2 penny stocks to watch in 2021

Penny stocks can be incredibly risky. But sometimes the reward is worth the risk. Zaven Boyrazian shares two he’s watching now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Penny stocks have always been quite an alluring group on the stock market. Admittedly, they probably include the highest concentration of bad investments than any other type of stock. But occasionally, a gem emerges and offers investors the opportunity to make some lucrative returns. In fact, among the penny stocks is where I discovered Oxford Biomedica in October 2016. It has since risen by over 770%!

Recently I’ve stumbled across two more very young but potentially explosive penny stocks that I’m keeping a close eye on. Let’s take a look.

A new fuel standard for cargo ships?

As the world starts to ramp up its efforts to slow and eventually reverse climate change, new solutions are being employed to cut carbon emissions. Renewable technologies like wind turbines, solar panels, and batteries are becoming widespread throughout the energy sector. Meanwhile, electric cars are on the road to being the new standard vehicle type within the next decade.

Unfortunately, the ocean-bound transportation industry has yet to see any such technological shift. Currently, cargo ships account for around 3% of global emissions. That may not seem like much, but it roughly equates to 1.09bn tonnes of carbon dioxide every year. And to make matters worse, this figure is expected to increase by up to 250% by 2050.

That’s why Quadrise Fuels (LSE:QFI) has piqued my interest. This early-stage (and I mean very early stage) penny stock has created a new fuel called bioMSAR. It is lighter, cheaper, and more efficient than traditional cargo ship fuel. And best of all, the carbon emissions are approximately 30% lower.

As promising as this alternative fuel may be, there remains a long road ahead. BioMSAR is still in its testing phase, albeit testing is running at an accelerated pace. The next set of testing results is expected to arrive this month. I’m eagerly waiting to see how it turns out. But for now, Quadrise is staying on my watchlist.

The Quadrise Fuels penny stock has a lot of risk

 A rising penny stock in the cannabis sector?

The legal marijuana industry is still firmly within its infancy in the western world. Yet its rapid adoption, especially in the medical sector, has led to the market size growing by double-digit percentages. According to Grand View Research, the industry is forecast to grow by 26.7% each year until 2028.

That’s why Kanabo (LSE:KNB) has become an interesting company for me to follow. It develops and manufactures a collection of cannabidiol-based products designed for health & wellness applications. These products are used in combination with its hopefully-soon-to-be certified inhalation device called VapePod MD. I say hopefully because it remains entirely possible for the application to be rejected by regulators.

However, assuming its medical device receives approval, this penny stock may be on the verge of launching an incredibly lucrative ‘razor and blade’ type of business model. And with its production and disruption infrastructure now in place thanks to recent partnerships, the Kanabo share price looks like it’s almost ready to start surging.

But, just like Quadrise, Kanabo has yet to begin generating any substantial revenue. And so, once again, it remains quite a speculative investment with plenty of risks. And there are regulatory challenges that are likely to arise in the future, given the controversial nature of cannabis use. Therefore it’s another penny stock that’s staying on my watchlist for now.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Zaven Boyrazian owns shares of Oxford Biomedica. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

The National Grid share price nosedived 21% in 2 days! Is it time to take advantage?

The National Grid share price tumbled after the company surprised shareholders by revealing plans to raise more money via a…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Dividend Shares

How I’d try to ironclad my second income before interest rates fall

Jon Smith explains a couple of tactics he's looking to implement in his dividend portfolio to try and protect his…

Read more »

Investing Articles

The FTSE 100 still looks cheap to me. But don’t just take my word for it!

The FTSE 100 (INDEXFTSE:UKX) has increased 7.5% since the start of 2024. But I think there’s evidence to suggest that…

Read more »

Investing Articles

What should the Vodafone share price be? Here are 3 possible answers

Our writer uses a number of popular financial measures to come up with an estimate of a fair value for…

Read more »

Investing Articles

Here’s how much I’d have if I’d bought 1,000 shares in this FTSE 100 defence stock 5 years ago

I could have made a pretty penny investing in this leading FTSE 100 defence stock. Now I’m looking at a…

Read more »

Investing Articles

1 potential millionaire-maker UK stock I’d like to buy for the long haul

For long-term investors, here’s 1 UK stock to consider buying right now with the potential to help power a growth…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

These cheap UK shares look way too good to ignore right now

With the UK stock market reaching new highs recently, this Fool plans to grab these two remaining cheap shares before…

Read more »

Young Woman Drives Car With Dog in Back Seat
Investing Articles

This unloved UK stock could rise 120%, according to a City broker

Some City analysts reckon a once-popular UK stock can recover from its massive recent decline and go on to more…

Read more »