Are Penny Stocks in the Market Worth Buying?

Let's get this out of the way: Penny stocks are booming right now. They have never been hotter, especially among new entrants into the financial market.

Whether the stock is worth it entirely depends on the company itself. Not all penny stocks are illegitimate. At the same time, they can be pumped and dumped or fall victim to short-and-distort scams. It is all about doing your due diligence.

Novice investors are always trying to discover the next big thing, which can be hard to do since there are thousands of penny stocks. However, thanks to free trading platforms, the barrier to entry has been lifted.

An Example of a Promising Penny Stock

The Green Organic Dutchman (TGODF/TGOD)

• 05/27: $0.41
• Market Cap: $216.15 million

This company has been around since 2012, and it went public in May 2018. It is still considered one of the best cannabis companies in North America, despite crashing from $8 to as low as 21 cents. At first glance, this does not seem like a worthwhile stock to invest in, but its financials have immensely improved, according to the first-quarter report:

• The velocity of distribution is rising.
• Certification approval is the European Union is expected shortly.
• The company anticipates revenues of $40 to $50 this year.
• The sale of properties will be used to pay off older debt.
• Officials expect entry into the vast U.S. market soon.

Plus, on the market, TGODF shares are highly liquid, with an addition of 200,000 positions in one session. Also, zero "Sell" ratings from market analysts.

Final Thought

Not all penny stocks are worth it.

The difference between this stock and the long list of pump-and-dump tickers is that the fundamentals are strong. You cannot just buy a stock because someone tweeted about it, or you thought you could get in on the ground floor before it goes "to the moon." Always do your homework.