Penny stocks could see a revival in 2024 as the Federal Reserve and other central bank starts cutting interest rates. Historically, these companies tend to thrive when there is a risk-on sentiment in the financial market, which is already happening as the fear and greed index has risen to 66.
Penny stocks often give investors a good way to make some quick returns. However, most of them can be highly risky. For example, as we wrote earlier this year, Bit Brother was becoming a favorite company among penny stock investors. The stock has plunged since then and is no longer all that active.
Traders have also lost substantial money investing in penny stocks like Mullen Automotive, Canoo, Fisker Automotive, and Lordstown Motors. Here are some of the top penny stocks to consider if I had $500 to invest.
Lloyds Bank Group
Lloyds Bank Group is a large banking organisation in the UK, where it offers its financial services to over 26 million customers. In addition to its eponymous brand, it also owns other brands like Halifax, Scottish Widows, Bank of Scotland, MBNA, and Black Horse.
Unlike most penny stocks, Lloyds is not a small, troubled company. It is a juggernaut with a market cap of over $46 billion.
Lloyds is listed in the UK, where its stock was trading at 58.26 GBX. It also has ADRs that are traded in the United States, which go for just $3.1, making it a penny stock.
Lloyds’s ADR has done well this year, rising by almost 60% in the last 12 months, helped by higher interest rates in the UK and its focus on boosting shareholder returns.
The RealReal
The RealReal is a company that aims to disrupt the luxury fashion industry. It operates a website and applications that lets people list and sell their designer items like clothes, bags, jewerly, and watches.
The company has had a rough patch in the past few years as its stock plunged from $30 in 2021 to a low of $0.9824. It has also made substantial losses in the past few years.
However, looking at its financials shows that its business is improving. Its revenues rose from $130 million in the second quarter of 2023 to over $144.9 million in the last quarter. It also narrowed its quarterly loss from $41 million to $16.7 million This improvement explains why its stock has jumped by over 41% in the last 12 months.
New Gold | NGD
The other penny stock to buy is New Gold, a Canadian company whose stock was trading at $3.05 in the United States.
It is a gold mining company valued at over $2 billion. Its business is made up the Rainy river and the New Afton copper-gold mine.
New Gold’s stock has surged by over 190% in the last 12 months, helped by the ongoing gold price rally. As a result, its revenue rose from $184 million in the second quarter of 2023 to over $218 million.
Gold jumped to a record high of $2,558 and this trend may accelerate as the Fed starts cutting interest rates.
Ocugen | OCGN
Ocugen is another penny stock to consider. It was trading at $1.14 and has soared by over 185% in the last 12 months, giving it a market cap of over $328 million.
Ocugen is a biopharmaceutical company focused on the eyes, especially the retina. Its primary product, known as OCU400 has now moved to the third phase and analysts expect that it will gain the final approval by the FDA.
If this happens, it means that the stock will bounce back as hopes of its acquisition rise. The main risk for Ocugen is that it may be forced to raise cash to fund its R&D since it ended the last quarter with less than $16 million in cash.
Read more: Ocugen stock is a good speculative buy but there’s 1 key risk
EVgo | EVGO
EVgo is a company I wrote about this week, as you can find here. It is a penny stock trading at $4 and with a market cap of over $1.12 billion.
There are a few reasons why EVgo is a good contrarian penny stock to buy. First, the number of EVs on American roads is rising. It is estimated that the number has moved from below 100k a decade ago to over 2 million today. While the growth is slowing, the reality is that the industry will always be there.
Second, EVgo’s business is still growing despite the challenges in the EV industry. Its quarterly revenues rose from $50.6 million in Q2’23 to over $66.6 million in the last quarter.
Third, it has a goal to become profitable in the next few years. Most importantly, its top competitors like Blink Charging and ChargePoint are all struggling, meaning that it will continue gaining market share.
The other top penny stocks to consider are Tilray Brands, Planet Labs, Clover Health Investment, and The Honest Company.
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