The best nano-cap stocks to buy can represent straight-up gambles. Therefore, market participants unaccustomed to extreme volatility should get the heck out of Dodge. I mean it. These ideas align with wildly speculative ventures.
At the same time, curiosity always seems to hit us, especially with so few viable opportunities in the blue chips. Therefore, in this very limited context, I suppose the best nano-cap stocks to buy offer something for a broader audience. Still, you need to be extremely careful (like maybe talking to your significant other before taking the plunge).
Forget the positive implications of the marketing phrase best nano-cap stocks to buy now. These securities feature market capitalizations no greater, I repeat, no greater than $10 million. If you still think this isn’t that big of a risk for you, this article might be appropriate. Everyone else, please move on to the next story.
Cobra Venture (CBVTF)
Based in Vancouver, British Columbia, Cobra Venture (OTCMKTS:CBVTF) is an enterprise in the oil and gas development industry. Currently, Cobra carries a market cap of 2.83 million CAD (roughly translating to $2.12 million). On a year-to-date basis, CBVTF hemorrhaged nearly 50% of its equity value.
That’s a major risk factor considering the strong gains the hydrocarbon sector made. At the same time, it could offer speculators a chance to acquire an oil and gas play on the cheap. So, if you like to roll the dice, CBVTF might be one of the best nano-cap stocks to buy. Fortunately, technical speculation isn’t the only factor bolstering Cobra Venture. According to data from Gurufocus.com, Cobra features a surprisingly stout balance sheet. For one thing, the company has zero debt on its books. Another factor centers on its Altman Z-Score of 15.7, representing extremely low bankruptcy risk.
Therefore, if you’re going to gamble on the best nano-cap stocks to buy, a no-debt name makes plenty of sense.
McChip Resources (MCCHF)
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Founded in 1935, McChip Resources (OTCMKTS:MCCHF) is based in Toronto. Like Cobra above, McChip engages in the natural resource industry, specifically via petroleum interests. However, just like its peer, McChip hasn’t enjoyed much market success this year. Since the Jan. opener, MCCHF dropped 23% in equity value. Presently, shares trade hands for 52 cents.
Again, if you’re looking for the best nano-cap stocks to buy in the hydrocarbon space, McChip could give your portfolio a significant boost. With geopolitical flashpoints unlikely to end soon (and possibly poised to worsen) energy companies make sense. It’s cynical to be sure but let’s be real: the energy blackmail that’s going on is great for business.
Specific to McChip, Gurufocus.com mentions significant (and surprising) positives. For instance, the company enjoys a strong cash position, with a cash-to-debt ratio of 9.5 times (better than 75% of its peers). Also, the company enjoys above-industry-median revenue growth and net margins. Thus, it’s well worth considering for the best nano-cap stocks to buy.
Founded in 1990, Biorem (OTCMKTS:BIRMF) calls Ontario, Canada home. Per its website, Biorem produces engineered systems and products that solve problems across several industries. These include agriculture, landfills, and wastewater treatment facilities, among many others. Currently, Biorem commands a market cap of $9.54 million (per data from Gurufocus.com). Shares declined 23% YTD.
Fundamentally, Biorem represents a critical stagehand of the broader North American economy. While most folks don’t think about engineered systems for wastewater treatment, they will quite quickly if circumstances go awry.
Financially, Gurufocus.com notes that the company features a return on equity (ROE) of 22.8%. That ranks better than 90% of the competition. Also, its return on asset (ROA) is 7.6%, also above industry norms. Therefore, the company represents a high-quality business, something that you don’t find much of in the speculative arena. While BIRMF still carries risks, it’s one of the smarter plays among the best nano-cap stocks to buy.
Lifeloc Technologies (LCTC)
Lifeloc Technologies (OCTMKTS:LCTC) is a manufacturer of advanced breath alcohol testing devices. As well, the company provides workplace monitoring systems, facilitating greater safety and accountability. At the moment, Lifeloc carries a market cap of $8.19 million. Since the beginning of this year, LCTC gave up 28% of its equity value.
While it might seem incredibly speculative (and it is given its $3.24 share price at the time of writing) Lifeloc presents significant relevance. As people gradually return to the workplace, they may need to adjust to the return to normal. Therefore, Lifeloc can help enterprises spark this process safely and fairly.
As with some of the other best nano-cap stocks to buy, Lifeloc enjoys surprising resilience in the balance sheet. For instance, it features an equity-to-asset ratio of 0.75 times, above the industry median of 0.55. Also, the company’s Altman Z-Score is slightly above 4 points, reflecting low bankruptcy risk.
SunLink Health (SSY)
Founded in 1959, SunLink Health (NYSEAMERICAN:SSY) calls Atlanta, Georgia home. SunLink invests in healthcare facilities and related businesses located in the southeastern region of the U.S., per its website. At the moment, the company features a market cap of $5.91 million. Since the start of the year, SSY dropped 50% in equity value.
Notably, SSY represents the only name on this list of best nano-cap stocks to buy listed on an exchange. The other market ideas are traded over the counter. Fundamentally, SunLink may enjoy relevance because of its exposure to skilled nursing facilities. With baby boomers retiring en masse, SSY could be intriguing (from a speculative viewpoint).
Adding to the enticement, Gurufocus.com notes that SunLink enjoys a strong balance sheet. The company has a cash-to-debt ratio of 5.4 times, greater than nearly 74% of the industry. Also, SSY trades for only 0.33 times its tangible book. In contrast, the median metric for the industry is 3.17 times.
RIWI Corp. (RWCRF)
One of the more recently listed names among the best nano-cap stocks to buy, RIWI Corp. (OTCMKTS:RWCRF) was founded in Aug. 2009. It’s headquartered in Ontario, Canada. RIWI specializes in assessing accurate real-time human sentiment data in any country in the world. The platform allows businesses to better understand their target customers and thus facilitates improvements in predictive models and forecasts.
Currently, RIWI features a market cap of $10.42 million, per data from Gurufocus.com. Since the Jan. opener, RWCRF declined by nearly 50%. However, it’s possible that the volatility may have died down, presenting a tempting case for the best nano-cap stocks to buy. At the time of writing, shares trade hands for 58 cents a pop. Thus, traders must approach speculative ideas extremely carefully.
Nevertheless, RIWI features an unexpectedly strong balance sheet. For example, it features a cash-to-debt ratio of nearly 69 times, better than almost 80% of its peers. As well, the company enjoys better-than-sector-average revenue growth over the past three years.
Another relatively recently introduced market idea, Mastermind (OTCMKTS:MMND) was founded in 2012. The company hails from Atlanta, Georgia. Per its website, Mastermind operates a digital marketing agency. Its website features brands from some of the biggest blue chips in the world. Presently, the company commands a market cap of $8.62 million. Since the start of the year, MMND skyrocketed 127.5%.
That’s according to data from Google Finance. Notably, MMND’s average share volume pings at only 4,900. Needless to say, that’s an extremely low figure, representing high risk and high volatility. Further, with shares already jumping so much, it’s not for certain whether MMND still has legs. If it does, great. However, if not, you could be looking at substantial losses. So, caution is key.
If you do decide to venture into the wild side, Mastermind enjoys strong margins. For instance, its net margin stands at 18.6%, ranked better than nearly 89% of its rivals. Also, its ROE of nearly 39% reflects a very high-quality business. Finally, Mastermind also enjoys a stable balance sheet, making it a worthy name among the best nano-cap stocks to buy.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.