Penny Stocks to Buy Now: EXCO (NYSE:XCO), Golden Minerals (NYSEMKT:AUMN) and Banro (NYSEMKT:BAA)
In both the energy and mining sectors, sharp swings in commodity prices could turn several speculative penny stocks into real winners. It’s important to keep an eye not only on spot market prices for commodities such as oil, gas and gold, but also on long-term secular changes that are changing the balance between supply and demand.
Within the oil & gas sector, one major change has been the embrace of shale gas & oil exploration, and one company that could be poised to profit from this trend is EXCO Resources (NYSE:XCO), a Texas-based oil and natural gas company with strong shale resource plays within the continental United States. The company’s three big shale oil deposits are located in Texas, Louisiana and Appalachia.
Right now, investors are down on the company, with a consensus “sell” rating on the company. Shares of the company currently trade at $1.10, and the price target for the company is only $0.50. That would seem to suggest that shares of the company are going to collapse to a 52-week low ($0.51), compared to a 52-week high of $1.94.
But it’s exactly this pessimistic market sentiment that might lead to a real bargain for the stock. This is not a tiny company – the total market capitalization of EXCO is $290 million, with 65% institutional investor ownership. Think of this as a chance to go contrarian.
As recently as July 2015, RBC Capital Markets had upgraded the company from “Sector Underperform” to “Sector Perform.” There’s also been a management change, with the company getting a new CFO on August 22, which could hint at a coming turnaround.
So what’s happened in the past 12 months that has investors so down? One big factor has been the price movements in the oil and gas markets. At a certain price point, shale oil & gas exploration simply is not profitable enough. That could be what’s happening with the company’s stock – but as soon as momentum returns to the shale exploration sector, the stock could be poised for a rebound.
Another penny stock that could be poised for a breakout to the upside is Golden Minerals Co. (NYSEMKT:AUMN), which is currently trading at $0.795. Over a 52-week period, shares of the company have traded between $0.12 and $1.16. The company’s total market capitalization is $69.56 million, and institutional investors own 52% of the company’s shares.
Golden Minerals Co is a Colorado-based mining company, with precious metals and minerals exploration mines in Mexico and Argentina. The big factor in the company’s favor is a much stronger balance sheet in 2016 compared to the year-earlier period. Over the first six months of the year, the company has eliminated nearly $1 million in debt from the balance sheet. Golden Minerals ended 2Q 2016 with $3.9 million in cash and cash equivalents. That sets up the company for a strong 2017.
And, if you’re really willing to take a risk on a penny stock, one of the penny stocks to buy now is a under the radar jr. mining stock. Banro Corporation (NYSEMKT:BAA). Shares of the company are trading at only $0.322. Over a 52-week period, shares of the company have traded in a range between $0.15 and $0.48.
While the $100 million market cap company is based in Toronto, Canada the company’s major mining assets are actually located in the Democratic Republic of the Congo in Africa. The company operates the Twangiza gold mine in the Congo and holds 10 exploration permits and mining licenses, so the future growth potential is definitely there if you’re willing to dial up the risk.
So now you have the short list of penny stocks to buy now. Do your research and use our findings to execute these trades with confidence.
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