Investors know that the key to profit lies in return – that is, risk-taking. The risk is of course relative and tends to go hand in hand with the potential for return. Find a stock with huge return potential, and there`s a good chance you`ve found one with a higher risk profile. The highest returns usually come with the lowest stock prices. Indeed, if a stock is valued for only cents, even a small price gain leads to a huge return. Which means Penny Stock — which is generally considered a stock priced below $5 — combines a perfect storm of market attractions: a low stock price, a high return, and higher-than-usual risk. Through the TipRanks database, we have details on three compelling stocks that fit this profile of low stock prices and huge upside potential of 100% or more, according to Wall Street analysts. Cinedigm Corporation (CIDM) We start with Cinedigm, the LA-based entertainment company specializing in content marketing and distribution and digital cinema. Cinedigm is an independent studio for film, TV and digital production. The company markets digital media on a variety of content networks. As early as June, CIDM shares showed a sharp rise when the company announced its partnership with Vewd, the world`s leading provider of OTT software for Smart TVs, a growing segment of the digital audience world. Customers are moving away from cable TV and increasingly to streaming.
A working relationship with a smart TV software company would allow Cinedigm to access Vewd`s installed customer base – more than 300 million smart TVs. Revenue in 2020 was fairly stable. For Q1, Q2 and Q3, revenue was $US 7.74 million, $US 6.02 million and $US 7.18 million. The number Q3 maintains the average place in this area. However, the result did not meet expectations. With a loss of 23 cents per share, EPS was 17 cents below expectations. It is positive to note that CIDM recorded a 27% increase in revenue compared to the previous year in the core advertising-based video-on-demand sector. 5-star analyst Daniel Kurnos, who covers the benchmark stock, points out some reasons why he believes Cinedigm „is becoming a much more fascinating investment offering, especially at these levels: 1) Organic growth is still under development, with the legacy Channel Lineup strategy on track to reach the 30-channel milestone 12 months ahead of schedule; 2) A new strategy of continuous deployment, which increases value, is emerging, which Cinedigm is the best way to implement with minimal competition. 3) Cinedigm`s digital inventory of projectors or participation in Starrise no longer has credibility or value that should ultimately benefit in a post-COVID world. In line with its bullous attitude, Kurnos is evaluating CIDM with a buy, and its price target of USD 3.50 implies a staggering upside potential of 573% over the next 12 months.
(To see Kurnos` list of achievements, click here) Currently, CIDM has recorded 2 valuations, which makes the stock a moderate buy. Shares are sold at 53 cents and the average price target of 2.75 $US indicates an impressive upside potential of 418% on the one-year Horizon. (See analysis of CIDM shares on TipRanks) Kubient (KBNT) Content distribution relies heavily on marketing and monetizing their profits, and this is where Kubient comes in. This cloud-based software company offers an advertising platform that directly connects publisher and marketing to its target groups. The company works with Target Group Automation to collect data, connect brands and create a seamless advertising environment through digital channels. Kubient is a new stock exchange company that only went public last August. .