The top three penny stocks are not your typical penny stocks. They are not thinly-traded over-the-counter stocks trying to eke out an existence in a niche nobody cares about. These three penny stocks all trade on major indices; have strong fundamentals and business plans; solid volume; and tremendous long-term growth potential.
With the markets trading near record highs and being generally viewed as seriously overvalued, these three penny stocks might be a breath of fresh air. Accordingly, they give investors a real reason to be bullish.
Top 3 Penny Stocks for July
1. Cowen Group, Inc. (NASDAQ/COWN)
It’s not just the big banks that are making money. Cowen Group, Inc. (NASDAQ/COWN) is a diversified financial services firm and, together with its consolidated subsidiaries, offers alternative investment management, research, investment banking, and sales and trading services.
Its Ramius’ arm, with roughly $8.0 billion of assets under management, handles alternative investments, while another subsidiary, Cowen and Company, represents the firm’s investment banking and brokerage practice.
On April 30, Cowen Group reported its financial results for the first quarter ended March 31, 2015. The company announced that net income increased 70% year-over-year to $16.7 million or $0.14 per diluted common share compared to $9.8 million or $0.08 per diluted common share in the prior year period. First-quarter 2015 revenue rose 46% year-over-year to $161.7 million from $110.6 million in the prior year. (Source: Cowen Group, Inc., April 30, 2015.)
As of April 1, 2015, assets under management (AUM) were at $12.8 billion, an increase of $362 million from the start of the year.
During the first quarter, the company repurchased 1.4 million shares for $7.2 million under its existing $86.0 million share repurchase program. $17.8 million remained available for future repurchase as of March 31, 2015.
Currently trading near $6.25 per share, Cowen Group’s share price is up 28.7% since the beginning of the year—up 44.2% year-over-year.
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Also Read: Top Penny Stocks to Watch in 2015
2. Five Star Quality Care Inc. (NYSE/FVE)
Baby Boomers are retiring at a rate of 10,000 per day and they’re going to need somewhere to live. With operations in 32 states, Five Star Quality Care Inc. (NYSE/FVE) runs more than 260 senior living facilities. In 2013, the company sold its two rehabilitation hospitals, as well as more than a dozen affiliated rehabilitation clinics.
On May 1st, Five Star announced that first-quarter revenue increased slightly (1.7%) to $334.0 million from $328.4 million for the same period in 2014. Adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) increased 14% year over year to $59.3 million. (Source: Five Star Quality Care, Inc., May 1, 2015.)
Net loss for the first quarter of 2015 was $5.3 million, or $0.11 per share, compared to a loss of $6.8 million, or $0.14 per share, for the same period in 2014.
Since January 1, 2015, Five Star has agreed to acquire two senior living communities with a combined 152 living units and began, or expects to begin, managing 15 senior living communities for Senior Housing Properties Trust, or SNH. Trading near $4.80 per share, Five Star is up 15% year-to-date.
Also Read: Top 9 Oil and Gas Penny Stocks for 2015
3. Zix Corporation (NASDAQ/ZIXI)
Zix Corporation (NASDAQ/ZIXI) wants to zap it. The company offers industry-leading e-mail encryption, data loss prevention, and transmission services. Its technology allows users to send encrypted e-mail and documents to any address in the world; recipients who are not service subscribers can access the messages through the company’s Web-based portal.
Zix targets customers in the healthcare, financial services, insurance, and government sectors. Moreover, it has an e-mail encryption community with tens of millions of members, growing by 100,000 members per week.
On May 21, Zix announced its financial results for the first quarter ended March 31, 2015. First-quarter revenue increased 7.5% year-over-year to $13.1 million. Net income for the period was up 11% at $1.2 million, or $0.02 per share. (Source: Zix Corporation, May 21, 2015.)
For the second quarter of 2015, the company forecasts revenue to be between $13.2 million and $13.4 million with fully diluted adjusted earnings per share of $0.04. In the second quarter of 2014, the company reported revenue of $12.6 million and earnings per share of $0.02.
For full-year 2015, the company reaffirms previously issued revenue guidance of $54.0 million to $56.0 million. In fiscal 2014, Zix reported revenue of $50.3 million.
On May 12, the company announced a $15.0 million share repurchase plan; the short-term purchase plan is scheduled to expire on Oct. 31, 2015. The $10.0 million share repurchase program announced in January is being terminated and replaced by this new $15.0 million share repurchase program. (Source: Zixcorp.com, May 12, 2015.)
Trading near $5.28 per share, Zix’s share price is up roughly 32% since the beginning of the year and roughly 15% since the beginning of June. It didn’t hurt that the U.S. was recently the target of the largest security breach of federal employee data. This goes to show how important encrypted information is. (Source: nytimes.com, June 4, 2015.)