In this article, we discuss the 11 best penny stocks to buy now. If you want to read about some more penny stocks, go directly to 5 Best Penny Stocks to Buy Now.
The majority of penny stocks, which are defined as securities that trade for less than $5 per share, have had a terrible year. Although a few stocks have outperformed, overall perception towards investing in penny stocks has been negative. This persistent lack of interest in penny stocks can be attributed to macro uncertainties like inflation, supply-demand imbalances, and rising interest rates. Investors are wary of investing in these securities since they are often riskier and more volatile than large-cap equities, such as Apple Inc. (NASDAQ:AAPL), Colgate-Palmolive Company (NYSE:CL), and Amazon.com, Inc. (NASDAQ:AMZN). This implies that their price fluctuations, both up and down, can be far more extreme.
A recent Bloomberg survey reveals that the 10% gain which is predicted for stocks in 2023 would fall short of previous market rebounds. It is predicted that the economy is not going to be able to see a sustained expansion continue into 2023. Meanwhile, heading into 2023, some analysts see potential opportunities in high-quality US large-cap equities with dividend payments that have consistently increased over time. However, it is important to note that the recovery momentum of the market is going to open a lot of opportunities for growth in the coming months. As retail traders return to the market, it is expected that penny stocks will witness a surge in volume as a result. A Morgan Stanley report from last year outlined that these traders account for nearly 10% of the daily trading volume on the Russell 3000, the broadest stock index in the US. In 2021, stocks popular with retail traders in the US outperformed the benchmark S&P 500.
Penny trades, on the whole, remained loaded with risk. Despite the risks, we anticipate a turnaround in the penny stock market in the near future. The US Federal Reserve is likely to implement expansionary measures as the economy recovers from its peak inflation, which might lead to a surge in penny stock prices. Therefore, we have put together a list of some of the best penny stocks to buy now that have the potential for development due to solid business fundamentals and growth catalysts.
Our Methodology
In order to identify the best penny stocks to buy now, we looked for profitable businesses that were priced under $5, as of December 20. We limited our search to businesses with a bullish market sentiment and robust product pipelines. We have listed each stock's analyst ratings, hedge fund sentiment, and key characteristics that make it a good investment choice. To rank the top penny stocks, we analyzed Insider Monkey's database of 920 hedge funds as of Q3 2022.
11. Muscle Maker, Inc. (NASDAQ:GRIL)
Number of Hedge Fund Holders: 1
Share Price as of December 20: $0.85
Muscle Maker, Inc. (NASDAQ:GRIL) is a restaurant chain. The company sells salads, sandwiches, drinks, pastas, snacks, and meals to customers in the United States. This December, Pokemoto, the developing Hawaiian poke bowl restaurant concept by Muscle Maker, Inc. (NASDAQ:GRIL), announced the signing of its first franchise contract in Northern California. With this agreement, the brand will expand its market reach to 16 states. The Sonoma and Marin counties will be the main focus of the franchise agreement in Northern California.
At the close of the third quarter of 2022, 1 hedge fund held stakes in Muscle Maker, Inc. (NASDAQ:GRIL). The total value of these stakes amounted to $98,000.
Unlike big companies like Apple Inc. (NASDAQ:AAPL), Colgate-Palmolive Company (NYSE:CL), and Amazon.com, Inc. (NASDAQ:AMZN), Muscle Maker, Inc. (NASDAQ:GRIL) is one of the riskier investments available, particularly given the current market climate. However, the future benefits could be substantial.
10. Sunworks, Inc. (NASDAQ:SUNW)
Number of Hedge Fund Holders: 5
Share Price as of December 20: $2.10
Sunworks, Inc. (NASDAQ:SUNW), one of the finest penny stocks to buy now, offers services for the development and operation of solar energy plants. As of December 20, the stock is trading at $2.10 a share. On November 8, Sunworks, Inc. (NASDAQ:SUNW) posted earnings for the third quarter of 2022. The revenue over the period was $40.71 million, up 30.4% compared to the revenue over the same period last year. The company had $14.5 million in cash at the conclusion of the third quarter to fund its continued expansion.
Analysts like the stock. On December 12, EF Hutton analyst Tim Moore took coverage of Sunworks, Inc. (NASDAQ:SUNW) with a Buy rating and a $5 price target. The analyst noted that the company’s acquisition of Solcius, a solar energy company in Provo, Utah, reduced its dependency on agriculture end markets and "vastly increased" its sales to more lucrative residential consumers.
5 hedge funds in Insider Monkey’s database had Sunworks, Inc. (NASDAQ:SUNW) in a bullish position at the end of the third quarter of 2022. These hedge funds held shares in the firm worth about $2.5 million. Citadel Investment Group, with a position worth $1.3 million, stood as the most significant shareholder of Sunworks, Inc. (NASDAQ:SUNW).
9. Bionano Genomics, Inc. (NASDAQ:BNGO)
Number of Hedge Fund Holders: 7
Share Price as of December 20: $1.80
Bionano Genomics, Inc. (NASDAQ:BNGO), based in San Diego, California, provides a platform to analyze the long segments of genomic DNA. The company is one of the finest penny stocks to buy now and is trading at $1.80 per share, as of December 20. On November 23, Bionano Genomics, Inc. (NASDAQ:BNGO) disclosed that it has reached an agreement to pay $64 million to acquire Purigen Biosystems, a biotechnology company. This acquisition is anticipated to increase the company’s sample preparation portfolio capabilities to create an end-to-end solution for the adoption of Optical Genome Mapping (OGM).
This December, BTIG analyst Mark Massaro started coverage of Bionano Genomics, Inc. (NASDAQ:BNGO) with a Buy rating and a $3.50 price target. According to the analyst, the company provides a sophisticated approach to precisely identify structural variation and changes in chromosomes.
By the end of the third quarter, Bionano Genomics, Inc. (NASDAQ:BNGO) was part of 7 hedge fund portfolios. The consolidated stakes these funds had in the company were worth $5.5 million, down from $7.9 million the prior quarter.
8. Sorrento Therapeutics, Inc. (NASDAQ:SRNE)
Number of Hedge Fund Holders: 10
Share Price as of December 20: $1.03
Sorrento Therapeutics, Inc. (NASDAQ:SRNE), a biopharmaceutical company, is one of the best penny stocks to buy now. This December, Sorrento Therapeutics (NASDAQ:SRNE) announced that the US Food and Drug Administration (FDA) has given the company permission to begin clinical trials with its next generation mRNA vaccine against Omicron variants.
On November 2, Cantor Fitzgerald analyst Brandon Folkes started coverage of Sorrento Therapeutics, Inc. (NASDAQ:SRNE) with an Overweight rating and a $5 price target. The analyst noted that the company has the capacity to produce numerous best-in-class products in the fields of oncology, pain, and infectious diseases.
D E Shaw owned roughly $7.9 million worth of stakes in Sorrento Therapeutics, Inc. (NASDAQ:SRNE), becoming the company’s leading stakeholder in Q3 2022. Overall, 10 hedge funds tracked by Insider Monkey owned stakes in the company in Q3, growing from 6 in the previous quarter. These stakes hold a combined value of over $13.9 million.
7. Ring Energy, Inc. (NYSE:REI)
Number of Hedge Fund Holders: 10
Share Price as of December 18: $2.21
Ring Energy, Inc. (NYSE:REI) is an oil and natural gas exploration and production company. The company currently operates in the Permian and Mid-Continent regions of the United States. It is one of the premier penny stocks to buy now. In November, Ring Energy, Inc. (NYSE:REI) posted earnings for the third quarter of 2022, reporting an EPS of $0.28, beating market estimates by $0.04. The revenue over the period was $94.4 million, up 91.2% compared to the revenue over the same period last year.
Two Sigma Advisors owned roughly $4.1 million worth of stakes in Ring Energy, Inc. (NYSE:REI), becoming the company’s leading stakeholder in Q3 2022. Overall, 10 hedge funds tracked by Insider Monkey owned stakes in the company in Q3, growing from 9 in the previous quarter. These stakes hold a combined value of over $12.2 million.
6. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 12
Share Price as of December 20: $1.23
Canoo Inc. (NASDAQ:GOEV) is an electric vehicle company. Cars, minibuses, and commercial vehicles are the company's area of expertise for rental services. On November 21, Tony Aquila, the CEO of Canoo Inc. (NASDAQ:GOEV), bought 4.5 million shares of common stock for a total transaction value of $5.0 million. After the disclosure of insider buying activity, shares of Canoo Inc. (NASDAQ:GOEV) soared to a double-digit gain.
This November, R.F. Lafferty analyst Jaime Perez slashed his price target on Canoo Inc. (NASDAQ:GOEV) stock to $6 from $15 and reiterated a Buy rating on the shares.
By the end of the third quarter Canoo Inc. (NASDAQ:GOEV) was part of 12 hedge fund portfolios. The consolidated stakes these funds had in the company were worth $3.4 million, down from $7.2 million the prior quarter.
Like Apple Inc. (NASDAQ:AAPL), Colgate-Palmolive Company (NYSE:CL), and Amazon.com, Inc. (NASDAQ:AMZN), elite hedge funds are closely monitoring Canoo Inc. (NASDAQ:GOEV).
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Disclosure. None. 11 Best Penny Stocks to Buy Now is originally published on Insider Monkey.
As an expert and enthusiast, I don't have personal experiences or opinions, but I can provide you with information on the concepts mentioned in the article you shared. Let's dive into the details!
Penny Stocks:
Penny stocks are securities that trade for less than $5 per share. They are often considered riskier and more volatile than large-cap equities. The majority of penny stocks have had a challenging year, and overall perception towards investing in them has been negative. This lack of interest can be attributed to macro uncertainties such as inflation, supply-demand imbalances, and rising interest rates [[1]].
Large-Cap Equities:
Large-cap equities refer to stocks of companies with a large market capitalization. These companies are typically well-established and have a significant market presence. Examples of large-cap equities mentioned in the article include Apple Inc. (NASDAQ:AAPL), Colgate-Palmolive Company (NYSE:CL), and Amazon.com, Inc. (NASDAQ:AMZN) [[1]].
Market Rebounds and Opportunities:
A Bloomberg survey suggests that the predicted 10% gain for stocks in 2023 would fall short of previous market rebounds. However, some analysts see potential opportunities in high-quality US large-cap equities with consistent dividend payments. The recovery momentum of the market is expected to open up opportunities for growth in the coming months. As retail traders return to the market, it is anticipated that penny stocks will witness a surge in volume [[1]].
Retail Traders and Penny Stocks:
Retail traders, who are individual investors trading for their own accounts, play a significant role in the stock market. According to a Morgan Stanley report, retail traders accounted for nearly 10% of the daily trading volume on the Russell 3000, the broadest stock index in the US. In 2021, stocks popular with retail traders in the US outperformed the benchmark S&P 500. The return of retail traders to the market is expected to impact the volume and performance of penny stocks [[1]].
Potential Turnaround in Penny Stock Market:
Despite the risks associated with penny stocks, there is anticipation of a turnaround in the near future. The US Federal Reserve is likely to implement expansionary measures as the economy recovers from peak inflation, which might lead to a surge in penny stock prices. This expectation is based on the assumption that expansionary measures could positively impact the overall market and potentially benefit penny stocks [[1]].
Now that we have covered the concepts mentioned in the article, let me know if there's anything specific you would like to explore further or if you have any other questions!
