During the recent stock market crash, many stocks fell to the floor. Soon afterwards, the market rebounded and stocks are on their way to pre-crash levels. In times like this, investors need to be extremely cautious, especially when it comes to penny stocks. With enough due diligence, however, it is possible to pick up some bargains lying on the floor. Here are three penny stocks to watch in September 2015.
SouFun Holdings Ltd. (NYSE:SFUN)
SouFun Holdings Ltd. (NYSE:SFUN) is the leading real estate internet portal in China. The company provides marketing, e-commerce, listing, financing, and other value-added services to China’s real estate and home-related sectors. In 2014, it ranked No. 1 in the number of page views and visitors to its web sites and mobile apps among companies in the industry.
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More people in China have started using the internet for real estate and home-related services. As the trend continues, SouFun is enjoying solid growth. In the second quarter of 2015, the company’s total revenue surged 25.4% year-over-year to $210.9 million. (Source: SouFun, last accessed August 31, 2015.)
SouFun’s e-commerce business has been its fastest growing segment. In the first quarter of this year, revenue from e-commerce services increased 75.2% year-over-year to $51.5 million. In the second quarter, its e-commerce revenue surged 119.7% year-over-year to $106.8 million.
The company’s top line success did not translate that well to the bottom line. Due to the increase in cost of revenue and operating expenses, the company’s income declined. As a result, SouFun’s stock price declined as well. Right now the company’s shares trade at $5.50 apiece, significantly lower compared to the $10.01 high reached on June 12th. The drop in SouFun’s stock price could also come from the recent stock market crash in China.
Sibanye Gold Limited (NYSE:SBGL)
Sibanye Gold Limited (NYSE:SBGL) is a gold mining company based in South Africa. Currently, it owns and operates four underground and surface gold operations—the Cooke, Driefontein, and Kloof operations in the West Witwatersrand region, and the Beatrix Operation in the southern Free State province. Other than mining, Sibanye Gold also owns and manages significant extraction and processing facilities at the operations where gold-bearing ore is treated and processed before it is refined.
In the time of suppressed gold prices, many gold mining companies are suffering serious losses and cutting back on their production. Sibanye Gold, however, is not one of them. The company actually increased its production and turned profitable. (Source: Sibanye Gold, last accessed August 31, 2015.)
The company produced 713,900 ounces of gold in the second quarter of 2015, a 25% increase compared to the first. The company also cut costs: all-in sustaining cost was $1,054 per ounce in the second quarter, more than 15% lower compared to the $1,242 per ounce in the first. As a result, the company managed to have an operating profit of 1.62 billion South African rand ($122.03 million).
Sibanye Gold’s shares currently trade at $4.74 apiece, giving it a price to earnings (P/E) ratio of 10.01. Note that the company is also paying dividends, with a dividend yield of 4.99%.
First Majestic Silver Corp. (NYSE:AG)
First Majestic Silver Corp. (NYSE:AG) is a Canadian silver mining company. It operates in Mexico, one of the most mining-friendly countries.
The company owns five silver-producing mines and has two future projects. Despite the downfall of silver prices, First Majestic’s silver production increased. It expects production to be between 11.8 and 13.2 million ounces in 2015.
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During hard times like this, cutting costs is crucial. First Majestic has reduced its costs substantially: all-in sustaining cost was $14.49 per payable silver ounce in the second quarter of 2015, a 20% reduction compared to $18.18 per ounce in the second quarter of 2014. (Source: First Majestic Silver Corp., last accessed August 31, 2015.)
The company’s stock price dropped quite a bit as precious metals got crushed. Right now shares of First Majestic Silver Corp. trade at $3.46 apiece, losing almost two thirds in value since its 52-week high of $10.10. However, if silver prices were to bounce back, solid companies like this one will see big returns.
Also Read: Top Penny Stocks to Watch in 2015