In this article, we discuss the 10 penny stocks Redditors are buying in August. If you want to skip our detailed analysis of these stocks, go directly to the 5 Penny Stocks Redditors are Buying in August.
Retail investors, who use internet platforms like Reddit for stock research purposes, now control close to one-fifth of the total volume on the stock market. The investment choices of these amateurs have resulted in unprecedented trading activity around volatile offerings over the past few months. On August 11, Mani Mahjouri, the chief investment officer of Blueshift Asset Management, a New Jersey-based investment firm with close to $1 billion in assets under management, told news publication Bloomberg that retail investor interest in volatile trades had contributed heavily to the underperformance of quant hedge funds.
This tectonic shift in the investing world, where high-risk plays undermine short-sellers, is evident by the billions in losses that several big hedge funds have suffered since the beginning of this year. Bloomberg reports that the rise of the Reddit generation has led to a record fifth straight quarterly loss for the Dow Jones market-neutral index for defensive strategy. The index was down 33% at the end of the second quarter of 2021, the biggest decline in over a decade. Compared to this, a group of most-shorted stocks in the US, maintained by investment bank Goldman Sachs, has outperformed the market by 31 percentage points.
There is little doubt that Reddit has morphed from a social media site into a platform of key interest for those interested in equity investments. Some of the stocks presently popular on Reddit include Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP), among others. However, in addition to these pricey firms, there are several penny stocks popular on the forum as well, some of which are discussed in detail below. The influx of retail investors on the market has transformed Wall Street, benefiting some to the detriment of others.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Our Methodology
With this context in mind, here is our list of the 10 penny stocks Redditors are buying in August. These were ranked keeping in mind the analyst ratings and basic business fundamentals of each firm so as to separate the best from the rest. In addition, special importance was assigned to the popularity of each stock on Reddit, mostly with the help of research filters of Reddit. Using data from the 866 funds tracked by Insider Monkey, these were then listed in ascending order according to the number of hedge fund holders.
Penny Stocks Redditors are Buying in August
10. CohBar, Inc. (NASDAQ: CWBR)
Number of Hedge Fund Holders: N/A
Price as of August 12, 2021: $1.62 per share
CohBar, Inc. (NASDAQ: CWBR) is placed tenth on our list of 10 penny stocks Redditors are buying in August. The firm is headquartered in California and operates as a biotechnology company focusing on the development of mitochondria based therapeutics for the treatment of age-related diseases. The share price of the company has been soaring this week after it released positive topline results from an early stage study into CB4211, a drug under development for the treatment of nonalcoholic steatohepatitis.
On August 11, investment advisory WBB Securities upgraded CohBar, Inc. (NASDAQ: CWBR) stock to Buy from Speculative Buy with a price target of $5, noting the positive topline results from a study into a drug developed by the firm for the treatment of obesity.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in CohBar, Inc. (NASDAQ: CWBR) with 544,511 shares worth more than $741,000.
Just like Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP), CohBar, Inc. (NASDAQ: CWBR) is one of the stocks Redditors are buying in August.
9. Ocean Power Technologies, Inc. (NYSE: OPTT)
Number of Hedge Fund Holders: 2
Price as of August 12, 2021: $2.07 per share
Ocean Power Technologies, Inc. (NYSE: OPTT) is ranked ninth on our list of 10 penny stocks Redditors are buying in August. The firm is based in New Jersey. It develops and sells systems that generate electricity using energy from ocean waves. The services marketed by the firm, which include communications systems for remote locations, are used by businesses such as the oil and gas industry, the defense and security market, and the communications sector. It was founded in 1984 and has a market cap of over $110 million.
In earnings results for the fourth fiscal quarter, posted on July 19, Ocean Power Technologies, Inc. (NYSE: OPTT) reported earnings per share of -$0.10 and a revenue of $0.6 million, up more than 9% compared to the revenue over the same period in the previous year.
At the end of the first quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $59,000 in Ocean Power Technologies, Inc. (NYSE: OPTT), the same as in the previous quarter worth $66,000.
In addition to Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP), Ocean Power Technologies, Inc. (NYSE: OPTT) is one of the stocks Redditors are buying in August.
8. Borqs Technologies, Inc. (NASDAQ: BRQS)
Number of Hedge Fund Holders: 3
Price as of August 12, 2021: $0.77 per share
Borqs Technologies, Inc. (NASDAQ: BRQS) is a Chinese firm that markets software services. It is placed eighth on our list of 10 penny stocks Redditors are buying in August. It was founded in 2007 and has a market cap of over $90 million. On August 11, the share price of the firm jumped 3% after it announced that it had signed a deal to develop solutions for blockchain application and payment firm Zippie. Under the terms of the agreement, Borqs will develop IoT autonomous payments with Zippie to meet demand for digital currency transactions.
On July 22, the share price of Borqs Technologies, Inc. (NASDAQ: BRQS) jumped more than 8% after it announced that it had agreed to a joint venture with a state government in China for the building of a 5G industrial park in the Huzhou region and was mulling bids for the purpose.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm PEAK6 Capital Management is a leading shareholder in Borqs Technologies, Inc. (NASDAQ: BRQS) with 203,034 shares worth more than $303,000.
Alongside Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP), Borqs Technologies, Inc. (NASDAQ: BRQS) is one of the stocks Redditors are buying in August.
7. Aethlon Medical, Inc. (NASDAQ: AEMD)
Number of Hedge Fund Holders: 3
Price as of August 12, 2021: $4.29 per share
Aethlon Medical, Inc. (NASDAQ: AEMD) is a California-based medical technology company. It is ranked seventh on our list of 10 penny stocks Redditors are buying in August. It was founded in 1999 and has a market cap of more than $74 million. Some of the products being developed by the firm include Aethlon Hemopurifier and TauSome, among others. The former is a device that removes viruses from the circulatory system and the latter is a biomarker to diagnose chronic traumatic encephalopathy.
On June 25, investment advisory HC Wainwright maintained a Buy rating on Aethlon Medical, Inc. (NASDAQ: AEMD) stock and raised the price target to $9 from $5, noting that the earnings showed the firm was prepared to ramp up programs in COVID-19 and cancer treatment.
At the end of the first quarter of 2021, 3 hedge funds in the database of Insider Monkey held stakes worth $681,000 in Aethlon Medical, Inc. (NASDAQ: AEMD), up from 1 in the previous quarter worth $41,000.
Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP) are some of the stocks Redditors are buying in August, alongside Aethlon Medical, Inc. (NASDAQ: AEMD).
6. Good Times Restaurants Inc. (NASDAQ: GTIM)
Number of Hedge Fund Holders: 3
Price as of August 12, 2021: $4.88 per share
Good Times Restaurants Inc. (NASDAQ: GTIM) is placed sixth on our list of 10 penny stocks Redditors are buying in August. The company is based in Colorado. It owns and manages the Good Times Burgers & Frozen Custard restaurants. It runs more than 60 restaurants, some of them licensed under the Bad Daddy’s Burger Bar name. On July 15, the firm reported that sales for the third fiscal quarter had increased by 2.9% year-on-year and 61% year-on-year under the Good Times and Bad Daddy brands respectively.
In earnings results for the third fiscal quarter, posted on August 11, Good Times Restaurants Inc. (NASDAQ: GTIM) reported earnings per share of $1.04 and a revenue of close to $34 million, up more than 39% compared to the revenue over the same period last year.
At the end of the first quarter of 2021, 3 hedge funds in the database of Insider Monkey held stakes worth $2.6 million in Good Times Restaurants Inc. (NASDAQ: GTIM), up from 2 in the preceding quarter worth $1.5 million.
Tesla, Inc. (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA), Alphabet Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), and Shopify Inc. (NYSE: SHOP) are some of the stocks Redditors are buying in August, in addition to Good Times Restaurants Inc. (NASDAQ: GTIM).
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Disclosure. None. 10 Penny Stocks Redditors are Buying in August is originally published on Insider Monkey.
