It’s hard to believe, but the stock market has been on an incredible bull run since the Great Recession of 2008 and 2009. Even though stocks are no longer reaching fresh all-time highs, the price-to-earnings ratios of most S&P 500 businesses continue to appear rather costly historically. Many investors have difficulty locating low-priced stocks with solid business fundamentals and positive cash flow.
Stocks are now highly valued both in terms of their share price and their expected earnings. In more specific markets, the average S&P 500 business trades at approximately fifteen times earnings, and most stores are selling nearly 20 times their annual earnings multiple. While the stock market is more costly than in the past, there are still a few cheap stocks trading for less than $1.00 per share.
If you know where to search, you can find bargain investment opportunities. If you want to find the best stocks to buy for under a dollar, you’ll need to look at firms and industries that are smaller, riskier, and either unheard of or discounted by the market as a whole. Some of these cheap stocks may not seem appealing at first glance, but patient long-term investors who hold on to their shares through multiple economic cycles will ultimately be rewarded.
A remarkable year has passed for energy stocks. The sector was a famous wager moving into 2022, but the meteoric surge in oil prices (up more than 50 percent year-to-date) has added fuel to the already blazing energy stock market. Moreover, oil prices will probably remain elevated for the foreseeable future. The Energy Information Administration (EIA) said it expects volatility in oil prices to continue owing to several causes. These include decreased oil inventories, the severity of sanctions imposed on Russia, and any potential future sanctions.
A search for the most excellent penny stocks to purchase now is characterized by a single word: risk. Penny stocks are regarded as riskier than mid-capitalization or large-cap stocks. Penny stocks trade for less than $5 per share, but this article will focus on the finest penny oil stocks trading for less than $1.
Table of Contents
How Do Penny Stocks Work?
When investors discuss penny stocks, they typically refer to transactions that cost less than $ or $1 per share. Due to their low price, these penny stocks seldom exchange as many shares as their more expensive rivals.
These penny stocks are frequently associated with sporadic modest trading. They have ready-made buyers, but the market lacks trading liquidity. Therefore, investors may have difficulty selling the stock because the maximum number of buyers cannot purchase it.
Are Oil Penny Stocks Profitable?
It would help if you had all the intel you can acquire regarding oil penny stocks. And you should incorporate analyst information into your trading approach. Due to their volatility, it is crucial to continually be aware of the most recent oil penny stock news. Your trading approach for penny stocks could be advantageous in a high-risk trading environment. Consistent research will enable you to make better-informed trading decisions.
What are the Main Advantages of Investing in Oil Stocks Under $1?
These penny stocks are typically sold at reduced prices, and you may sell them for $5 for each penny share. This is a great investment opportunity for novice investors. There is no need to empty your wallet to learn how the stock market can work to your advantage.
They are considerably simpler to acquire. The general public has access to various companies that provide penny stocks for investing. It would help if you were cautious when selecting a trustworthy company that guarantees positive outcomes.
Due to their lower prices, penny stocks increase the likelihood of purchasing more. If you are hopeful about obtaining tremendous success with your investment in penny stocks, you may buy twice in the next phase. Investing in penny stocks is an enormous boon for novices who lack a firm grasp of the market’s fundamentals.
A low price would reduce the likelihood of sustaining significant losses, and this may be helpful for the first-time investor purchasing a penny stock. Nonetheless, investors must detect a few warning signs if a threat materializes to determine whether they should withdraw from or remain in the stock market.
Top 10 Oil Stocks Under $1 to Buy Now
1. Tetra Technologies (TTI)
First on this list of penny stocks is Tetra, due to its outstanding performance over the past year. The stock has gained almost 637 percent in the past year. However, TTI stock did decline significantly in late June. However, investors still have a year-to-date gain of nearly 300 percent (YTD).
Bullish investors should also take note of the stock’s substantial institutional buying. In the release of its first-quarter results, the company’s sales were down 42% year-over-year (YOY). The company must demonstrate to investors that it is beginning to build back its revenue.
Tetra operates as a provider of oil and gas services, and the corporation in Texas operates as two separate business entities. The oil and gas industry can make use of Completion Fluids & Goods’ clear brine fluids and other completion fluids, as well as related products and services. Water & Flowback, on the other hand, provides resources for water management services to onshore oil and gas companies.
2. Valero Energy
Valero Energy (VLO, $128.30) is an American oil refinery that produces and sells transportation fuels and other petrochemicals. The company’s refineries are spread throughout the United States, Canada, and the United Kingdom.
In addition, the company is the second-largest producer of renewable fuels, such as ethanol and diesel, giving it a tremendous opportunity to remain relevant and grow. Crack spreads and crude barrels going through Valero’s refineries generate substantial revenues.
The management of VLO anticipates robust product demand, especially in June compared to May, with higher gasoline, jet fuel, and diesel prices and tight supply.
“Closures have lowered net capacity by 2 million b/d, sanctions have curtailed 1 million b/d of Russia petroleum flows, and lower export quotas have impacted 500,000 b/d of China flows into the APAC Basin,” adds Leggate concerning the restricted fuel supply. “The conclusion confirms our belief that crude oil supply has migrated to refined goods and that there is no immediate cure.”
VLO is one of the finest energy stocks among refiners, thanks partly to its solid balance sheet and recent tilt toward increasing share repurchases.
3. Contango (MCF)
Like most penny stocks on this list, Contango stock has declined during the past month. One reason is the significant increase in MCF’s short interest over this period. MCF stock is up 69% in 2021, partly owing to the company’s announcement of its desire to acquire low-decline conventional gas properties from ConocoPhillips in the Wind River Basin.
The news that Contango will merge with Independence Energy LLC in a stock-for-stock transaction for $5.8 billion may also have played a role in the rise in price. KKR manages Independence Energy, a diversified upstream oil and gas company. The merged enterprise will generate roughly 105,000 barrels of oil and gas equivalents per day.
4. Phillips 66
Phillips 66 (PSX, 102.38) is a global energy firm that manufactures and distributes fuels. However, the Houston, Texas-based company is also active in the natural gas trade and supplies chemicals and specialty products to global markets.
This year, the energy company had some management changes, with the current president and CEO, Greg Garland, being promoted to executive chairman. Effective July 1, Mark Lashier, the current chief operating officer of Phillips 66, will succeed Garland in the top position.
After meeting with company management last month, Phil Gresh, a J.P. Morgan analyst, was comforted about PSX. PSX generated a healthy operational cash flow of $1.1 billion in the first quarter and distributed $404 million in dividends to its shareholders.
Gresh is optimistic that PSX will be able to generate solid mid-cycle free cash flows (FCF) – the money remaining after a firm has paid for the capital expenditures required to build its business – over the course of the next few years. He expects the current healthy refining environment to boost FCF, while marketing, midstream, and chemicals should all be nearing mid-cycle.
Exiting CEO Greg Garland repeated this sentiment in the company’s Q1 earnings press release. “Despite the fact that first-quarter results were lower than expected, we experienced a significant improvement in our financial results in March and anticipated continued solid performance in the second quarter,” Garland said. “We believe that the present market conditions will permit us to boost shareholder returns by resuming share repurchases and increasing the dividend. In April, we returned $1.45 billion in debt and intended to repay additional debts this year.”
Analyst Gresh notes that PSX is wary of “recession risk,” leading to management’s further determination to reduce its net debt. However, the company plans to continue distributing 40% of its operating cash flow (CFO) to shareholders.
5. Nextdecade (NEXT)
Nextdecade is the company I recommend if you’re looking for chances in the oil and gas sector related to renewable energy.
Somewhat, this company is a developer of liquefied natural gas (LNG); LNG is not a genuine renewable energy source. However, because of the relative simplicity of LNG production and its substantially reduced carbon emissions, this resource is viewed as a bridge between renewable energy and the future.
In particular, Nextdecade has two commercial divisions and concentrates its development efforts in two areas. In terms of LNG, NEXT oversees the operation of the Rio Grande LNG port in southern Texas and concentrates on carbon capture and storage (CCS) initiatives.
Following the trend of similar penny stocks, NEXT stock has declined approximately 11% during the past month. However, it was up about 75% YTD in 2021.
6. Histogen, Inc. (NASDAQ: HSTO)
The stock price of this experimental pharmaceutical company has fluctuated within a limited range for the past two weeks. To treat various diseases and ailments, for instance, they use the products of fibroblast cells that have been grown in an embryonic-like environment.
Typically, it costs between 70 cents to a dollar. It attracts traders due to its high level of volatility, and they keep a close check on it.
Due to the growing emphasis on viral medicines, HSTO inventories are anticipated to expand. Therefore, you should monitor them more closely and consider purchasing them in the future.
7. Vaalco Energy (EGY)
Vaalco Energy is a reminder that oil industry investments are not for the faint of heart. This is a Houston, Texas-based oil and gas exploration and production firm. Off the coast of West Africa, its drilling activities have been concentrated over the past few years. This could be a significant reason to consider purchasing EGY stock.
Why? It all comes down to regulation, or more particularly, to which countries will provide fewer environmental laws to access oil riches. Because certain African nations are still establishing their infrastructure and other similar aspects, the region could meet this description and serve as a powerful stimulus for EGY stock.
EGY stock has declined by more than 14% in the past month. Vaalco is up 58% YTD due to increased earnings and revenue. The company did not meet analysts’ forecasts for profits per share (EPS) of 20 cents in the most recent quarter. Nonetheless, the EPS of 17 cents was higher year-over-year. Vaalco also outperformed in terms of revenue.
Like many oil penny stocks, EGY is trading on a lesser volume. However, as a stock that has increased by over 141% in the past year, it is a name to keep an eye on.
8. Bonus Biogroup (OTC: BBIFX)
It is an Israeli biotechnology company founded in 1981 with headquarters in Haifa. They eventually chose to change their name to Oceana Advanced Industries Ltd.
BBIFX, which develops tissue-generating bone transplants utilizing cutting-edge technology, is one of the world’s most prestigious businesses.
Using bone tissue samples can potentially result in the creation of an identical bone. Various types of bone deficiency can be treated, including fractures, arthritis, jawbone cysts, and others.
9. Aemetis (AMTX)
If you are interested in narrative stocks, you may find the potential with Aemetis, the following company on this list of penny stocks, intriguing. This oil and gas refiner has a subsidiary developing a market niche for liquid and gel sanitizers. As expected, the epidemic has contributed to AMTX stock’s increase of approximately 1,100% over the past year.
Moreover, although hand sanitizer is no longer affected by supply-chain problems, its demand is unlikely to diminish. Aemetis just announced that it will hire Chevron’s (NYSE: CVX) former Environmental Technical Expert to lead its “Carbon Capture and Renewable Jet/Diesel Projects.” This news adds to the positive narrative and should interest investors who wish to guarantee that this is not a one-trick pony.
Currently, AMTX stock is significantly oversold. Consequently, investors should be wary of the short interest in AMTX, which now stands at approximately 17%. This was a significant factor in the stock’s rise to above $20 earlier this year.
10. Inuvo (NYSE: INUV)
This company’s stock is low and secure, and its balance sheet demonstrates positive results, making it even more reliable. Thanks to Inuvo, there is a requirement for commercial explanations based on artificial intelligence.
It trades for less than $1 per share and regularly fluctuates between $0.60 and $1 per share.
Anyone can target and engage with potential clients via various platforms and channels with their assistance. In addition, they supply eCommerce businesses with customized media and display advertising solutions, boosting their chances of skyrocketing success.
This stock’s price decline from $2 to $0.70 illustrates the risks and potential rewards of investing in it. It all depends on how you trade and your outlook on the company’s future—the greater your willingness to lose, the greater your potential earnings.
The Volatility of Oil Stocks
Oil stocks can be volatile due to weather and foreign countries. In addition, geopolitics, terrorism, and numerous other factors influence oil prices and, by extension, stocks in the oil sector, often known as the energy sector. As a result, we go out of our way to help our users protect their brokerage accounts. In this profession, there’s much money to be completed and lost. It is crucial to understand how to trade oil stocks securely.
Final Thoughts
On the other hand, oil penny stocks are viewed as a risky investment. On the other hand, you may gain some practical benefits from it. Numerous outstanding stocks are available for novice investors to begin their successful financial journey. Be cautious, research, and make a sound investment judgment before investing.
