Before entertaining the discussion of the top penny stocks to watch, it is imperative to emphasize that this market arena requires caution before investing.

It looks as if 2023 could be a prosperous year for stocks. Market analysts have identified two categories of stocks best positioned to perform well: value stocks and reasonably priced stocks with company-specific catalysts. That’s why we’re considering the best penny stocks to watch.

In 2022, value stocks rose in a higher interest rate environment when the Federal Reserve increased rates. With this trend likely to continue in 2023, value stocks will remain attractive investments.

Additionally, companies that are reasonably priced can experience a big jump in profitability despite a struggling economy. This makes these penny stocks to watch look all the more attractive.

BTG	B2Gold	$4.14
UEC	Uranium Energy	$2.69
AMWL	American Well	$2.24
SLDP	Solid Power	$2.70
SGHC	SGHC Limited	$3.74
TLRY	Tilray Brands	$2.58
POWW	Ammo Inc.	$1.99

B2Gold (BTG)

B2Gold (NYSEAMERICAN:BTG) is a leading precious metals mining firm based in Canada. It’s also one of the best penny stocks to watch.

It owns and operates multiple gold mines in the Philippines, Namibia, and Mali. The recent volatility in the stock market hasn’t acted too kindly on BTG.

The firm reported solid gold production in the fourth quarter totaling 367,870 oz, helped by the superb performance at its Fekola mine in Mali.

Consolidated gold sales should speed past $592 million, a 12.5% bump from the fourth quarter of last year. Its average realized gold price of $1,746/oz is virtually in line with the $1,800/oz price it generated in its fourth quarter last year.

The firm expects to continue its rock-solid operational performance, with gold production forecast at 1 million to 1.08 million/oz this year, likely surpassing its 2022 performance totaling 1.03 million. This is one of the penny stocks to jump on while you can.

Uranium Energy (UEC)

Texas-based Uranium Energy (NYSEAMERICAN:UEC) operates one of the largest and most diversified uranium mining businesses.

As per its website, it boasts two production-ready mining uranium projects operational in the U.S. and high-grade projects in Canada. It has been an outlier among penny stocks, with its shares gaining more than 17% in the past year.

Though a pre-revenue firm, its biggest strength lies in its rock-solid balance sheet, which features virtually zero debt, and the firm enjoys amazing flexibility in these uncertain times. Perhaps more important to its long-term bull case is the colossal growth expected in the uranium energy space.

CEO of Sprott Asset Management, John Ciampaglia, states that the world’s fleet of reactors require roughly 180 million pounds of uranium annually.

The output produced last year was around 130 million pounds and should to rise to 140 million and 145 million pounds this year. With the massive shortfall in the current output and the worldwide requirement, expect a major surge in the uranium energy market.

American Well (AMWL)

American Well (NYSE:AMWL) has been a leader in the telemedicine industry, setting a high standard for online healthcare.

After plummeting with the rest of the markets in 2022, the firm is looking to claw back to winning ways. Since the January opener, AMWL stock is up over 27%, pointing to more success ahead.

Despite the turbulence experienced during the pandemic, the firm’s balance sheet remains in excellent shape. Its stellar cash-to-debt ratio of roughly 36.5 times evidences its robust liquidity.

It remains undervalued, trading at just 3.6 times forward sales estimates. Also, even though the hedge fund trend has been in the negative in the past quarter, it has improved substantially from the better part of last year.

From a fundamentals perspective, the firm’s revenue growth numbers have been mighty impressive, registering over 23% growth in the past five years. Year-over-year revenue growth is at 12.6%, which is remarkable considering its operating in the post-pandemic world.

Solid Power (SLDP)

Shares of Solid Power (NASDAQ:SLDP) were in an uptrend last month, gaining almost 30%. Given the positive developments with the battery company, I expect this to be one of the penny stocks to continue gaining big this year.

Solid Power has become an interesting figure in the emerging market for solid-state batteries. Its strategic partnerships with automotive powerhouses such as Ford and BMW are likely to speed up the process towards commercialization of its cutting-edge batteries.

Most recently, it deepened its relationship with BMW by accelerating its research and development activity. Hence, with these giants at its back, Solid Power will surely bring its ground-breaking technology out of the lab and into consumer markets more efficiently.

It recently started its pilot EV cells line last year, which will be delivered for validation testing to its automotive partners in 2023. These results could potentially spur another uptrend in its stock later this year.

SGHC Limited (SGHC)

SGHC Limited (NYSE:SGHC) saw its stock price take a massive beating last year in line with the rest of the sports betting market. In the past month, the stock picked up the pace rising over 25%.

SGHC operates profitable sports betting platforms under its Betway brand. Though its revenue base grew by single-digit margins, it is far from being as eye-catching as its profitability profile. The company’s gross profit and net income margins have soared over the 55% and 19.4% marks, respectively.

The enterprise continues to grow its business by adding new startups, such as a U.K.-based site called Jumpman and another tech gaming operator recently.

The company announced an enticing $25 million share buyback, much to the glee of its stockholders. As it continues to expand its growth runway, I expect SGHC stock to continue being a force to be reckoned with in the sports betting space.

Tilray Brands (TLRY)

Tilray Brands (NASDAQ:TLRY) is a deeply undervalued cannabis stock, trading at under three times forward sales estimates, roughly 35% lower than the sector average.

Besides the deplorable stock picture, there’s a lot to like about Tilray, particularly its financial performance of late. In its most recent quarter, it reported a positive adjusted EBITDA and a positive free cash flow figure. Finally, it wrapped up its second quarter with a whopping $433.5 million in cash equivalents, positioning it for aggressive organic and inorganic expansion ahead.

Furthermore, it recently acquired two brewing businesses in the U.S. to further its efforts to build a strong strategic footprint in the country. Also, it boasts a solid presence in the medicinal cannabis space, which boosts its position in the European market.

With TLRY stock down 51% over the past 12 months, it remains an excellent stock to watch.

Ammo Inc. (POWW)

Ammo Inc. (NASDAQ:POWW) is one of the most popular ammunition companies, producing in-demand products from its retail and government end users, including military personnel and law enforcement.

It owns one of the most popular gun auction sites called GunBroker.com, which has over 3.5 million users and attracts six million unique visitors each month on its website.

In the fiscal year ending March 2020, the firm generated a remarkable $14.1 million in revenues. On the flipside, in the last fiscal year, it reported an amazing $225.6 million in revenues. Naturally, the record run-up in sales for the business helped boost its stock to new highs in 2021.

However, with the bear market and stringent firearms laws, the company shares dipped significantly last year. Nevertheless, with the stock trading at just 1.3 times forward sales, and an encouraging outlook ahead, POWW stock is well worth the risk.

On the date of publication, Muslim Farooque 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.