I’m searching for the best penny stocks to buy right now. Here’s one I’d invest in and look to hold for the next decade.
Cyber wars
You can’t open a newspaper nowadays without hearing of another high-profile cyber attack.
On Tuesday card retailer Funkypigeon.com announced it had to suspend orders following a “cyber security incident”. This was followed today by reports that personal data on UK government officials has been released following a cyber strike.
Such attacks are growing as the world becomes more digital and the number of individual and state-sponsored hackers multiplies. So the need for public bodies, companies and other organisations to have strong security is increasing rapidly.
A surging penny stock
This is why I think Corero Network Security (LSE: CNS) has a bright future. This tech-focused penny stock builds products that protect against so-called Distributed Denial-of-Service (or DDoS) attacks. Such strikes target a website with huge volumes of fake traffic designed to take it offline.
I think buying Corero could be a particularly good idea before it releases full-year financials on Tuesday (26 April). I’m expecting a positive trading update that could fuel fresh share price gains.
Corero’s share price has rocketed over the past year thanks to news of exceptional trading activity. In its most recent update in January Corero said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) to be “materially ahead of market expectations” in 2021 and range between $3.8m and $4.2m.
Corero said that this would be driven by “continued strong demand for [our] market-leading DDoS mitigation solutions, coupled with ongoing margin improvement and controlled operating expenses”. The business recorded an EBITDA loss of $1.4bn the year before.
A booming market
The problem with buying penny stocks is that they can be prone to bouts of extreme price volatility. This is evident in Corero’s wild price swings of recent sessions and further heavy weakness could occur at any time.
However, as a long-term investor, the possibility of fresh volatility wouldn’t be enough to discourage me from investing. I believe Corero could deliver exceptional returns as demand for cyber security products lifts off.
Analysts at Grand View Research think this market will be worth more than half a trillion dollars ($500.7bn)by 2030. That compares with the $200.7bn it was valued at last year.
A great UK growth share
Buying Corero shares isn’t without risk, of course. It doesn’t have the brand recognition of trusted rivals like Microsoft and McAfee. And the penny stock doesn’t have the financial clout of these US heavyweights with which to develop its product suite.
Still, these are risks I’d be prepared to swallow given the rapid pace at which Corero’s business is growing. I think this tech darling could help me make a lot of money over the next 10 years.