NanoXplore And 2 Other TSX Penny Stocks To Watch

The TSX has experienced a strong year, with gains surpassing 17%, reflecting a broader trend of market strength driven by a growing economy, favorable interest-rate policies, and rising corporate profits. Penny stocks, despite their vintage label, remain an intriguing investment area for those seeking opportunities beyond the mainstream. These typically smaller or newer companies can offer surprising value and growth potential when backed by solid financial foundations.


One such penny stock to watch is NanoXplore (TSX:GRA), a graphene company with a market cap of CA$452.11 million. NanoXplore operates in the graphene sector and reported revenues of CA$129.99 million for the fiscal year ending June 2024, slightly up from the previous year. Despite being unprofitable with a net loss of CA$11.67 million, it maintains a strong financial position as its short-term assets exceed both short and long-term liabilities. The company has more cash than total debt and has not diluted shareholders recently. However, its negative return on equity highlights ongoing profitability challenges despite forecasts predicting significant earnings growth annually at 72.55%.


Another penny stock to consider is Cartier Resources (TSXV:ECR), involved in the acquisition and exploration of mining properties in Canada, with a market cap of CA$35.18 million. Cartier Resources Inc. is pre-revenue as it focuses on exploration activities. Recent drilling at its East Cadillac property has yielded promising high-grade gold results, indicating potential for significant discoveries in the Larder Lake - Cadillac Fault Zone. Despite no revenue streams, Cartier remains debt-free but faces financial constraints with short-term assets of CA$3.4 million not fully covering long-term liabilities of CA$5 million. The company has seen shareholder dilution over the past year and experiences high share price volatility, reflecting inherent risks associated with early-stage mining ventures.


Lastly, EMX Royalty (TSXV:EMX) is worth considering. Along with its subsidiaries, EMX Royalty Corporation is involved in exploring and generating royalties from metals and minerals properties, with a market cap of CA$301.56 million. EMX Royalty Corporation has been navigating its unprofitable status by maintaining a positive free cash flow and sufficient cash runway for over three years. Despite earnings declines averaging 41.8% annually over the past five years, recent revenue growth to US$12.25 million for the first half of 2024 suggests some operational improvements. The company has not experienced significant shareholder dilution recently and maintains a satisfactory net debt to equity ratio of 6.2%.


In conclusion, penny stocks like NanoXplore, Cartier Resources, and EMX Royalty offer intriguing investment opportunities. While each company faces unique challenges, their potential for growth and value makes them worthy of further consideration. As always, thorough research and careful consideration of risk are essential before making any investment decisions.