we do know some big themes that are driving the market.

Eastern Europe conflict

In response to the conflict in Ukraine, many Western countries have placed sanctions on Russia. This has seen skyrocketing prices of commodities such as oil and gas, which Russia is a major producer of. A strong oil price helps the share price of penny stocks.

Supply shortages

Differing COVID-19 policies around the world continues to impact supplies of goods and services. For example, the US is facing a struggle to supply infant formula and a shortage of approved providers.

Growth stocks

Tech businesses are often among the most heavily hit during periods of inflation and rising rates. But the world is changing, creating new opportunities for some business, for example, those in the artificial intelligence or electric vehicle industries.

Frequently asked questions

• What are penny stocks?

  Penny stocks are usually defined as stocks that trade for less than $5. That being said, there is no universally agreed upon definition of penny stocks. Some narrow the definition to include only over-the-counter stocks or stocks that trade for less than $1.

• How do I invest in penny stocks?

  You can buy and sell penny stocks like any other stock by opening a stock trading account, using a stock screener to search for cheap stocks, studying company financials and other data to find worthwhile investment opportunities and placing a market or limit order. A market order lets you buy now at the current market price, while a limit order lets you buy or sell when the price is more favourable.

• Are penny stocks safe to buy?

  Penny stocks are often issued by small, newly-listed companies and are generally considered high risk. Penny stocks are known to be volatile, so if you're risk averse, consider investing in large, more established blue chip stocks.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.