MEMEX (CVE: OEE)
MEMEX is an under the radar Canadian penny stock based out of Ontario that I’ve been following for quite sometime. The company is an Internet of Things platform provider that offer real-time business analytics for the manufacturing sector. Their main product “MERLIN” allows manufacturing businesses to significantly increase productivity by 10-50% which makes them more leaner and efficient operationally, helping them to improve overall profitability. Their main product claims to provide an internal rate of return of 300%, this an insane value proposition!! MEMEX currently have a market cap of C$45.47 million and it’s share price has exploded over the past four months going from 0.12 to 0.42. I expect it’s rise to continue as they have no real competitors and have formed some clever strategic partnerships with Cisco and Mazak allowing them to dominate their niche market. They have a strong balance sheet with relatively little or no debt and high inside ownership. Projections from management have predicted they will be profitable by first quarter of 2017.
Groupon (NASDAQ: GRPN)
Groupon is an online group buying website that offers local daily deals to consumers in nearly every city. It’s shocking to believe it was once one of the fastest growing companies in the world ahead of Facebook and Twitter. This is eCommerce site is now a penny stock, trading around the $5 mark. Back in 2011 the company had big expectations on Wall Street and IPO’d at $20. Everything went downhill after the IPO as it’s business model wasn’t sustainable and new competitors flooded the marketplace. Fast forward to 2016, Groupon is looking revamp it’s strategy and turnaround it’s business. In the 2nd quarter of 2016 they beat earnings estimates by $40 million with revenues of $756 million. They added over one million new customers to it’s existing base and improved margins by 13% YOY. While currently in turnaround mode, it is slightly overvalued but I would be tempted to buy shares if the price dipped below $5.
SharpSpring Inc (NASDAQ: SHSP)
SharpSpring is a software company that helps provide a platform to automate online marketing. Main competitors include Hubspot, Marketo and Pardot. Their service leverages cloud computing to power their platform to enable businesses to increase website traffic, generate leads and drive conversions to increase sales. Their innovative platform contains an array of powerful features such as; call tracking, blog builder, landing page creator, CRM software and email automation based on customer behavior. Their main goal is to make inbound marketing affordable for small and medium businesses. Sharpspring’s latest earnings report has been solid posting record revenues of $4.2 million, up $600,000 YOY. The company has $15.3 million on it’s balance sheet with only 8 million shares outstanding. They managed to add 251 new customers which add $1.8 million in recurring annual revenue. As SharpSpring continues to reinvest in it’s automation marketing technologies they will gain a stronger foothold in the market and it’s impressive growth rate is expected to continue.
SilverSun Technologies Inc (OTCBB: SSNT)
SilverSun Technologies is a little known $9M technology micro cap specializing in business software for distribution and manufacturing SMB’s. What distinguishes them from other software firms is that have their own proprietary software and provide a wide array of valuing adding activities including technical support and consulting. Last quarter this penny share reported solid financials, revenue was $8.5 million (up 44.3% YOY) with a net income of $547,000. Net margin, EPS, return on equity and return on assets are all up YOY. It’ll be interesting to see if they can maintain strong earnings. It’s rare to discover a profitable little small cap with consistent growth that is clearly on the right track. SSNT is very illiquid with barely any volume but still is a quality micro cap worth following.
Innovative Food Holdings Inc (OTCMKTS: IVFH)
Innovative Food Holdings is an undiscovered, undervalued gem in a lucrative sector with a market cap of only $11.39 million. IVFH is one of the most attractively priced companies in the food tech market, trading at a deep discount to competition. The food delivery area is fiercely competitive with unprofitable companies trading at stupid valuations, GrubHub trades at 65 times EBITDA. IVFH’s share price hasn’t performed well over the last few months and is valued at 0.46. At these prices it looks very attractive and represents a compelling investment. Revenue for last quarter was $8.3 million (up 9% YOY) and net profit is $968,000 (up $70,000 YOY).
Lucas Energy (NYSE: LEI)
Lucas Energy is a Houston based oil and gas company drilling in two big areas in Austin Chalk and Eagle Ford. As of right now shares are hovering around at $3.70. Near the end of last year, their shares rocketed after they officially acquired Hunton properties. This allowed them to expand into regions where oil and gas are abundant. Each of these properties produce over 1,000 barrels of oil daily. Expect LEI to rally once the energy sector makes a comeback.
TOP Ships Inc (NASDAQ: TOPS)
The firm provides international transportation for petroleum, chemical and oil products. Ever since TOP Ships went public 12 years ago they have struggled significantly with four reverse stock split’s. Earlier in the year it dropped to a low of 0.13 but spiked back to $3 after another split. In the beginning of August it traded sideways before a breakout above $8 but then sharply dipped back. The 50-day EMA could offer the support required to generate another bounce that could cause the price to rally over $10. Extremely risky investment in comparison to other of my picks.