With housing in a potential bubble, groceries selling for exorbitant prices, and high-interest-rates-for-longer seeming like an increasingly likely scenario, it’s no surprise that Canadian penny stocks have fallen almost completely out of investors’ field of vision.
We can see this when we compare the MSCI Canada Micro-Cap Index‘s 11.58 per cent loss over the past year with the TSX’s 4.24 per cent gain over the same period.
This downward pressure on Canadian penny stocks has resulted in promising businesses being dragged down with the herd, opening the door for long-term allocations at deeply discounted prices.
While the average investor continues to favour cash and bonds to weather the uncertain economic climate, investors seeking outsized returns find themselves at an inflection point between fear-based undervaluations and the market’s eventual recognition of that value as the Canadian economy normalizes.
To nudge TMH readers in the right direction, here are three Canadian penny stocks we believe that hold all the elements of a moonshot investment:
Odd Burger
Odd Burger (TSXV:ODD) is a food company offering a line of plant-based protein and dairy alternatives through grocery stores and a chain of fast-food restaurants.
The company has nine restaurants operating across Canada with 15 more under construction. This is in addition to pipelines of more than 100 locations in Canada and the United States, and more than 150 locations in India and Singapore.
Odd Burger’s retail product line, Preposterous, is expected to reach all restaurant locations and select Canadian retailers this month.
According to Straits Research, the global vegan food market will grow from US$16.45 billion in 2022 to US$36.02 billion in 2031 at a CAGR of 9.1 per cent.
Q3 results suggest Odd Burger is positioning itself to capitalize on this growth with record quarterly revenue of C$860,020, its lowest quarterly loss in two years, and a healthy gross profit margin of C$234,256 (27 per cent of sales).
As an added kicker, insiders own more than 50 per cent of Odd Burger, which should put shareholders at ease in terms of management acting in their best interest.
Odd Burger (TSXV:ODD) is down by 28.57 per cent since inception.
Click here to read Odd Burger’s latest investor presentation.
ARway
ARway (CSE:ARWY) is an AI-powered spatial computing platform that provides augmented reality experiences for indoor spaces, including navigation, tours, information sharing, notifications, advertising and gamification.
The tech developer’s no-code, no-hardware and no-beacon solutions cater to a growing number of creators and brands across a variety of industries, including Localiza, the largest car rental network in South America, and one of the largest shopping malls in California, saving them hundreds of thousands of dollars compared with legacy providers like Pointr, Situm, Purple and Mappedin.
CEO Evan Gappelberg – who owns more than 10 per cent of ARway and boasts an over 25-year track record of creating shareholder value – sat down with our Coreena Robertson to discuss the company’s latest client acquisition, Süleyman Demirel Üniversitesi, the second-largest academic institution in Turkey with more than 70,000 students.
ARway’s platform had approximately 2,800 users as of Aug. 2, an increase of 975 per cent YoY, with 35 active trials and pilots, up by 1,450 per cent YoY, across an almost C$3 million sales pipeline.
This trajectory aligns with Future Market Insights‘ estimate for the spatial computing market to grow from US$87.5 billion in 2021 to US$544.6 billion in 2032 at an explosive CAGR of 18.2 per cent.
Backed by a low-cost solution whose ease of use opens up a variety of use-cases, including corporate offices, stadiums, museums, trade shows and galleries, ARway has set a scorching pace of development since going public in October 2022, which is in stark contrast to its share-price performance.
ARway stock (CSE:ARWY) is down by 65.10 per cent since inception.
Click here to read ARway’s latest investor presentation.
Gamelancer Media
Gamelancer Media (TSX:GMNG) is a digital media and entertainment company that creates content for brands. Its clients include Samsung, Disney, ESPN, the NHL and Universal Music Group.
The company has attracted clients with high profiles because of its 42 million followers across TikTok, Instagram, Snapchat and Threads, 2 billion monthly video views across 66 owned and operated channels, and its in-house production capabilities from full-length feature films to 15-second TikTok ads.
Clients are keen on learning from Gamelancer’s advanced user data analytics to better cater to the Gen Z and millennial communities. This golden ticket has led the company to collect growing revenue from media production and distribution, as well as through its Snapchat Discover channels.
Momentum is such that the company is predicting revenue growth of 142 per cent in 2023 to C$8.6 million and 109 per cent in 2024 to C$18 million. Management believes the company will soon reach profitability thanks to this trajectory coupled with an expected 35 per cent reduction in expenses.
Results for Q2 2023 strengthen these predictions, with 171 per cent YoY revenue growth from C$523,865 to C$1,420,830, as does management’s recent hiring of a heavy-hitting U.S. advisory board to catalyze its presence in the US$680 billion digital advertising market.
CEO Jon Dwyer joined Coreena Robertson to discuss Gamelancer’s U.S. expansion plans.
Gamelancer Media stock (TSX:GMNG) is down by 64.8 per cent since inception.
Click here to read Gamelancer Media’s latest investor presentation.
Join the discussion: Find out what everybody’s saying about Canadian penny stocks on the Odd Burger, ARway and Gamelancer Media Bullboards, as well as Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Odd Burger, ARway and Gamelancer Media, please see full disclaimer here.
