While they come with their own set of risks, penny stocks are often viewed by some investors as a quick and cheap way to earn some profit in the stock markets.
One major reason behind this perspective is that, unlike blue-chip stocks, penny stocks are low-priced and can provide profit in the short run.
Let us talk about two Canadian penny stocks and their performances - Petrus Resources Ltd (TSX:PRQ) and GoldQuest Mining Corp (TSXV:GQC).
Petrus Resources Ltd (TSX:PRQ)
Petrus Resources Ltd is a Calgary-based oil and natural gas firm that presently has market capitalisation of over C$ 123 million.
The energy firm posted an oil and gas revenue of C$ 20.3 million in the third quarter of FY2021, which was up from C$ 12.84 million a year ago.
The firm also earned a net income of C$ 7.34 million in the latest quarter, as against a net loss of C$ 3.67 million in Q3 2020.
Stocks of Petrus Resources closed at C$ 1.28 apiece on Friday, January 21, having galloped by about 374 per cent in the last one year.
GoldQuest Mining Corp (TSXV: GQC)
GoldQuest Mining Corp is a junior resource exploration company that operates mineral projects in the Dominican Republic.
GoldQuest incurred a net loss of C$ 0.399 million in the second quarter of fiscal 2021, as compared to a loss of C$ 0.616 million in the previous quarter of FY2021.
However, the Vancouver-based mining company saw its stock rocket by almost 131 per cent month-to-date, having closed at a value of C$ 0.3 apiece on Friday, January 21.
While some penny stocks can fetch significant returns in the short term, they known to be highly volatile in nature to the changing market situations.
Due to such risk factors, investors should ideally be aware of the ongoing trends, market dynamics and identify the companies’ return capabilities based on their operations and financials.