When it comes to finding the best penny stocks under $3 to buy now, there are scores of potential candidates. According to Finviz, there are nearly 1,500 publicly-traded companies listed on major U.S. exchanges that trade for $3 per share or less. Add in the similarly-sized number of sub-$3 per share stocks trading in the over-the-counter (OTC) markets, and it’s clear that investors targeting this risky yet high-potential end of the market have a wide pool of investment choices.

That said, the vast majority of stocks in this category aren’t even worth keeping an eye on. These names are overvalued, and/or have weak fundamentals, making them not worthwhile, even as a long-shot wager.

However, while you should skip most of them, quite a few are strong opportunities at present. That’s the situation with the seven stocks listed below. These penny stocks under $3 to buy now, a mix of value and growth plays each offer the potential for strong returns.

American Shared Hospital Services (AMS)

Earlier this month, I named American Shared Hospital Services (NYSEAMERICAN:AMS) one of the best penny stocks to buy. The lessor of radiation therapy equipment to hospitals and medical facilities is a strong opportunity for several reasons.

First, AMS stock is one of the few penny stocks under $3 with strong fundamentals and earnings. Besides being consistently profitable, this company is well capitalized, with a $12.3 million cash position, which is high relative to its $17.5 million market cap. Second, this war chest of cash provides AMS with the potential to pursue further growth of its business.

While it may take several years to achieve this incremental growth, it may just well be worth it in the end. Beyond just rising in tandem with earnings growth, the stock, which trades for just 13.1 times earnings, shares could also in the future benefit from multiple expansions.

Butler National (BUKS)

Butler National (OTCMKTS:BUKS) is another fundamentally-strong penny stock. This aerospace and casino gaming company has reported a strong rise in profitability in recent years. This in turn has resulted in substantial price appreciation for shares.

Since 2018, BUKS stock is up nearly three-fold. That said, the stock more recently has remained stuck at current price levels (around 70 cents per share). However, much like investors several back, patience with Butler National could pay off again down the road.

Still a deep value play, trading for just 7.8 times earnings, there’s still the opportunity to unlock the underlying value of Butler’s two main operating segments, via a spinoff and/or an asset sale. The launch of sports betting in Kansas is another catalyst for the stock. Through its sole gaming property (the Boot Hill casino), Butler currently hosts two sportsbook operators, with the ability to add a third sub-licensee.

Honest Company (HNST)

At first, you may be skeptical why I consider Honest Company (NASDAQ:HNST) one of the best penny stocks under $3 to buy now. Shares in this eco-friendly personal and household products company have performed extremely poorly since their 2021 IPO

Since then, HNST stock has cratered nearly 90%, from an IPO price of $17 per share to around $1.75 per share today. However, while “buying the dip” with a fallen angel stock isn’t always the best move, entering a small, speculative position in this situation could be worthwhile.

Although revenue growth has stagnated, and the company remains unprofitable, as a Seeking Alpha commentator argued last month, the strength of its brand may make it an ideal acquisition target for Procter & Gamble (NYSE:PG) or a similar deep-pocketed strategic buyer. Honest’s recent earnings miss could be the impetus for it to pursue a sale of the company.

I-80 Gold (IAUX)

With spot prices back near $2,000 per ounce, many investors may be looking for an ideal vehicle to bet on a possible continued gold rally. One of the best ways to make this wager may be by buying I-80 Gold (NYSEAMERICAN:IAUX). Gold mining stocks are a great vehicle to make a leveraged bet on gold prices.

But what makes IAUX stand out is not only this factor. I-80 Gold is one of the best penny stocks under $3 with positive surprises and momentum for another reason. As I argued back in December, this company is only now starting to enter the production stage.

Beginning to turn its indicated reserves into revenue and earnings, just as gold is possibly taking off in price, this could send I-80 stock (recently in a slump, after a strong rally late last year) on its way to substantially higher prices.

Marimed (MRMD)

While high-profile cannabis stocks continue to have poor fundamentals and uncertain prospects, there are plenty of under-the-radar names in this space worthy of a buy. A good example is Marimed (OTCMKTS:MRMD). Marimed is a producer, wholesaler, and retailer of cannabis products, operating in several U.S. states.

Earlier this month, I named MRMD stock one of the best cannabis stocks to buy today. Mostly, on account of its strong financial performance. In contrast to many cannabis companies, Marimed has been consistently profitable. Shares also trade at a relatively low 9.5 times earnings.

While cannabis stocks across the board may be poised to take off, whenever the sector comes back into favor, fundamentally-strong names like Marimed may offer the potential for outsized gains. If you are bullish on cannabis legalization but don’t want to pay up for exposure, MRMD is one of your best choices.

PLBY Group (PLBY)

PLBY Group (NASDAQ:PLBY), which as its name may suggest owns the Playboy trademark, is one of many companies that went public via a special purpose acquisition company (or SPAC) merger, that now languishes deep in penny stock territory.

Yet while the company’s poor fiscal performance may make it seem like a hard pass, there may be merit in buying PLBY stock as a turnaround play. The company is starting to implement a change in strategy, as detailed in its latest investor presentation.

This includes focusing on building its creator platform and simplifying its operating model back to one that is primarily licensing-based, as well as through the divestiture of non-core operating segments. Even a moderate level of success with this turnaround could swing PLBY to profitability, with shares zooming back to higher prices. With this, consider it one of the best penny stocks under $3 to buy now.

Vaso (VASO)

Over the past twelve months, shares in healthcare equipment and IT firm Vaso (OTCMKTS:VASO) have delivered outsized gains. During this timeframe, this stock has rallied by nearly 172%.

However, much like the other names listed above, this continues to be one of the best penny stocks under $3 for 2023. Despite the big jump in price, VASO stock remains cheap, at only 3.5 times earnings. While growth has slowed down, the company’s operating performance does not appear to be on the verge of severe deterioration.

Vaso is also sitting on over $20 million in cash, with little outstanding debt ($1.8 million). Much like AMS, VASO could use this war chest to fund future growth. As one of the fundamentally stronger and better-capitalized OTC-listed companies, Vaso may in the future consider up-listing to a major stock exchange, which would likely result in multiple expansions for shares.

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

On the date of publication, Thomas Niel did not hold (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.