A penny stock is typically a company with a low price per share and dubious long-term prospects. And yet, despite being questionable businesses, penny stocks attract scores of investors every single day. The allure is understandable. Everyone would love market-crushing returns in a short amount of time, and penny stocks seem like the best chance. Of course, some people do get lucky trading penny stocks, further elevating the hopes of new investors.
However, some stocks offer penny-stock traits (low share price and high growth prospects) but are much better businesses and, therefore, better buys. Three Motley Fool contributors think investors should consider investing in European Wax Center (NASDAQ: EWCZ) , Ubisoft Entertainment (OTC: UBSFY) , and Skillz (NYSE: SKLZ) over penny stocks. But if you're interested in market-beating gains, you'll need to adjust your investing time horizon to buy and hold for the next five, 10, and even 15 years.
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Here's Why These 3 Low-Priced Growth Stocks Are Better Than Penny Stocks