Please ensure Javascript is enabled for purposes of website accessibility

Making Cents in Penny Stocks

By Rich Duprey - Updated Apr 5, 2017 at 8:00PM

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

Low-priced stocks can be cheap for a good reason, but they might also present some great, overlooked investment opportunities.

The occasional shower of pennies from heaven might do our bank accounts some good, but we Fools can't say the same for penny stocks. The world of penny stocks is often full of manipulation and deceit, so it's harder for investors to separate its few good offerings from the multitude best ignored.

Still, many investors dabble at the low end of the stock-price spectrum. At Motley Fool CAPS, we award the "Pennies" title to investors who rate stocks trading in the single digits more than half the time. Believe it or not, you'll find some of the best CAPS All-Stars among those members.

Pinching pennies
This week, we'll look at some of the low-priced investments these All-Stars have praised. If the best investors regularly scanning this end of the market have singled out these companies, we might want to turn our umbrellas upside-down -- or run for cover!

Here's the latest list of low-priced stocks with All-Star support:



CAPS Rating
(5 stars max.)

CAPS Member

Member Rating

Alvarion (NASDAQ:ALVR)










Brigham Exploration (NASDAQ:BEXP)





Quicksilver Resources (NYSE:KWK)





Corning (NYSE:GLW)





*Price when the outperform call was made.

Your two cents' worth
There has been something of a scratched lens at flat-panel screen maker Corning. Its upbeat predictions for growth despite production cuts at AU Optronics (NYSE:AUO) and LG Display (NYSE:LPL) finally caught up with the company, and management has essentially conceded defeat. There have been some encouraging signs of growth overseas, but Corning still expects to cut capital expenditures next year and possibly consolidate manufacturing capacity.

Yet Corning remains a prodigious generator of free cash flow, and conserving its cash at this time can serve to boost those numbers further. CAPS member RMFIII looks at management's business plan and thinks the LCD maker is too good to pass up:

With its Solid business plan and mgmt. that had to eat some crow lately, they now have [ingested] a large amount of humility so it is now time to buy. [Corning] is truly one of the real companies that is truly on SALE. With its low debt and PE excellent ROE and high net profit margin [this] is a no brainer.

Meanwhile, it was no doubt a welcome relief that MannKind was able to report recently positive results from phase 3 trials for its inhaled insulin formulation Afresa. Although there remains significant risk before it can be deemed a success -- the FDA still needs to get on board, for instance -- CAPS All-Star zzlangerhans finds there is enough going for it to believe the stock will respond favorably in the near term. In a pitch from mid-November:

I remain long-term negative on Mannkind due to the well-established problems with inhaled insulins. However, the product has solid efficacy data which at least positions it for a favorable review from the FDA. I expect the FDA to set safety standards for Technosphere which are virtually impossible to overcome in terms of time and resources. In the near-to-mid-term I'm positive at this price point.

Penny for your thoughts
What do you think? Should we fill up the change jar with these penny stocks, or ignore 'em like a discarded coin on the street? It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Consult our free CAPS investor-intelligence community, where your two cents count as much as anyone else's.

MannKind is a Motley Fool Hidden Gems Pay Dirt recommendation. Alvarion is a Rule Breakers selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool's disclosure policy always wins the coin toss.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Corning Incorporated Stock Quote
Corning Incorporated
$37.14 (0.92%) $0.34
MannKind Corporation Stock Quote
MannKind Corporation
$4.07 (-5.13%) $0.22
LG Display Stock Quote
LG Display
$6.38 (2.90%) $0.18
AU Optronics Corp. Stock Quote
AU Optronics Corp.
$6.71 (-3.59%) $0.25
Alvarion Ltd. Stock Quote
Alvarion Ltd.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.