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TheStreet Open House

Navellier: 4 Consumer Penny Stocks to Buy

Stock quotes in this article: DRJ, KGJI, CRWN, SIRI

By Louis Navellier, Editor, Blue Chip Growth

NEW YORK ( InvestorPlace ) -- Stock picks should always be made based on the facts and investors should never take on undue risk with their investments. That's why even when buying penny stocks, traders should consider setting some minimum standards to ensure they are not getting taken for a ride.

I use the many of the same of standards I apply to blue chips to picking penny stocks -- or more specifically, equities that trade for only a few dollars a share. Stocks that actually trade for a single cent apiece are largely gambles with your money and not real investments based on the facts.

If you want a legitimate investment (though admittedly a high-risk play), consider these four cheap, consumer-oriented stocks flying high now that spending is slowly on the mend.

Dreams Inc. (DRJ)

First up to the plate is Dreams Inc. (DRJ)(AMEX: DRJ) which manufactures, distributes and sells sports licensed products, memorabilia and acrylic display cases. In the last year, DRJ has skyrocketed +59%, compared to a gain of +17% for the Dow Jones in the same time.

Things are also bright on the earnings front, as analysts project EPS of 14 cents this quarter after the stock posted EPS eight cents this quarter last year. DRJ is an affordable stock at under $2.50 a share and could see big growth in its sports-focused business as consumers start collecting souvenirs once more now that their budgets aren't so tight.

Kingold Jewelry (KGJI)

Next on the list is Kingold Jewelry (KGJI), which designs, manufactures and sells gold jewelry in China. Despite posting moderate losses lately, KGJI has potential on the horizon and recently closed on a public offering of common stock for $23 million, or $3.19 per share. Since news of the public offering, this stock has posted a modest gain of +2%. Don't be scared away by recent losses, KGJI has potential to bring you big gains.
  • Related Article: 10 Best Stocks for 2011
  • Crown Media Holdings (CRWN)

    Crown Media Holdings (CRWN) owns and operates the following pay television channels: Hallmark Channel, the Hallmark Movie Channel and the Hallmark Movie Channel HD. In the last year, this cheap stock has posted an impressive gain of +65%, compared to much smaller gains by the broader markets. Additionally, in its last income statement, CRWN posted a net profit margin of +10%.

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