The technology sector consists of businesses that develop, build, and market consumer electronics, electronic components, and software. Companies in the tech sector may also provide information technology (IT) services such as cloud computing. While the best-known companies are giants like Apple Inc. (AAPL) and Microsoft Inc. (MSFT), there also are tech businesses that are classified as penny stocks. Penny stocks typically trade at $5 per share or less. Some examples are Support.com Inc. (SPRT), an online customer service platform; and immunotherapy developer Advaxis Inc. (ADXS). Investing in penny stocks can be especially risky and may entail higher trading costs. Investors should therefore be careful when considering whether to invest in these or similar securities.
There is no widely-used benchmark for tech penny stocks, and their performance has varied significantly over the past 12 months. However, the Invesco S&P SmallCap Info Tech ETF (PSCT) provides a general indicator for tech penny stocks. PSCT has outperformed the broader market in the past year, providing a 1-year trailing total return of 25.7% compared with 23.2% for the Russell 1000, as of December 4, 2020. All numbers below are as of December 7, 2020.
Here are the top 3 tech penny stocks with the best value, the fastest growth, and the most momentum, respectively.
Best Value Tech Penny Stocks
These are the tech penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For young companies that have not reached profitability, this can provide an idea of how much business you’re getting for each dollar invested.
|Best Value Tech Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/S Ratio|
|Exela Technologies Inc. ( XELA )||0.38||56.5||0.0|
Conduent Inc. (CNDT)
|9F Inc. ( JFU )||1.59||310.4||0.7|
- Exela Technologies Inc.: Exela Technologies is a global business process automation company. It offers work flow automation, digital mail rooms, print communications, payment processing, and more. The company reported a net loss of $28.3 million as revenue fell 18.3% in Q3 2020, which ended September 30, 2020. The net loss was still an improvement from the net loss of $131.3 million in the year-ago quarter. Exela said that it experienced reduced customer volumes in certain business segments due to the COVID-19 pandemic.
- Conduent Inc.: Conduent is a business process services company specializing in transaction-intensive processing, analytics, and automation. The company reported a net loss of $7 million in Q3 2020, ended September 30, 2020, compared to a net loss of $16 million in the quarter a year ago. Revenue for the quarter fell 5.2%. Conduent said that the pandemic negatively affected its results.
- 9F Inc.: 9F is a China-based provider of IT services. It provides a digital financial accounting platform for integrating and personalizing solutions. The company also offers an online shopping platform.
Fastest Growing Tech Penny Stocks
These are the tech penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales show that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.
|Fastest Growing Tech Penny Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|Resonant Inc. ( RESN )||2.19||118.7||1,680|
|Ideanomics Inc. ( IDEX )||2.02||534.9||242.1|
|Peak Fintech Group Inc. (PKK.CX)||CA$1.49||CA$144.5||235.9|
- Resonant Inc.: Resonant produces filter designs for radio frequency (RF) front-ends for the mobile device industry. Its products are used in the configuration of resonators, which are used to select RF signals and reject unwanted signals.
- Ideanomics Inc.: Ideanomics operates as a financial technology (fintech) company that specializes in facilitating the adoption of commercial electric vehicles and developing financial services and fintech products. The company announced in the first half of November that it has agreed to acquire Timios Holdings Corp., a real estate title and settlement solutions provider. The financial terms of the deal were not disclosed.
- Peak Fintech Group Inc.: Peak Fintech Group is a Canada-based provider of financial software solutions. It provides an ecosystem that automates the process for lenders to find borrowers, allowing banks and other lenders to safely increase loan volumes.
Tech Penny Stocks with the Most Momentum
These are the tech penny stocks that had the highest total return over the last 12 months.
|Tech Penny Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|SunHydrogen Inc. ( HYSR )||0.06||142.5||1,370|
|Loop Insights Inc. (MTRX.V)||CA$1.43||CA$152.5||853.3|
|Waitr Holdings Inc. ( WTRH )||3.55||394.0||588.1|
|S&P SmallCap Info Tech ETF (PSCT)||N/A||N/A||25.7|
- SunHydrogen Inc.: SunHydrogen, formerly known as HyperSolar, provides renewable energy services. The company is developing a system to produce renewable hydrogen using sunlight and water.
- Loop Insights Inc.: Loop Insights is a Canada-based provider of technology solutions, offering digital advertising, marketing, research, and other related activities for retailers.
- Waitr Holdings Inc.: Waitr Holdings operates an online food ordering and delivery platform that connects local restaurants to customers in the southeast U.S. Despite the negative impacts of the COVID-19 pandemic and regional hurricanes, the company reported net income of $4.6 million as revenue rose 7.2% in Q3 2020, which ended September 30, 2020. Waitr achieved this partly by diversifying its product offerings beyond food delivery. The net income was a significant improvement from the net loss of $220.1 million posted in the year-ago quarter. It also marked a second consecutive quarter of profitability for the company.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." Accessed Dec. 7, 2020.
Exela Technologies Inc. "Exela Technologies, Inc. Reports Third Quarter 2020 Results." Accessed Dec. 7, 2020.
Conduent Inc. "Conduent Progress Continues with Strong Third Quarter 2020 Financial Results and New Business Signings," Pages 1 & 3. Accessed Dec. 7, 2020.
Ideanomics Inc. "Ideanomics Announces Definitive Agreement to Acquire Timios Holdings Corp." Accessed Dec. 7, 2020.
Waitr Holdings Inc. "Waitr Reports Third Quarter 2020 Results." Accessed Dec. 7, 2020.