Penny Stocks to Watch for December 2020

As the year 2020 rolls to a close, I’m sure many of us – myself included – are excited to wave goodbye to what has been a long, difficult, and at times utterly befuddling 12 months.

I’m afraid, however, that the economic and financial roller-coaster ride is only just getting started. As I explain in my latest videos on the Peter Leeds YouTube channel, I believe that we’re in for some months of deflation before hitting a period of pretty severe inflation.

In this environment, I still think the junior/intermediate gold and silver miners are the best place to be as the U.S. dollar loses value. Read on for some of my top mining picks and discover some new penny stocks to explore.

First, Some Updates …

First Majestic Silver Corp. (AG)

I’ve been a fan of First Majestic Silver Corp. (AG) for a long time. For many subscribers to my newsletter, the year 2020 wasn’t all bad because they saw their investments in First Majestic nearly triple between March and August.

Now that many silver miners have returned a portion of those gains, however, is it time to exit First Majestic stock? Absolutely not, in my opinion. I expect 2021 to be an even better year for shareholders, with the company reporting increasingly promising results with each quarter and stock market volatility spurring the flight to safety stocks like the precious metals.

Image Sensing Systems, Inc. (ISNS) 

I introduced readers of this Investopedia column to Image Sensing Systems, Inc. (ISNS) last month. It has done terrifically well since then, roaring up approximately 27% over the past few weeks. That climb appears to have mainly taken place on the back of some strong third quarter results released in mid-November, and relative trading volume has soared.

However, with the relative strength index (RSI) clocking in at 71.19, Image Sensing Systems stock may be overbought at the moment. We could accordingly see the stock take a breather over the next few weeks as investor excitement settles down around this one. Still, over the longer term – say, the next six to eighteen months – I firmly believe that Image Sensing Systems shares will climb above $5 yet again.

New Gold Inc. (NGD)

In contrast to Image Sensing Systems, New Gold Inc. (NGD) fared pretty poorly over the course of November, with a 20% drop in its share price bringing it to only $1.75 as of the time I was writing this article.

I don’t expect this situation to continue much longer, however. My bullish view on the junior and intermediate gold miners extends to New Gold, and as the U.S. dollar loses value, the stock should climb much higher in 2021, in my opinion. I do note with some concern the company’s dangerously high debt/equity ratios, so make no mistake: the potential upside is strong here, but the attendant risk is, too.

… And Some New Ones

RF Industries, Ltd. (RFIL)

RF Industries, Ltd. (RFIL), a recent Hot Pick from the Peter Leeds newsletter, has received quite a lot of attention from the financial press over the past few months. The attention is well deserved, in my opinion, because I believe this radio frequency device manufacturer should benefit hugely from the inevitable 5G revolution. Its products are integral to the wireless data transmission process, and its fundamentals are strong.

Nonetheless, somehow the stock is still flying under the radar for many investors, with RF Industries shares down around 17% over the past half year. This may be because its third quarter revenue for 2020 was hit hard by COVID-19, falling around 40%. But to write off RF Industries for that reason is short sighted, in my view. The epidemic has certainly slowed the roll-out of 5G across the globe – but its takeover is expected to be completed in most places by the end of 2021.

In conclusion, RF Industries might require a little patience from its shareholders. But I think the wait will be worth it, and I wouldn’t be surprised to see the stock skyrocketing at a time when most other equities are suffering.

Turkcell Iletisim Hizmetleri A.S. ADR (TKC)

Telecommunications demand remains strong, and it will likely become even stronger, in my view, no matter what turns the global economy takes. Reflecting this strength, Turkcell Iletisim Hizmetleri A.S. ADR (TKC), another recent Hot Pick from my newsletter, has an excellent five-year revenue growth average of 35.5%. When I first discussed it, Turkcell Iletisim Hizmetleri was, at $4.82, considered a penny stock, despite outshining many of its more expensive peers.

Its P/E ratio of 10.55 and forward P/E ratio of 7.81 are much stronger than the industry median, suggesting excellent value in the stock. Meanwhile, quarterly earnings per share (EPS) were up 83% in the past quarter, and EPS over the next five years are expected to climb by an average of 33%. No wonder prices rose to $5.35 in the middle of November before sinking a bit since then to $5.05. (This means Turkcell Iletisim Hizmetleri is no longer technically a penny stock … but it’s close enough that I’ve decided to include it here anyway.)

There are, of course, some issues to watch out for with Turkcell Iletisim Hizmetleri. Its debt levels are worryingly high, and geopolitical tensions abound. Perhaps the company should think about trimming its dividend and working on shoring up its finances.

But I note that the reward potential for Turkcell Iletisim Hizmetleri is also tantalizingly strong. For instance, the company’s subsidiary Lifecell operates across 39 different countries throughout the Caribbean, Central America, and Pacific regions, too – all areas where telecom demand is expected to grow substantially over the next decade (with 320 million “potential customers,” as the company calls them, in those areas). I’ll be keeping a close eye on Turkcell Iletisim Hizmetleri over the next year. I expect to bring you good news about it not too long from now.

Best Brokers for Penny Stocks

Interactive Brokers

Interactive Brokers’ very low per-share trading commission of $.005 ($1 minimum per trade) and up-to-the-split-second real-time margin calculations are ideal for penny stock traders. IBKR Lite clients can trade penny stocks for $0.

Charles Schwab

Schwab’s research pages point out the exchange on which a stock trades, which will keep you informed of the inherent risk. There are a variety of platforms available; the StreetSmart platforms have customizable charting and streaming real-time quotes. Schwab does not charge trading commissions on all stocks (including penny stocks) and ETFs.

Penny stocks are volatile and can generate catastrophic losses. Price levels in this article are hypothetical and do not represent buy recommendations or investment advice. Keep in mind that it’s your responsibility to make trading decisions through your own skilled analysis and risk management.

Peter Leeds is the author of several books, including the international bestseller, “Penny Stocks for Dummies.” He and his team also issue a newsletter devoted exclusively to penny stock picks and analysis, as well as a popular YouTube channel PeterLeedsPennyStocks.

View Article Origin Here