10 Best Penny Stocks to Buy for April 2022

US stock markets were extremely volatile in the first quarter. However, as March drew to a close, markets bounced back from the lows. Some of the penny stocks also rebounded amid the broader market recovery.

The SEC defines penny stocks as securities that trade below $5 and are issued by small companies. Due to the sell-off in markets, several stocks, especially those that went public through a SPAC reverse merger, have also turned penny names. Here are the 10 best penny stocks that you can consider for April 2022.

1. Hycroft Mining (NYSE: HYMC)

Hycroft Mining is a penny gold and mining company with over 15 million ounces of gold and 600 million ounces of gold reserves. The company has been in the news after AMC Entertainment and Eric Sprott announced an investment in the company. HYMC capitalized on the euphoria and raised cash by selling shares. Overall, it has raised $195 million in cash and also extended its debt maturities to 2027.

HYMC is a penny gold mining company

The outlook for gold looks positive and with the capital raise, HYMC has addressed its balance sheet. The company owns the Hycroft mining complex which it is developing. The stock could see interest from retail investors after AMC’s backing.

Overall, if you are a risk-tolerant investor looking for a multibagger penny gold mining company, HYMC might fit the bill.

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2. Mullen Automotive (NYSE: MULN)

Mullen Automotive is another penny stock that can be on your radar. The company is working on electric cars and solid-state batteries. It has reported positive reports for its solid-state batteries. Notably, solid-state batteries can help overcome several shortcomings of current batteries. If the company can successfully commercialize its electric cars and solid-state batteries, it can be a good long-term wealth creator. However, like HYMC it is also a speculative play.

Solid-state batteries can be the future

Solid-state batteries can be the future of electric cars. They are lighter, weigh less, have a higher range, and take much less time to charge. No wonder major automotive companies are investing in technology. While it is still years before we see a solid-state battery in an electric car, given Mullen’s low market cap, it is one penny stock that you can look at.

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3. Taseko Mines (NYSE: TGB)

While there has been a bloodbath in penny stocks in 2022, Taseko Mines has not only held its ground but is the green for the year.

What makes TGB a good penny stock to buy?

TGB is a copper miner having operations in Canada and the US. Notably, most of the copper mining is situated in Latin America with Chile being the largest producer. The region has been known for political volatility and some of the new mines have faced opposition from local communities.

TGB’s operations in low-risk countries make it an attractive penny stock to buy. Also copper is among the metals where most analysts have a bullish long-term forecast. The copper intensity in electric cars and renewable energy is higher than in ICE (internal combustion engine) cars and non-renewable energy generation respectively.

Copper demand is expected to be strong over the next decade led by the green energy transition. However, supply might not keep pace given years of underinvestment. Copper inventories are running quite low which is supportive of the prices.

While most copper producers are large-cap companies, Taseko Mines is a penny stock in the copper industry. Reasonable valuations and copper’s favorable long-term outlook make TGB a penny stock worth considering.

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4. Arrival (NYSE: ARVL)

Arrival is a UK-based electric vehicle company working on electric buses and vans. It went public through a SPAC reverse merger at a valuation of $13 billion. However, after the initial hype, the stock now trades at a fraction of that valuation. Startup EV companies have been under pressure and the sell-off has only intensified in 2022. The company has a differentiated business model and is building micro-factories unlike some of the other companies that build massive plants.

Wall Street finds Arrival a penny stock worth betting on

Wall Street analysts are quite bullish on Arrival stock and its median target price of $7.17 is a premium of almost 88% over current prices. The company is expected to generate revenues of $5 billion by the fiscal year 2023, which is over twice its current market cap. If the company can deliver on the vehicle deliveries, Arrival could be a multibagger penny stock.

The outlook for the EV industry looks positive and at current prices levels, Arrival looks like a penny stock worth watching.

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5. Volta Charging (NYSE: VLTA)

Volta Charging is an electric vehicle charging company that also went public through a SPAC reverse merger. The stock tumbled after its founder Scott Mercer and co-founder Chris Wendel announced their resignation from the company. The stock has fallen below $5 and is in the penny stock category.

In the release, Mercer said, “Volta was started with the ambition to be the best business model in the EV charging space, and now the company’s focus needs to turn to scaled, public-market-facing growth.”

Meanwhile, the company tried to downplay the exit. Kathy Savitt, Co-Chair of the Board said “The Board believes firmly that Volta is a great company with strong fundamentals, and is well-positioned to capitalize on the enormous opportunity before it.” Savitt added, “We look forward to a smooth transition as Volta’s talented executive leadership team executes on the company’s strategic plan to build the fuelling infrastructure of the future.”

Wall Street wasn’t convinced though and Matt Summerville, an analyst at D.A. Davidson lowered Volta’s target price from $13 to $5 while downgrading it from a buy to neutral.

Volta is a good penny stock in the EV charging industry

The outlook for EV charging companies looks quite bullish as the world transitions towards electric cars. After the steep fall in Volta stock, it now looks like a good penny stock to consider.

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6. Sundial Growers (NYSE: SNDL)

Just when it looked that cannabis stocks are dead for good, we’ve seen a strong rally in all cannabis names including Sundial Growers. SNDL is a penny cannabis company with a strong balance sheet and is among the best ways to play the expected uptick in the US cannabis industry including possible federal legalization.

It reported cannabis revenues of CAD (Canadian dollars) 14.4 million in the third quarter of 2021, which was 12% higher than the corresponding quarter in 2020. It posted an adjusted EBITDA of CAD 10.5 million. It has almost $800 million worth of cash and other investments on its balance sheet while its market cap is just around $1.5 billion.

SNDL is a penny cannabis stock with a strong balance sheet

SNDL capitalized on the meme stock rally and issued shares to raise cash. As a result, it’s a cash-rich company now without any debt. At these prices, there is a reasonable margin of safety in SNDL stock as the cash on its balance sheet would provide valuation support.

Notably, it also announced a stock buyback which is a sign of the company’s faith in its valuation. SNDL would soon release its fourth-quarter earnings. Any positive surprise in the earnings coupled with progress on the marijuana legalization bill in the US could take the stock higher in the short term. Overall, at these prices, SNDL looks like a penny cannabis stock worth betting on.

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7. Grab Holdings (NYSE: GRAB)

Grab recently went public and has had a dismal ride since then. The stock fell into the penny stock category trades below $5 and is in penny stock category. Grab is a play on the long-term growth story in the ASEAN region. The company has a strong moat in the region and is transforming into a superapp. The long-term forecast for the company looks positive. Notably, with Chinese stocks looking risky amid the continued crackdown in the communist country, some investors might find Southeast Asia a good bet.

Grab is a penny stock in the ride-hailing and delivery industry

Southeast Asia has a total population of 670 million and Grab sees its total addressable market rising to $180 billion by 2025. The company expects to post revenues of $4.5 billion and an adjusted EBITDA of $0.5 billion by 2025.

Goldman Sachs is bullish on Grab stock

Goldman Sachs is bullish on Grab stock and believes that the company has a clear path toward profitability. Wall Street analysts are quite bullish on Grab and the stock has 11 buys and one sell rating. Three analysts rate it as a hold or some equivalent. Its median target price of $6.8 which is a 92% premium over current prices. Grab now has a market cap of just about $13.5 billion which looks attractive considering the massive market opportunity for the company.

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8. Paysafe (NYSE: PSFE)

Paysafe is also a penny stock now. If you are looking to buy penny stock in the fintech industry, PSFE looks like a good bet. Unlike the stocks that we discussed so far, PSFE is a mature company and is also positive on the EBITDA level. It has significant scale and processes annual volumes in excess of $100 billion. It has also been expanding internationally to spur its growth.

PSFE is an attractively valued penny fintech company

Last year, it announced the acquisition of SafetyPay for $441 million. Founded in 2007, SafetyPay enables e-commerce transactions and is primarily present in Latin America. It had announced the acquisition of PagoEfectivo which gave it a foothold in Latin America.

The long-term forecast for Paysafe stock looks positive. The company has a market-leading position in the US iGaming market. As more states legalize sports betting it would bode well for PSFE’s long-term forecast. The fintech industry has a positive outlook over the long term and companies like Paysafe look well placed to capitalize on the opportunity.

There has been a sell-off in richly valued fintech names like Affirm, SoFi, Block, and PayPal. However, PSFE’s valuations look a lot more reasonable. If you are looking to buy a reasonably valued penny stock in the fintech industry, PSFE should be on your radar.

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9. Gee Group (NYSE: JOB)

Gee Group is a microcap company with a market cap of just above $60 million. It is a staffing company that should see better days amid the strength in the US job market. The stock has fallen sharply in 2021 but should bounce back in 2022. The US labor force participation has improved in November and more people should enter the labor market in 2022 which should help boost the demand environment for Gee Group stock.

JOB is a penny stock to bet on the strong US job market

The stock trades at an NTM enterprise value-to-EBITDA multiple of just about 4x which looks quite attractive. If you are looking to buy penny stock in the staffing industry, JOB stock should definitely be on your watchlist.

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10. AdvisorShares Dorsey Wright Micro-Cap ETF (NYSE: DWMC)

Since penny stocks are risky and more volatile, you can also consider an ETF that invests in such stocks. While passive ETFs are otherwise a good investing strategy, for penny stocks it might be prudent to look at an active fund. DWMC is one ETF that can give you exposure to penny stocks. However, the ETF has a higher net expense ratio of 1.27%.

DWMC is a good way to invest in penny stocks

ETFs can be a good investing strategy, especially for investors who lack the time or analytical skills to pick individual stocks. Especially when it comes to penny stocks, a buy-and-hold approach might not work, as say for quality large-cap stocks. It might therefore be prudent to have an expert fund manager take the investment call.

All said, given the current macro environment, investors should do their due diligence before buying penny stocks. Also, it would be prudent to diversify the investment across multiple names and do a staggered buying.

Penny stocks have been out of favor and might continue to do so for some more time. However, the quality penny names should eventually recover.

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