Investing in penny stocks does bring an element of nervousness. The stock price action can be unpredictable, particularly if we look at some purely speculative penny stocks. However, if we dive deeper into the sea of stocks, there are precious pearls, which I would prefer to classify as no-brainer penny stocks.
Typically, these penny stocks represent companies that have reasonable business fundamentals. The business operating track record indicates that exposure to these stocks is a risk worth considering. In the next few years, these penny stocks can upgrade to mid-cap stocks.
Amidst this bullish view, investors need to have a genuine investment horizon. It’s unlikely that we will soon witness the penny stock euphoria of 2021. Although the expectations on ROI need to be toned down, these no-brainer penny stocks will have multibagger potential over the next two to three years.
This post originally appeared at InvestorPlace.