The companies which focus on operating debt-free are quite rare in current business environment which prioritizes significant growth and which focus on capturing the market opportunity as and when it arises. Here, the saying that it takes money to make money holds perfectly true. This is even more apt if businesses focus on making money in a certain time frame. Considering the rarity, investors are always on the hunt for best debt free penny stocks. However, investors should note that not every company is required to have a strong growth trajectory, leading to become a global blue-chip for it to deliver healthy returns for its shareholders.
Given the current environment of higher rates and economic uncertainty, there are certain companies having zero debt in 2023 and these are the ones becoming increasingly attractive. That said, the companies are required to have a strong balance sheet so that it weather economic storms and global challenges. Spotting the penny stocks or small-cap organisations having no debt supports in restricting certain investment risks which are inherent in some of the less-established or early-stage companies. Given that the best debt free penny stocks are mostly slower-growing companies having limited fame among the investing community, the undervalued debt free stocks are mostly common.
With this in mind, let us dig into some of the best debt free penny stocks to buy right now.
1. Quince Therapeutics, Inc.
It is a bio-pharmaceutical company, which focuses on advancing precision therapeutics that are designed to deliver small molecules, peptides, and large molecules directly to area of bone diseases so that rapid healing can be promoted.
The company has recently announced successful completion of acquisition of EryDel S.p.A., which is a privately-held, late-stage biotechnology company. Its newly acquired Phase-3 lead asset, EryDex, focuses on rare neurodegenerative disease, Ataxia-Telangiectasia (A-T). As of now, there are no approved treatments for this disease and its market exhibits a ~$1 billion+ estimated peak sales opportunity on the global basis. EryDex makes the use of highly-differentiated and proprietary technology platform for autologous intracellular drug encapsulation (AIDE), that has been designed in such a way that it optimizes bio-distribution of dexamethasone sodium phosphate (DSP) by utilising A-T patient’s own red blood cells to deliver sustained therapeutic over the once monthly treatment period.
Quince Therapeutics, Inc. remains well-capitalized into 2026 and it plans to focus development expertise and financial resources in advancing single global Phase 3 NEAT (Neurologic Effects of EryDex on Subjects with A-T) clinical trial, that is a multi-center, randomized, double-blind, placebo-controlled study to assess neurological effects of EryDex on patients having A-T.
Coming to the institutional ownership, UBS Group AG purchased a new stake in shares of the company in 4th quarter, which has the value of ~$29,000. Apart from this, State of Wisconsin Investment Board purchased new position in shares of the company in 4th quarter for the total consideration of ~$48,000. Geode Capital Management LLC purchased new position in the company in fourth quarter for the consideration of ~$87,000. Around 39.63% of the company is presently owned by institutional investors and hedge funds.
2. Galiano Gold Inc.
The company focuses on building sustainable business which is capable of creating long-term value for stakeholders through combination of exploration, accretive acquisitions, and disciplined allocation of financial resources. The company released its 3Q operating and financial results and for the Asanko Gold Mine (AGM), that is located in West Africa. AGM is 50:50 JV with Gold Fields Limited which gets managed and operated by Galiano.
Talking about Asanko Gold Mine JV (100% basis), gold production for 3Q came in at ~35,779 ounces and its YTD gold production was ~102,130 ounces. With this, full-year gold production should come in at the top end of guidance of 120,000-130,000 ounces. Total cash costs came in at $1,056 per gold ounce and all-in sustaining costs was $1,445/oz for 3 months to September 30, 2023. Therefore, full-year AISC guidance has been revised from between $1,650/oz – $1,750/oz to $1,500/oz – $1,600/oz as a result of increased gold sales and timing of sustaining capital expenditures. Gold revenue came in at $67.6 million in 3Q which was generated by selling 35,522 gold ounces at an average realized price of $1,902/oz. Net income was ~$21.3 million and adjusted EBITDA came at $25.5 million during 3Q. As of 30th September 2023, it had $136.9 million of cash and cash equivalents, $4.4 million of gold sales receivables and ~$2.0 million in gold on hand. It has no debt.
The 3Q represented a strong financial and operating period for the AGM, and this mine generated strong cash flows through stockpile processing, which continued to strengthen AGM’s balance sheet.
3. Trilogy Metals Inc.
The company is an exploration stage company which is engaged in mineral exploration. It continues to focus on exploring and developing mineral resource properties, including Upper Kobuk Mineral Projects (UKMP or UKMP Projects), in Ambler mining district which is located in the US.
It announced its financial results for 3Q ended August 31, 2023. It saw net loss of $4.1 million in comparison to net loss of $9.9 million for 3-month ended August 31, 2022. Decline in comprehensive loss in 3Q in comparison to similar quarter in 2022 as a result of fall in share of loss of Ambler Metals, and stock-based compensation and salaries.
Decline in the company’s share of losses of Ambler Metals was mainly because of fall in mineral property expenses in comparison to the similar quarter of the prior year due to decline in drilling, engineering and project support costs which was partially offset due to higher cost in Ambler Access Project.
While above are some of the best debt free penny stocks to buy right now, there are several other stocks in the penny category which are expected to perform well. While being debt-free is always preferred, it has certain disadvantages too. For example, if companies refuse to take debt, it can hinder growth prospects of the company as it can limit the expansion opportunities in new regions, acquisitions of some other companies or certain assets, etc.