Every time I discuss extremely speculative ideas, I provide warnings.  However, penny stocks for under 10 cents truly takes the cake. You need to be extremely responsible and disciplined and use only the speculation portion of your portfolio. Even then, you might be out of your mind if you’re considering exposing yourself to this sector. More than likely, you will burn your money in the garbage. At the same time, a sliver of an opportunity exists that penny stocks for under 10 cents can shoot higher. This article is for the true believers.

Nevertheless, don’t take this write-up as an endorsement, because it’s not. All these ideas trade over the counter and all suffer from low trading volume. This means – in part – that even if you become profitable on paper, you might not find someone to profit from. If you can handle such extreme volatility, below are seven penny stocks for under 10 cents.

CGN Mining (CGNMF)

Based in Hong Kong, CGN Mining (OTCMKTS:CGNMF) is an investment holding company. Specifically, it engages in the trading of natural uranium and property investment. Currently, CGN commands a market capitalization of 6.23 billion HKD (translating to roughly $799 million). As far as penny stocks for under 10 cents goes, that’s a legitimate valuation.

Still, prospective speculators must exercise extreme caution. Trading at 9.8 cents at the moment, shares slipped about 11% on a year-to-date basis. On the surface level, this doesn’t sound bad. However, the security ping-pongs violently, affording little predictability. Also, its average share volume is only 603 – yes, you read that right. Fundamentally, though, uranium provides much relevance given the global energy crisis so there’s that. Based on Gurufocus.com’s proprietary calculations for fair market value (FMV), CGNMF may be modestly undervalued. I’m not going to put too much emphasis on this attribute because the investment resource also notes six red flags. This includes most problematically the issuance of new debt. Still, it’s just barely one of the penny stocks for under 10 cents if you’re interested (I’m not).

Horizon Oil (HZNFF)

Headquartered in New South Wales, Australia, Horizon Oil (OTCMKTS:HZNFF) specializes in the upstream component of the oil and gas business. This segment primarily involves energy exploration and production, which then flows (midstream) down the value chain until it reaches the end user (downstream). Presently, Horizon features a market cap of 216.2 million AUD (or about $147 million).

To qualify for this list of penny stocks for under 10 cents, HZNFF barely made it at 9.1 cents. From the January opener, HZNFF popped up over 29%. Fundamentally, Russia cutting off hydrocarbon supplies in response to the angry global response to its invasion of Ukraine contributed to sector upside. Moving forward, full normalization sparking enhanced mobility demands may bolster HZNFF. Interestingly, Horizon Oil features financials that aren’t too shabby for penny stocks for under 10 cents. As an example, the company carries a massive cash-to-debt ratio of 37.5 times, beating out over 80% of the competition. Still, it’s a low-volume stock so be extremely careful.

China Rare Earth (CREQF)

Based in Hong Kong, China Rare Earth (OTCMKTS:CREQF) is an investment holding company engaged in the manufacture and sales of rare earth and refractory products. Currently, China Rare Earth commands a market cap of 1.22 billion HKD (or roughly $156 million using the present exchange rate). Since the start of this year, CREQF dropped more than 58% in equity value.

Of course, the company’s namesake specialty offers substantial forward-looking relevancies. As other publications pointed out, the U.S. needs a gargantuan supply of rare earth metals to support the Biden administration’s go-green initiatives which in part cover electric vehicles. Therefore, speculators may be eyeballing wildly risky ideas such as CREQF for potentially life-changing profitability.

It’s a long shot. Still, if you want to gamble, Gurufocus.com notes that against its FMV calculations, CREQF rates as significantly undervalued. As well, the company enjoys strong stability in the balance sheet. For instance, its Altman Z-Score pings at 5.75, reflecting low bankruptcy risk.

Playmates Toys (PMTYF)

Another Hong Kong-based enterprise, Playmates Toys (OTCMKTS:PMTYF) is a toy manufacturing company. Based on its website, the company features toys under popular brands such as Star Trek, Toho (think Godzilla), and Teenage Mutant Ninja Turtles. Normally, I wouldn’t care so much about toy companies. However, the branding partnerships do make the entity intriguing.

Still, one must be super careful with PMTFY. At the moment, the underlying company carries a market cap of 719.8 million HKD (or $92.3 million). Further, shares presently trade hands at 7 cents. Interestingly, though, PMTYF gained nearly 16% of its equity value since the start of the year. However, similar to other penny stocks for under 10 cents, the trading pattern resembles a seismometer during an earthquake.

If you still want to play with Playmates, the company surprisingly offers resilient financials. For example, its cash-to-debt ratio stands at 53.7 times, blowing past nearly 89% of the competition. Also, PMTYF’s Shiller price-earnings ratio is only 7 times. In contrast, the sector median is 23 times.

PT Ace Hardware Indonesia (ACEHF)

Headquartered in Jakarta, Indonesia, PT Ace Hardware Indonesia (OTCMKTS:ACEHF) engages in the retail of household appliances and lifestyle products in the namesake country. Presently, PT Ace features a market cap of 8.58 trillion IDR, approximately $549 million). Since the January opener, ACEHF finds itself down almost 75%, making it one of the riskier names among penny stocks for under 10 cents.

Anybody hoping to make a profit out of ACEHF is in for a rough time. In the trailing month, shares dropped a staggering 45%. In addition, the bid-ask spread on this bad boy will likely be oppressive should you decide to pull the trigger. Featuring an average trading volume of only 5,360 shares, even if you win, you might not win. You’re still going to need someone to dump shares off to.

Still, let’s give credit where it’s due. PT Ace enjoys an excellent balance sheet, featuring a cash-to-debt ratio of 2.5 times. This exceeds nearly 78% of the competition. Also, the company benefits from strong profit margins. Lastly, Gurufocus.com’s proprietary FMV calculations suggest that ACEHF is significantly undervalued.

SDX Energy (SDXEF)

Based in the U.K., SDX Energy (OTCMKTS:SDXEF) focuses on hydrocarbon exploration. Specifically, it emphasizes its accretive oil and gas projects in North Africa. At the moment, the company commands a market cap of 18.51 million GBP or approximately $22.4 million. Since the beginning of the year, SDXEF dropped over 33% in equity value, raising questions for onlookers. Essentially, penny stocks for under 10 cents represent a crapshoot. Even if the sector enjoys substantial relevance, internal problems can derail the investment proposition. With SDXEF – I must disclose trades for 10 cents at the time of writing, the risks are incredible. As an example, the average trading volume sits at only 2,000 shares.

Nevertheless, the exploration angle can attract market daredevils. As well, the company enjoys a solid balance sheet, backed by a cash-to-debt ratio of 2.2 times. Also, its gross margin stands at nearly 65%. This implies greater flexibility in terms of economies of scale.

Metro Pacific Investments (MPCFF)

Operating out of the Philippines, Metro Pacific Investments (OTCMKTS:MPCFF), through its subsidiaries provides water, sanitation and sewerage services. It also operates in real estate and infrastructure projects. Currently, Metro Pacific features a market cap of $2.42 billion, per Yahoo Finance. Since the Jan. opener, MPCFF dropped almost 35% of equity value.

Though the infrastructure angle might be appealing to some speculators, you should make no mistake about it: MPCFF represents one of the most treacherous ideas for penny stocks for under 10 cents. Presently, it features a price tag of 6.5 cents. Average trading volume stands at 12,500 shares, which isn’t bad as far as high-risk investments are concerned. Still, trading patterns present a wild profile so far.

Frankly, those who want to venture into Metro Pacific should treat it as a poker game. Per Gurufocus.com, MPCFF represents a possible value trap. Most worryingly, the investment resource identified six red flags for the business, including issuance of new debt.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks. 

Read More: Penny Stocks — How to Profit Without Getting Scammed 

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.