An Introduction to 5G Network Penny Stocks
While the economy and individual finances have seen some turbulence during the pandemic, more and more people are still being proactive, investing, and saving money for a post-coronavirus America. Among these new shareholders are those that are dipping their toes in the investing pool of penny stocks.
Penny stocks, also known as microcap stocks, are for businesses with a market cap of $250-$300 million. This translates to affordable stocks, often less than $5, that are traded directly from seller to buyer. They are a bit risky and are found on over-the-counter markets and sometimes the New York Stock Exchange (NYSE) or NASDAQ.
What is so appealing about small-cap stocks is the high rate of return when the company does well. Many can see a 100% or more increase in the share price within a day or less.
Penny stocks are available in virtually every industry imaginable. Biotechnology, agriculture, tech stocks, and energy are some of the more popular penny stocks available. Within technology, 5G network penny stocks are booming.
As we watch technology take us further into the future, networks that develop and implement the new advances are the ones typically doing well. Keep an eye on the major cell phone companies and watch how they develop ways to get information faster. When they do, their stock value might be well worth your time.
In this article, we will teach you about trailblazing companies and up-and-coming companies to keep an eye on in the 5G stock market. We will also teach you about the risks associated with investing that you need to be mindful of when making financial decisions in this market.
5G Stock Trailblazers
Say the phrase “5G,” and almost everyone associates it with cell phone service. It goes beyond technology and deals with microfibers and infrastructures.
Many businesses are adopting the new infrastructures in many sectors. Healthcare and city governments are looking to 5G to keep them in the 21st century. Even the Department of Defense is using it to improve communications at military bases.
We are going to discuss the 5G companies that are the trailblazers of 5G networks. Here you will find cellular networks, services, and software providers:
- Verizon (NYSE: VZ)
- American Tower Corporation (NYSE: AMT)
- Qualcomm (NASDAQ: QCOM)
- T-Mobile (NASDAQ: TMUS)
Verizon (NYSE: VZ)
Verizon is synonymous with reliable 5G service and excellent customer service. The company originated in Delaware in 1983 as Bell Atlantic. In 2000, the company changed its name to Verizon and acquired GTE. It is now the second-largest wireless communications service provider, next to AT&T. Once it started offering Apple phones, the company really gained traction as reliable service and improved profitability
Headquartered in Manhattan, New York, the company has reported revenue at over $125 billion. Stocks have been steadily growing over the last year with the 1st, 3rd, and 4th quarter of 2020 seeing significant increases. However, the 2nd quarter 2020 and 1st quarter 2021 saw some alarming drops in stock price. The pattern reveals that there will likely be another drop in value in the short term and may provide ripe opportunities to buy low on this 5G juggernaut.
American Tower Corporation (NYSE: AMT)
American Tower Corporation is an owner and operator of wireless communications infrastructure in several countries. It is headquartered in Boston, Massachusetts, and has been an innovative company since 1955.
Current revenue is around $8 billion, which is not just entirely due to wireless communications. American Tower Corporation is also a real estate investment trust. The stock has been on a decline over the past 12 months and had a serious drop at the beginning of March 2021. It recovered quickly, but trends show that there will be another drop in value in the coming weeks, providing buyers the opportunity to invest and make a return during a highly likely recovery period.
Qualcomm (NASDAQ: QCOM)
Qualcomm is a company behind so many innovations in wireless communications. It produces everything necessary for a cell phone and other wireless devices. It also produces semiconductors, software, and services related to communications. The company began in 1985 in San Diego, California, where its headquarters are located.
Revenue has been reported at under $24 billion, and the stock has been doing amazingly well. There has been a steady growth and is expected to have a drop in value over the next couple of months. The long-term forecast predicts more steady growth. Looking at historical data, the dips in value over the last year were minuscule, and they recovered nicely. The steady growth may be attributed to the fact that there are very few telecom corporations in direct competition with the communications giant.
T-Mobile (NASDAQ: TMUS)
T-Mobile has made a name for itself in the last two decades. Founded in 1994, they have become one of the largest wireless network operators. Headquartered in Bellevue, Washington, the company has been expanding its network steadily to bring service to everyone in the country. Since the beginning, they offered a prepaid wireless service when Tracfone dominated that niche. Most recently, a merge took place with Sprint, one that turned the cellular world on its head.
Revenues from 2019 to 2020 increased significantly from $45 billion to $68 billion. There has been steady growth over the past 52 weeks with few dips in value. Trends indicate more growth to share price in the coming months, possibly due to the merge with Sprint.
Up and Coming 5G Penny Stocks
The aforementioned stocks are for those who have plenty of disposable income to invest in. As we know, this past year has been a financially hard one for many people in the U.S. Despite the coronavirus pandemic, people want to invest money to save for a move, trip, or retirement. Penny stocks are the right fit for those who want to invest with a smaller amount of money and gamble for a high return. While biotech stocks have been getting a lot of attention lately, 5G is a great place to keep your eye on.
After you have performed a background check on your investment professional, we have some recommendations for your next penny stock investment. There are a few companies that are making headway with 5G technology. These are not ranked in any particular order and are:
- Nokia Corporation (NYSE: NOK)
- Communications Systems, Inc. (NASDAQ: JCS)
- Hewlett Packard Enterprise Company (NYSE: HPE)
Nokia Corporation (NYSE: NOK)
For many older Americans, Nokia was likely the first cell phone they ever had. Founded in Nokia, Finland, in 1865, they have been a leader in telecommunications. Headquarters are now situated in Espoo, Finland, and the company is worth $23 billion Euros. Their business has expanded to include information technology and consumer electronics.
Their stock has held steady in the $4-$5 range over the past year. There were small dips in value, but the company recovered with each one. Trends show that the stock price will likely drop again in the coming weeks.
Communications Systems, Inc. (NASDAQ: JCS)
Communications Systems, Inc. is a company focused on physical connectivity infrastructure and broadband services. With 5G fueling broadband recently, it’s easy to see why the company is getting noticed. The company began in 1969 in Minnetonka, Minnesota, and has steadily enhanced its innovations over the years.
The company has been steadily losing money over the past 5 years. In 2016, the company earned $99 million. In 2019, they pulled in just over $50 million. Stocks over the last 12 months have been faring pretty well. Trends indicate that the share price will rise in the coming months. This is likely because of the merger with Pineapple Energy, and the vision is that they will be looking to solar power to boost the company.
VEON Ltd. (NASDAQ: VEON)
VEON Ltd. is a telecommunications service company that primarily services Africa, Asia, and Europe. It started in 2009 in Moscow, Russia, and its current headquarters are in Amsterdam, Netherlands. VEON Ltd. is the 9th largest mobile network operator in the world and has over 200 million subscribers. Revenues have slowly been decreasing since 2017. Revenues for 2020 came in just under $8 billion. However, there is a change on the horizon that is expected to increase stock value. VEON has just announced that it completed the acquisition of minority shareholding in Pakistan Communications Limited.
Risks of Investing in 5G Penny Stocks
There is always a risk when it comes to investing. It may be incredibly low for those who don’t like risky investments. Those are slower to make money, but they do over time. Some are higher-risk and provide incredible payouts and damaging losses. These aren’t industry-specific either. Mining, healthcare, and technology companies are all risky at some level. Here are three risks to consider before investing in penny stocks.
- Over-The-Counter (OTC) Markets Are Not Regulated – Finding penny stocks on Wall Street is a wonderful thing because you don’t have to worry too much about investment fraud. On the OTC markets, it’s more common. You sell and buy directly from shareholders online, and it isn’t necessarily protected. If you buy penny stocks, buy them on NYSE or NASDAQ to ensure governance over the company’s shares.
- Illiquid Market – An illiquid market has few participants and low activity. This is dangerous as you could pay more for your shares to complete a transaction. Then, when you try to sell your shares, you might find yourself unable to find a buyer.
- Conflict of Interest – Buying shares of a company gives you some ownership of the company. When dealing with penny stocks, you deal with tiny corporations that aren’t trending like their larger competitors. This means that executives often don’t view shareholders as “owners” and make decisions contrary to shareholders’ desires. In some cases, the executives will reject proposals because they know that the shareholders cannot afford legal assistance.
5G Network Penny Stocks: Final Thoughts
We have looked at the trailblazers who have paved the way for other smaller corporations to get in on the 5G action. 5G might be a great option over other sectors, like mining or health, because the same innovators for 5G will develop new innovations in the future.
The best thing you can do is research a company that holds your interest, hire a professional investor for real-time information, and review your watchlist often.
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