The investors’ concerns over numerous economic and geopolitical issues have aggravated stock market volatility since the beginning of 2022. Inflation is at a 40-year high as the U.S. inflation rate increased by 8.5% in March, according to the Labor Department. Amid the skyrocketing inflation, Fed plans to raise interest rates by 50 basis points in May to fight the pricing pressures. This has further fueled the investors’ concerns about the global economic slowdown. In addition to Fed’s hawkish stance, the intensifying geopolitical tensions and resurgence of COVID-19 cases in different parts of the world are expected to keep the stock market under pressure.
Since the stock market volatility is expected to surge in the near term, the investors should prefer investing in stocks with strong financials coupled with promising growth attributes, which could deliver great returns during this recessionary period. The penny stocks are considered attractive investments due to their potential for above-average returns.
Given these factors, it could be wise to invest in fundamentally solid penny stocks such as Gran Tierra Energy Inc. (GTE) and GEE Group, Inc. (JOB).
Gran Tierra Energy Inc. (GTE)
Headquartered in Calgary, Canada, GTE engages in the exploration and production of oil and natural gas properties in Colombia and Ecuador. The company’s assets in Columbia represent 100% of its production with oil reserves and are mainly located in the Magdalena Valley (MMV) and Putumayo Basin. It has total proven undeveloped reserves of 24.8 million barrels of oil equivalent in Columbia. It has a market capitalization of $595.66 million.
Last month, GTE announced the corporate update. The company’s total average production achieved during the first quarter of 2022 was valued at 29,362 BOPD, registering an increase of 20% year-over-year. The ongoing infill development drilling campaigns in the Acordionero and Costayaco oil fields are projected to improve GTE’s full-year 2022 average production into the range of 30,500-32,500 BOPD. In addition, a significant debt reduction is reflected in its credit facility being reduced to a remaining balance of $40 million as of March 31.
In the fiscal 2021 fourth quarter ended December 31, 2021, GTE's net income increased 230.6% year-over-year to $62.52 million. Its adjusted EBITDA improved 266.7% from the year-ago value to $81.53 million. The company's funds flow from operations rose 627.3% year-over-year to $65.14 million. For the fiscal year 2021 ended December 31, its cash and cash equivalents rose 90.8% year-over-year to $26.11 million.
The consensus revenue estimate of $903.72 million for fiscal 2022 represents a growth of 50% from the year-ago value. The consensus EPS estimate of $0.44 for the ongoing year indicates a 193.3% year-over-year rise.
The stock improved 105.1% year-to-date and 141.8% over the past year. It closed Friday's trading session at $1.62.
GTE's POWR Ratings reflect this promising outlook. The stock has an overall grade of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GTE has a grade of A for Sentiment and Momentum. It has a B grade for Growth, Value, and Quality. Within the A-rated Foreign Oil & Gas industry, it is ranked #8 of 42 stocks. To see additional POWR Ratings (Stability) for GTE, click here.
GEE Group, Inc. (JOB)
JOB provides professional and industrial staffing and placement services in the U.S. The company operates through two segments: Industrial Staffing Services; and Professional Staffing Services. It provides placement of information technology, accounting, finance, engineering, and medical professionals for staffing services. In addition, it offers medical scribes that provide electronic medical record services for physician practices and clinics. It has a market capitalization of $72.74 million.
In December, JOB received complete forgiveness on all its $19.9 million of Small Business Administration (SBA) Paycheck Protection Program (PPP) loans. The PPP loans were essential for the company’s business operations during the pandemic. JOB’s pro forma balance sheet as of the fiscal year 2021 end reflected zero debt. This forgiveness in loans is expected to positively impact the company's financial results with no outstanding debt.
JOB's net revenues increased 23.7% year-over-year to $42.85 million in the fiscal 2022 first quarter ended December 31, 2021. Its gross profit grew 23.9% year-over-year to $15.58 million. The company's adjusted EBITDA rose 9.9% year-over-year to $3.90 million. Its net income and net income per share came in at $16.67 million and $0.14, respectively, registering an increase of 5,391.4% and 800% from the prior-year period.
Shares of JOB gained 10.3% over the past month and 33.3% over the past six months and closed Friday's trading session at $0.64.
Analysts expect JOB's revenue for the fiscal year 2022 to come in at $166.02 million, representing an 11.5% rise year-over-year. Street expects the company's EPS for the fiscal 2022 second quarter ended March 2022 to come in at $0.01, representing a 150% increase year-over-year.
JOB's strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, which equates to a Strong Buy in our proprietary rating system.
It has a grade of A for Value and a B for Growth, Sentiment, and Quality. Within the A-rated Outsourcing - Staffing Services industry, it is ranked #4 of 19 stocks.
To see additional POWR Ratings (Stability and Momentum) for JOB, click here.
GTE shares were trading at $1.58 per share on Monday afternoon, down $0.05 (-2.78%). Year-to-date, GTE has gained 107.59%, versus a -13.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
2 Best Stocks Under $2 to Buy This Month StockNews.com
