10 Best Penny Stocks to Buy in November 2021

The SEC defines penny stocks as securities that trade below $5 and are issued by small companies. Penny stocks are more volatile and require higher due diligence as compared to larger companies.

Penny stocks are a lot riskier as compared to larger companies. However, some of the penny stocks could be good buys even as it’s always advisable to limit your exposure. Here are the 10 best penny stocks that you can buy in November 2021.

1. Lordstown Motors (NYSE: RIDE)

Lordstown Motors had gone public through a SPAC (special purpose acquisition company) merger which has been the preferred listing model for companies in the green economy. The stock has fallen almost 50% from the SPAC IPO price of $10 and is now just above the $5 price level. Meanwhile, if you are looking at buying a penny stock in the electric vehicle industry, RIDE could be a good fit.

Why has RIDE stock fallen?

While green energy stocks have risen over the last month, RIDE hasn’t participated in the rally. The company has delayed the launch of its Endurance pickup model to the third quarter of 2022 which is one year behind schedule. It also had to revamp its top management after Hindenburg Research accused the company of fabricating the order book, an allegation that RIDE at least partially admitted.

What makes RIDE a good penny stock?

RIDE seems to have left the worst behind. The company has sold the Lordstown facility to Foxconn which would now make cars for the company on a contract basis. It has also secured funding and has a new management team. RIDE has put the legacy issues behind it. The partnership with Foxconn would also lower the execution risk for Lordstown. Notably, Foxconn sees contract EV manufacturing as a big opportunity and has also tied up with Fisker for its second car.

RIDE now has a market cap of less than $1 billion. If the company’s upcoming Endurance pickup can appeal to buyers, it could be a gamechanger. That said, the EV market would be quite crowded over the next couple of years and RIDE has also lost the first-mover opportunity due to the production delay.

However, at these prices, RIDE looks like a penny stock worth betting on. While it’s risky, like other penny stocks, the risk-reward ratio looks attractive at these prices.

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2. Zomedica (NYSE: ZOM)

Zomedica is a penny stock from the pet care industry that could be worth betting on. The company is commercializing its Truforma product which is a pet care diagnostic devise. Meanwhile, the sales of Truforma have disappointed for two consecutive quarters now. It reported revenues of only $22,514 in the third quarter. The company has started a Customer Appreciation Program (CAP) under which it is giving the equipment for free but the buyers would have to buy the assays. It said that has so far enrolled 144 customers as part of the program.

Last month, ZOM also acquired PulseVet which makes the electro-hydraulic shock wave technology for the treatment of a wide variety of conditions in vets. Even after the acquisition, ZOM has around $200 million as cash on its balance sheet.

ZOM is a good penny stock in the pet care industry

Since ZOM is working on commercialization, the risk is much lower than clinical-stage companies. If ZOM can be successful in making Truforma successful, the company can be a multibagger. The product can transform the animal diagnostic market as it can reduce the time for test reports. ZOM expects the market for animal diagnostics to rise to $2.8 billion by 2024.

ZOM has a market cap of below $500 million. However, if the company can be successful with Truforma, it could be a multibagger penny stock. The company expects to add more assays in 2022 which would help it increase the revenues even further. So far, the sales of Truforma haven’t been up to the mark but the release of more assays and the CAP program would help increase the adoption. After the crash from the peaks, ZOM looks like a good penny stock to buy in November 2021.

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3. PaySign (NYSE: PAYS)

PAYS is a penny stock and its market cap is only around $100 million. Headquartered in southern Nevada, PaySign creates customized, payment solutions for its clients that are spread across various industries. It mainly targets the healthcare, pharmaceutical, hospitality, and retail sectors. Plasma donation is the business segment of the company and it pays plasma donors with its gift cards.

In the third quarter, it reported total revenues of $7.8 million of which $7 million came from plasma. It posted an adjusted EBITDA of $1 million in the quarter. The company raised its gross margin guidance for 2021 to 49% which is ten percentage points higher than what it reported in 2020. Last year, the company’s business took a hit as plasma donation was tepid amid the COVID-19 pandemic. Apart from the closures of some plasma centers, there was less incentive to donate plasma for monetary purposes as people were getting generous stimulus cheques.

Wall Street is also bullish on this penny stock

PaySign had a total of 359 plasma centers at the end of September after it added three new centers in the quarter. Wall Street analysts are also bullish on PAYS stock and consensus estimates call for an upside of 79% from these levels. If you are looking for a penny stock that is a play in the reopening, PAYS looks like a good bet.

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4. CymaBay Therapeutics (NYSE: CBAY)

CymaBay Therapeutics is a clinical-stage biotech company. The stock has lost over a third of its market cap this year. However, Wall Street analysts seem bullish on the stock, and consensus estimates call for an upside of almost 200% over the next 12 months. All 10 analysts covering CBAY stock rate it as a buy or some equivalent.

CBAY is a good penny stock in the clinical-stage industry

Clinical stage companies are quite volatile and their outlook is dependent on the success of the therapies or medicines that they are developing. CBAY is working on therapies for liver diseases. Its lead candidate Seladelpar is in the phase three trials. Last week, the company announced a capital raise of $75 million through an issue of shares and warrants. It priced the shares at $4. Currently, the stock trades below the issue price. It is quite usual for clinical-stage companies to do frequent capital raises as they need the cash to fund their R&D.

That said, if you are looking for a penny stock in the clinical-stage biotech industry, CBAY looks like a good bet.

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5. IMV (NYSE: IMV)

Staying with clinical-stage biopharma companies only, IMV looks like another good bet. It is developing cancer immunotherapies and vaccines against infectious diseases. Its lead candidate is maveropepimut-S (DPX-Survivac) that is a T cell activating immunotherapy.

Wells Fargo finds IMV a penny stock worth betting on

Wells Fargo analyst Nick Abbott is bullish on IMV stock. H said, “We believe that IMV has a potential best-in-class vaccine platform, with upside potential as it broadens cancer vaccine maveropepimutS beyond diffuse large B cell lymphoma and beyond survivin as a target, with additional optionality in infectious disease.”

Abbott added, “We would be buyers of IMV following encouraging statements made on forthcoming bladder and MSI-high cohort basket trial data for maveropepimut-S (MVP-S) plus KEYTRUDA, which the company characterized as ‘very exciting’ and ‘intriguing’ respectively.”

Other analysts also share Abbott’s optimism and IMV has six buys and two hold ratings. The stock’s median target price of $5.78 is a premium of 227% over current prices.

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6. Sundial Growers (NYSE: SNDL)

Sundial Growers looks like another good penny stock to buy. The company is a cannabis play and has been a popular name on the Reddit group WallStreetBets. Sundial Growers released its third-quarter earnings earlier this month and reported cannabis revenues of CAD (Canadian dollars) 14.4 million in the quarter, which was 12% higher than the corresponding quarter in 2020. It posted an adjusted EBITDA of CAD 10.5 million.

SNDL has now announced a CAD 100 million share buyback. That might sound strange as the company is “returning cash” to shareholders in less than a year of the share issuance. Meanwhile, thanks to the stock issuance this year, SNDL is a cash-rich company.

SNDL is a penny stock in the cannabis industry

The cannabis industry has been out of favor with markets amid dwindling hopes of the federal legalization of marijuana. However, legalization hopes are not dead yet and Sen. Elizabeth Warren is among those who are backing the idea. She wants President Joe Biden to legalize marijuana through executive action.

That said, SNDL looks like a good penny stock in the cannabis industry. The stock should see better days ahead as it moves forward on the investing strategy. The core operations are also turning around which makes SNDL a penny stock worth watching.

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7. Electrameccanica Vehicles Corp. (NYSE: SOLO)

SOLO is a penny stock in the EV industry. The stock has looked weak in 2021 and is down over 45%. Meanwhile, we’ve seen some momentum building in EV names and Tesla’s market cap has soared above $1 trillion. Rivian’s IPO also saw a splendid response while Lucid Motors stock has also surged. SOLO has largely missed the rally in EV stocks.

Electrameccanica Vehicles is producing single-seater electric cars branded as SOLO. It is working to enhance the production capacity to 20,000 cars annually and the model is attractively priced at a base price of $18,500. It has also started accepting pre-orders for the next car eRoadster which sounds similar to Tesla’s Roadster. The company started delivering the cars last month and said that it has delivered 21 vehicles while producing 182 of these since the last year.

The company has over $228 million as cash on its balance sheet which would help it ramp up production. The Solo car looks like a good concept and if the company can successfully commercialize the vehicle, it could be a big boost to the stock.

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8. Ebang International Holdings (NYSE: EBON)

Ebang International Holdings is a penny blockchain technology company and looks like a good way to play the industry. The company provides application-specific integrated circuit (ASIC) chip design capability. Many feared that China’s crackdown on cryptocurrency mining in the country will take a toll on EBON. But the company issued a statement saying that the crackdown has no direct or immediate impact on its business.

EBON is a good penny stock in the blockchain industry

Ebang looks like a good penny stock in the blockchain industry. It released the results for the first six months of the fiscal year 2021 last month. The company generated revenues of $18.3 million over the period which were 65.7% higher than the corresponding period last year.

To complement its bitcoin mining machine business, it is also working on the FinTech business. In its earnings release, it said “The Company plans to gradually launch software-as-a-service (SaaS) businesses on some of its platforms, aiming to provide a full set of FinTech solutions to industry players who lack technical support and security.”

EBON stock has come off its 2021 highs and the crash looks like an opportunity to buy this penny stock. There has been a renewed interest in cryptocurrencies which bodes well for ancillary plays like EBON.

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9. Senseonics (NYSE: SENS)

Senseonics looks like another good penny stock to buy in November 2021. The company produces the Eversense CGM (continuous glucose monitoring) system which is an implantable device and could revolutionize the diabetic care market. The market for diabetic care is expanding fast. The CGM market is expected to rise at an annual pace of 12.7% between 2020 and 2027 according to Grand View Research. It forecasts the market to reach $10.4 billion by 2027.

SENS released its third-quarter earnings earlier this month and reported revenues of $3.5 million as compared to $0.8 million in the corresponding quarter last year. The company has adjusted its 2021 revenue guidance and expects its revenues to be at the middle of its range of $12-$15 million.

SENS is a good penny stock to play diabetic care

Currently, the Eversense CGM has to be implanted every 90 days. The company has applied with the FDA to increase the life to 180 days. If the FDA grants the approval, it will help lift SENS stock. Meanwhile, SENS stock has been under pressure as markets await the FDA decision. The increase in the implantable life would be a big boost for Eversense as it would lower the need for doctor visits.

Overall, SENS could be a multibagger if the company gets FDA approval. However, like all penny stocks, it is a risky play.

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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 ETF to invest in penny stocks

That said, active funds in general have a high expense ratio. With a YTD gain of 44%, the ETF is outperforming the broader markets by a wide margin. Currently, Calix Inc is the largest holding for DWMC followed by IDT. While DWMC is not a pure-play penny stock ETF, it does invest in small and micro-cap companies, many of which are 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 stock. It might therefore be prudent to have an expert fund manager take the investment call.

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