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Every time I write about penny stocks and over-the-counter (OTC) stocks I like to reinforce the idea of their volatility. The potential losses are very real. I always mention that I think playing in this arena is to be done with caution. Balance is key. Thus, I'd almost never recommend any investor place their capital in penny stocks alone. It's just too risky.

That said, there are clearly winners to be found in this class of equities within the OTC markets. And that's what we'll be looking at today: the OTC stocks that were winners in 2021. Looking at equities that posted strong returns the previous year is often futile. Past returns do not predict future returns. But in this case, I think it's a strong place to start.

Most of these penny stocks showed gradual, steady price appreciation throughout 2021. That's a welcome change in the world of penny stocks. They too often rely on sudden changes of fortune. Chasing overnight successes in equities is a sure fire recipe for disaster.

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That said, let's look at 2021's relatively steady successes in OTC stocks:

• PetroSun (OTCMKTS:PSUD)
• Cytta Corp. (OTCMKTS:CYCA)
• Nanophase Technologies (OTCMKTS:NANX)
• Helo Corp. (OTCMKTS:HLOC)
• Chesapeake Granite Wash Trust (OTCMKTS:CHKR)
• Clinigence Holdings (OTCMKTS:CLNH)
• Global Warming Solutions (OTCMKTS:GWSO)

2021's Big OTC Stocks: PetroSun (PSUD)

PetroSun is an energy company that is very diversified. The company operates across oil exploration and production, natural gas, helium and lithium exploration, desalination and solar. That's a fairly broad chunk of the energy sector and other sectors as well. The company is geographically focused in the American Southwest, with operations in Arizona, Utah, Colorado and New Mexico.

PetroSun began 2021 trading at very low prices, at below 10 cents per share. It traded sideways from there, until spiking upward starting in late July. It seems that the company had been gaining a bit of attention in the lead up to a mid-year press release detailing its progress on several developing projects. That release detailed helium, lithium, water and CBD progress, which seems to have been enough to set a new price floor for PetroSun.

It now trades around 40 cents, as it has for the past 6 months. The company's financial statements show that it reported two consecutive years of net losses exceeding $3 million in 2019 and 2020.

The reason investors remain interested is energy reserves that the company may or may not prove. Nevertheless, traders seem to be propping it up until they are proven or disproven, at least.

Cytta Corp. (CYCA)

Cytta Corp. shares are not the steady performers I spoke about in the intro to this article. The shares themselves traded mostly flat throughout 2021. It was only in early November, when Cytta Corp. became a fully reporting U.S. SEC (Securities and Exchange Commission) company, that it peaked.

That was really what made investors believe the firm has good things in store. CYCA stock did make it big in 2021. It appreciated from 8 cents to end 2021 at 53 cents. Take that for what it's worth. Frankly, it's difficult to have much confidence in its performance. Regardless, some investors profited handsomely.

So, that brings us to the question of what Cytta Corp. actually does. It develops and distributes video streaming compression software. One of its systems is called the IGAN ICS system "which is incredibly useful and valuable for police, firefighters, first responders, emergency medical workers, industry, environmental and emergency situations, security, military and all their command centers in any emergency situation."

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Cytta Corp. is now responsible for filing with the SEC under GAAP rules moving forward. Thus, it should be more transparent. That's why it spiked. But at the same time, caveat emptor. The last quarterly report dates back to 2017.

It highlights 2014 operations during which it recorded $11,500 of sales in Q2.

2021's Big OTC Stocks: Nanophase Technologies (NANX)

Nanophase Technologies is a firm that operates in the nanomaterials industry. It produces multiple metal oxides which it sells into markets including personal care, energy, textiles and plastics.

Share prices steadily increased throughout 2021, rising from 85 cents to $4. That is logical given that Nanophase Technologies has reported six consecutive record quarters.

The firm's most recent financial results show that it delivered $22 million in revenue through the first nine months of 2021. That exceeded full 2020 revenue by more than 98%. The company noted that its sales pipeline also remains robust, "After delivering more than $22M in revenue during the first nine months, we still had purchase orders in hand for another $27M+ taking us well in to 2022. Approximately $10M of this applies to 2021 customer orders, the majority of which we expect to fulfill prior to 2022."

The company has found a niche in the beauty industry and looks to continue to exploit it moving forward. If nothing else, it has a straightforward, easy-to-understand business.

Helo Corp. (HLOC)

It is often the case that authority figures can make a company. What I mean is that recognition from a well-known company can thrust a relatively unknown firm into the spotlight. That's precisely what happened in the case of Helo Corp.

It had been trading very flat — near $1.10 steadily — up until Dec. 3, 2021. It was on that day that Helo, a developer of wearable wireless health devices, announced that it was a recipient of a Deloitte Fast 500 Technology Award.

 That sent HLOC stock rocketing upward. And, as noted, "this year and for the first time, Helo Corp., trading as Vyvo was chosen by Deloitte to join this elite group of high-achievers who were selected based on their revenue growth from 2017 to 2020. Helo's percentage fiscal year revenue growth was 679% during these three years, which is well above the Technology Fast 500 median growth rate of 521%."

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Vyvo technology enables accurate measurement of blood oxygen, blood pressure and heart rate variability along with other health measurements.

2021's Big OTC Stocks: Chesapeake Granite Wash Trust (CHKR)

Chesapeake Granite Wash Trust is a royalty interest company. This is a relatively uncommon business, so it warrants explanation:

"Royalty interests are favorable for smaller companies that hold ownership rights to developable oil fields but lack the financing or technology to bring these resources into production. Entering into a royalty interest agreement works for all parties involved. The company tasked with bringing the resources into production is entitled under contact to retain a portion of the output for sale on the market. This operator will need to decide for itself whether a particular project will be profitable. In return for access to the oil fields, the producing company pays the field owner a royalty. The owner would not be able to receive this royalty unless the resources are developed, produced and sold, so entering into this agreement is economically profitable for them."

For the period between March 31 and May 31, 2021 the company recorded $2.153 million in revenue leading to a royalty of 3.73 cents per each share held. The company paid two such distributions in 2021. Share prices essentially quadrupled during 2021, rising from 20 cents to approximately 80.

Clinigence Holdings (CLNH)

Clinigence Holdings is a population health analytics company that provides turnkey software as a service (SaaS) solutions that enable connected intelligence across the care continuum by transforming massive amounts of data into actionable insights. In other words, healthcare analytics.

The company had a strong year in 2021. In the trailing 12 months, it reported $13.3 million in sales, up from $1.6 million in 2020. Clinigence Holdings was profitable during both of those years.

As might be expected, CLNH stock rose in kind. It began 2021 trading near $1.35 but steadily appreciated to end 2021 above $4.

The company doesn't have any analyst coverage, thus it's difficult to find projections moving forward. That said, given the massive increase in sales CLNH stock is probably not at risk of dropping precipitously.

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If I were to consider investing, I'd pay close attention to gross profit margins as well as the overall revenue growth.

2021's Big OTC Stocks: Global Warming Solutions (GWSO)

It's difficult to say why Global Warming Solutions had a strong year other than to note that its share price increased. That's because information about the company is spotty.

The company added a new board member in October. Dr. Elena Shembel has 40 years of experience in "electrochemical technology, nanotechnology, which realizing the chemical power sources (e.g. lithium and magnesium batteries), fuel cells, solar cells, technologies and equipment in the field of energies, innovative non-destructive non-contact methods."

Then, in late November the company announced that a "Prominent European University's Department of Chemistry has successfully conducted a Third-Party Testing & Analysis of the Technology surrounding 'GWSO's hybrid hydrogen production system.'"

Note that the company did not name that prominent university. That does strike me as a bit odd, and you as well I'm sure. The funny thing is GWSO stock prices had already shot up before either of those pieces of information were announced. The result was that GWSO share prices increased from $1.55 to $8.40 throughout 2021.

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, Alex Sirois 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.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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