While 2022 has been a terrible year for investors looking for penny stocks to buy, 2023 might not be as bad. The economy went through a choppy year, and particularly volatile assets such as penny stocks sold off painfully. Of course, that correction wasn’t unexpected since penny stocks surged in 2021 due to loose monetary policy. It was unrealistic to expect these penny stocks to maintain their post-pandemic highs in 2022.

However, that does not mean it will be all “doom and gloom” for penny stocks in 2023. The selloff this year has left many companies with solid underlying fundamentals undervalued. If 2023 turns out to be a year during which the economy undergoes a soft landing, these penny stocks can surge.Conversely, I will not recommend penny stocks in recession-prone industries as they are still facing strong risks going forward.

But the Federal Reserve will likely pivot next year before reversing its  monetary policy in 2024. That change could enable the top penny stocks to climb in the long run, while alleviating their risk over the short term. Here are three penny stocks to buy:

Wrap Technologies (WRAP)

Wrap Technologies (NASDAQ:WRAP) provides law enforcement agencies worldwide with policing tools. The company’s stock recently doubled after it announced purchase orders from several police departments. These orders were for the company’s flagship BolaWrap products, which allow officers to safely restrain suspects by deploying a Kevlar tether.

Last quarter, the number of law enforcement agencies trained in the use of its products soared 41% year-over-year   Thus, investors should consider buying Wrap Technologies’ stock because of the company’s robust growth.

WRAP has a strong foothold in the public-safety sector, and its BolaWrap product is gaining traction. This product can protect the safety of both police officers and suspects, making it a valuable asset for any law enforcement agency.

Overall, Wrap Technologies is a company to watch as its stock price could continue to rise based on its innovative products and expanding market. The company has the potential to be a significant player in the public safety sector, and its stock may be an attractive buy for investors who are looking for long-term growth.

Law enforcement spending has been climbing worldwide, and I expect that trend to continue even if the U.S. enters a recession. So WRAP stock is a low-risk, high-potential name.

Immix Biopharma (IMMIX)

Immix Biopharma, Inc. (NASDAQ:IMMX) is a clinical-stage biopharmaceutical company based in Los Angeles. It is focused on developing various tissue-specific treatments for cancer and inflammation.

The stock has surged over 100% in the past month because the company obtained the “exclusive rights”  to a BCMA-targeted next-generation CAR-T therapy NXC-201. The drug, which treats a rase illness called Amyloidosis, has generated strong results so far in a Phase 1b clinical trial.

Overall, IMMX is a promising biopharmaceutical stock with a wide range of potential treatments in development. With its clinical collaborations and supply agreements, it is well-positioned to capitalize on its potential treatments and increase the value of its stock. For those looking to invest in the biopharmaceutical industry, IMMX is an attractive option.

Of course, a long time is needed to complete clinical trials, and the stock’s value is strongly tied to information about these clinical trials, which can cause some volatility. But the stock’s returns will undoubtedly be worth it if the company succeeds in commercializing the drug.

Carparts.com Inc (PRTS)

While most investors are busy talking about electric vehicles (or EVs), under-the-radar  stocks in the auto sector, such as Carparts.com Inc (NASDAQ:PRTS), should not be ignored. That’s because the U.S. civilian vehicle fleet is still overwhelmingly powered by gasoline, and a significant part of that fleet is aging.

As you may have guessed, Carparts.com sells “aftermarket auto parts and accessories.”

Most people in the U.S. simply don’t have a reason to spend money on a new car during the current, uncertain macro environment. Consequently, they repair their current vehicles if they have  problems. Moreover,  electric vehicles and  new, conventional vehicles are more expensive to insure than older, gasoline-powered vehicles.

As a result, the average age of cars in the U.S. is steadily going up and reached 13.1 years in 2022. And in 2023, not many people will consider buying a brand new vehicle because the Fed’s monetary policy will remain restrictive. Thus, Carparts.com is set to benefit from the aging fleet and is among the top penny stocks to buy.

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Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.