For anyone interested in must-buy penny stocks to add to your portfolio in 2023, the framework comes down to a single concept: high risk, and high rewards. To be sure, anyone venturing into this space must acknowledge that the sector represents a gamble. With limited awareness and participation, these penny stocks may skyrocket at a moment’s notice. They can also implode without warning so you must be prepared.

At the same time, penny stocks don’t always guarantee losses – just most of the time. For fairness’ sake, many top enterprises today started from humble beginnings. Thus, it’s possible that some of these risky ventures may pay off. Finally, on a positive note, if you’re going to waste money on something stupid, you might as well not do that and instead, acquire the below penny stocks. Who knows? You might just be handsomely rewarded and if not, you might get a tax benefit out of your troubles.

Silvercorp Metals (SVM)

Based in Canada but focused on China, Silvercorp Metals (NYSEAMERICAN: SVM) is a precious metals company engaged in the acquisition, exploration, and development of silver-containing properties. Per Silvercorp’s public profile, the enterprise represents China’s largest primary silver producer. Since the Jan. opener, SVM gained a little over 1%. In the trailing year, shares slipped almost 14%.

Despite less-than-desirable chart performance, SVM enjoys other positive attributes. According to Gurufocus.com’s proprietary calculations for fair market value (FMV), SVM rates as modestly undervalued. On an objective basis, SVM trades at 1.1 times its book value. In contrast, the sector median value is 1.63 times. Most significantly, Silvercorp benefits from excellent profitability. Currently, its net margin stands at 11.3%, ranking above nearly 71% of the competition. Finally, Wall Street analysts peg SVM as a consensus moderate buy. Further, their average price target stands at $4.72, implying over 54% upside potential. Therefore, it’s one of the penny stocks to keep on your radar.

Planet Labs (PL)

Based in San Francisco, California, Planet Labs (NYSE:PL) is a public Earth imaging company. Specifically, its main purpose is to image the entirety of the Earth daily to monitor changes and pinpoint trends. Some of the data is available under an open data access policy, providing up-to-date information relevant to climate monitoring, crop yield prediction, urban planning, and disaster response.

To be fair, Planet Labs represents one of the more narrative-driven penny stocks. For instance, while Planet Labs features a gross margin of 45%, both its operating and net margins rank well below breakeven. Therefore, other key stats like return on equity (ROE) and return on asset (ROA) sit in red ink as well. Still, Planet Labs offers a strong balance sheet. Presently, its cash-to-debt ratio pings at 24.22 times, outpacing over 84% of the industry. As well, its Altman Z-Score is 3.42, reflecting low bankruptcy risk.

Turning to Wall Street, covering analysts peg PL as a consensus strong buy. Their average price target stands at $8.40, implying 78% upside potential.

B2Gold (BTG)

Another precious metals-related example among penny stocks to consider, B2Gold (NYSEAMERICAN:BTG) is a Canadian mining firm. Per its public profile, it owns and operates gold mines in Mali, Namibia, and the Philippines. Admittedly, recent rumblings in the equities space have not acted too kindly on BTG. For instance, since the Jan. opener, BTG gave up 12% of its equity value.

With that loss, the trailing-year performance slipped to nearly 20% below parity. Nevertheless, the fundamentals appear positive. With fears of an economic recession rising, it’s possible that the Federal Reserve could revert to an accommodative monetary policy. If so, that would be beneficial for precious metals. And if anything, gold might respond favorably to the fear trade, irrespective of the greenback’s valuation.

Currently, Wall Street analysts peg BTG as a consensus moderate buy. Further, their average price target stands at $5.62, implying nearly 72% upside potential. Thus, it makes for an enticing case among speculative penny stocks.

Denison Mines (DNN)

Another mining firm, Denison Mines (NYSEAMERICAN:DNN) ranks among the penny stocks covering a “precious” metal: uranium. While it’s not precious in the sense that you’re not going to find uranium coin dealers at your local strip mall – at least I hope not – the commodity undergirds modern energy infrastructures. Sure, nuclear power carries a challenging reputation. But it’s also unignorable.

According to the Nuclear Energy Institute, a core advantage of nuclear fuel centers on its energy density. For instance, one uranium fuel pellet has as much energy potential as 17,000 cubic feet of natural gas, 149 gallons of crude oil, and one ton of coal. As a result, out of 93 reactors in the U.S., it generates nearly 20% of all the nation’s electricity.

To be fair, Gurufocus.com warns its readers that DNN rates as significantly overvalued. However, this might be overcome with Denison’s broader relevance. As well, the company enjoys a stable balance sheet. Perhaps most importantly, covering analysts peg DNN as a consensus strong buy. In addition, their average price target stands at $2.70, implying over 121% upside potential.

Ferroglobe (GSM)

Billed as a global leader in advanced metallurgical products, Ferroglobe (NASDAQ:GSM) provides critical solutions for hundreds of consumers and industrial applications supporting the sustainable advancement of society. Per its website, Ferroglobe represents the largest merchant producer of silicon metal in the western world. As a possible sign of its relevancy, GSM shot up nearly 19% since the January opener.

In fairness, GSM gave up over 42% of equity value in the trailing year. Still, from a different perspective, this could symbolize a discounted opportunity. Indeed, Gurufocus.com’s proprietary FMV analysis pegs GSM as significantly undervalued. Objectively, the market prices GSM at a trailing multiple of 1.69. As a discount to earnings, Ferroglobe ranks better than 95.1% of the competition. Currently, only one analyst covers Ferroglobe, with the expert rating it a buy. As well, the underlying price target is $10, implying upside potential of 130%. Therefore, GSM stands among the intriguing (and underappreciated) penny stocks to consider.

MaxCyte (MXCT)

Based in Maryland, MaxCyte (NASDAQ:MXCT) is a pioneer in cell engineering enabling technology. Per its stated ethos, the company seeks to drive the discovery, development, and manufacturing of next-generation, cell-based medicines. Still, the biotech industry represents an incredibly volatile and competitive arena. Since the Jan. opener, MXCT slipped nearly 10%. As well, in the trailing year, it’s down over 25%.

Now, I’m going to give it to you straight: MXCT ranks among the riskiest penny stocks. Presently, Gurufocus.com warns that MaxCyte is significantly overvalued. Objectively, MXCT trades at over 12 times (trailing) sales. As a discount to revenue, MaxCyte ranks worse than nearly 81% of its peers. On the flip side, MXCT trades at 1.77 times its book value. Here, as a discount to the underlying metric, MaxCyte ranks better than 64.58% of the industry. Further, the company’s price-to-net-cash ratio pings at 2.25. In contrast, the sector median value stands at 7.14 times.

Again, only one analyst covers MXCT, pegging it a buy. However, the expert’s price target of $13.53 implies upside potential of over 192%. Therefore, it’s one of the penny stocks to gamble on with speculation-earmarked funds.

RLX Technology (RLX)

If you really want to take your penny stocks to the extreme, RLX Technology (NYSE:RLX) may be right for you. Presently listed on the New York Stock Exchange – though we’ll see how long that lasts – RLX is a China-based e-vapor company. Per its website, RLX leverages its strong in-house technology and product development capabilities and in-depth insights into adult smokers’ needs to develop superior e-vapor products.

Before you venture into RLX, you must understand one thing: this is pure, unadulterated speculation. Since the January opener, shares tumbled almost 20%. In the trailing year, they’re down nearly 34%. However, it does have a sole analyst backing and that might be because of its strong, cash-rich balance sheet. As well, it features a strong net margin of 31.47%. Almost as a bonus, the market prices RLX at a trailing multiple of 8.08. As a discount to earnings, the company ranks better than 80% of its peers. Now, from that sole analyst, RLX enjoys a price target of $9.35. That implies – get ready for this – an upside potential of over 372%.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

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

On the date of publication, Josh Enomoto 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.