- 1 Questor Technology Inc (CVE: QST)
- 2 Groupon (NASDAQ: GRPN)
- 3 MEMEX (CVE: OEE)
- 4 Zynga (NASDAQ: ZNGA)
- 5 Plug Power Inc (NASDAQ:PLUG)
- 6 SharpSpring Inc (NASDAQ: SHSP)
- 7 SilverSun Technologies Inc (NASDAQ: SSNT)
- 8 Innovative Food Holdings Inc (OTCMKTS: IVFH)
- 9 Lucas Energy (NYSE: LEI)
- 10 TOP Ships Inc (NASDAQ: TOPS)
Questor Technology Inc (CVE: QST)
Questor Technology is an environmental clean-technology company that provides incinerators to the Oil & Gas market. Their incinerators help oil and gas companies globally to reduce waste to meet regulation standards and save money. Questor Technology had a couple of bad years due to an industry-wide downturn in the O&G sector. It reached an all-time high of $4.63 in mid-2014 and dropped as low as 0.47 by the end of 2016. They altered their business model and started renting incinerators instead of selling them. Renting is a more suitable option for their customers and allows them to operate efficiently with lower costs in the short run. In the first six months of 2017, their revenue increased by an impressive 140%. Their stock price followed suit and is up over 100%. Questors revenues are improving each quarter and have a strong balance sheet with no long-term debt. The company is till pretty small and only has a market cap of $41.27M. Despite emerging from the economic downturn strongly, it’s still a risky investment. The companies have turned around and it’s a penny stock on the rise.
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 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 2017, Groupon is looking revamp it’s strategy and turnaround it’s business. 2017 has been as an excellent year for Groupon as they continue to beat estimated earnings each quarter. The stock is up 44% since January and investor confidence is spreading. They introduced two new products; Groupon+ and BeautyNow, that is starting to gain some traction. Groupon continues to build and maintain their 48 million user base despite operating in a competitive marketplace. Although they have some nice momentum now, some investors remain bearish on the companies future as short interest spiked to 15%.
MEMEX (CVE: OEE)
MEMEX is an under the radar Canadian penny stock based out of Ontario that I’ve been following for quite some time. The company is an Internet of Things platform provider that offers real-time business analytics for the manufacturing sector. Their primary 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!! After having a strong performance last year, MEMEX market cap has dropped from C$42 million to C$24.45 million. Their share price exploded in 2016, going from 0.12 to 0.42. Since then MEMEX has consolidated its operations, so it’s better able to cope with expansion. I expect the stock price to recover as they have no real competitors and have formed clever strategic partnerships with Cisco and Mazak. In the future, this hopefully will allow them to dominate their niche market. They have a strong balance sheet with relatively small debt and high inside ownership. MEMEX is still unprofitable, but I expect that to change in 2018. This is a long-term investment idea that requires a lot of patience to own.
Zynga (NASDAQ: ZNGA)
Zynga is one the leading developers of social games and is most well-known for games such as Farmville, Zynga Poker and CityVille. They generate the majority of their revenue by developing freemium games. Zynga IPO’d at $11 per share in December 2011, peaking at $15.91. Similarly to Facebook, their stock performed terribly in the months after their IPO. Back then the business was highly criticized due to their over-dependence on Facebook as a revenue source. By 2012 the company slumped to a low of $2.09 and its business model was failing. Zynga did well to survive in recent times by adapting from web-based gaming to mobile gaming. Revenue is growing quarter-on-quarter since mid-2016. Their turnaround is slowly starting to gather pace and cost-cutting initiatives seem to be working well. The company operates in a competitive environment and will need to keep releasing new innovating games as well as up selling to existing customers. They do have a healthy balance and will use some of the extra cash to make strategic accusations. Zynga is still in the early stages of their turnaround and is up 40% year to date. Would wait for the stock to drop below their 50-day EMA before entering a position.
Plug Power Inc (NASDAQ:PLUG)
Plug Power is an alternative energy company that manufactures hydrogen and fuel cell systems. Fuel cell technology has been hyped as the next big thing over the last five years but we’re still waiting to harness its benefits. One day they hope to one replace lead-acid batteries with fuel cell technology. Plug Power’s stock price exploded in 2014 when it announced a deal with Walmart. After their until initial spike, their share price has been in a slow, depressing decline until this year. eCommerce giant, Amazon recently inked a deal with Plug Power to purchase $70 million worth of hydrogen fuel cells. Analysts estimate that this could potentially lead to $600 million worth of sales. The deal also allows Amazon to purchase up to 23% of the business. Jeff Bezos has a keen eye for investing early in promising technologies to gain a first-mover advantage, just like they did with Cloud Computing. This a risky investment because if the company can’t become profitable by the end of 2017, investors will lose patience.
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 primary 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 its balance sheet with only 8 million shares outstanding. They managed to add 251 new customers who add $1.8 million in recurring annual revenue. As SharpSpring continues to reinvest in its automation marketing technologies they will gain a stronger foothold in the market and its impressive growth rate is expected to continue.
SilverSun Technologies Inc (NASDAQ: SSNT)
SilverSun Technologies is a little known $18M 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. They provide a wide array of valuing adding activities including technical support and consulting. Last quarter this penny share reported slightly disappointing financials. Revenue was $8.5 million with a net income of $120,493 (drop from $547,120 in the previous quarter). It’ll be interesting to see if they get back on the right track. Despite declining revenues, it’s rare to discover a profitable little small cap. We will keep on an eye on SSNT and wouldn’t invest until they prove they can maintain stable earnings. 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 ridiculous 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 splits. Earlier in the year it dropped to a low of 0.13 but spiked back to $3 after another split. At the beginning of August, it traded sideways before a breakout above $8 but then sharply dipped again. 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.