In this article, we discuss the 10 popular penny stocks on Robinhood.
According to the letter acquired by CNBC from Citadel Securities’ Institutional Equity Derivatives team, stocks selling below $1 per share recorded an average gain of roughly 80% in June 2020. Some of the significant market shifts can be attributed to retail investors’ widespread stock speculation, which favors riskier bets in lower dollar amounts. Retail investor growth has been fueled by commission-free and fractional trading.
Citadel Securities analyzed 29 stocks in the Russell 2000 small-cap benchmark with a share price under $1. The group gained an average of 79% during five trading days in June 2020. In contrast, the top 29 highest dollar stocks in the Russell 2000 futures climbed about 4% during the same time, implying that low dollar stocks outpaced high dollar stocks by 75%.
However, as investors rein in speculative bets and authorities tighten down on suspected fraud in penny stocks, trade-in unlisted US shares has declined about three-quarters from its peak at the height of last year’s retail trading craze. According to data from Finra, the US regulator for broker-dealers and exchanges, the number of “over-the-counter” equities trading fell for the 11th month in a row in January 2022. The overall number of deals was 70% lower than last February’s all-time high. At the peak of the pandemic, many of the riskiest sections of financial markets saw a boom in activity, with novice traders enticed by recovering asset prices, an escape from lockdown monotony, and government stimulus cheques.
According to Jason Paltrowitz, the executive vice-president of OTC Markets Group, which administers the key marketplace for over-the-counter equities, there has been a distinct “leveling off” in activity from investors who “just had extra money sitting around.” He did say, though, that activity was still higher than it was before the pandemic and that a “new normal” level would be maintained in the long run.
Robinhood Markets
For trading penny stocks, Robinhood Markets, Inc. (NASDAQ:HOOD) has become a famous online trading platform that allows commission-free stock trading and other tools to help secure financial security through investments. The California-based company also provides the facility to trade cryptocurrencies and exchange-traded funds (ETFs) through its platform. The company claims to have more than 22 million investors on its platform.
Last July, Robinhood Markets, Inc. stock went public for $38. Since the beginning of 2022, the stock has been on a downward trend. On May 6, the stock was trading at $10.12. Robinhood stock has plummeted 73.4% in less than a year. Robinhood Markets, Inc.’s (NASDAQ:HOOD) market capitalization has dropped from $32 billion to $6.81 billion as of June 10. Moreover, the platform’s monthly active users (MAU) saw a decline of 10% to 15.9 million in the first quarter of 2022. To counter this, the company has introduced several initiatives, including the addition of a number of cryptocurrencies as trading assets on the marketplace. Aside from these new assets, Robinhood Markets, Inc. has recently made an effort to entice retail investors to participate in the crypto price spike. Over 2 million consumers will receive a crypto wallet from the brokerage. Users can also utilize this wallet to trade cryptocurrency outside of Robinhood.
Stocks such as Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) are some of the popular stocks trending on Robinhood Markets, Inc..
Our Methodology
In this article, we will discuss ten popular penny stocks on Robinhood. We have analyzed the growth prospects and business fundamentals for each stock, in addition to the hedge fund sentiment. The hedge fund data is based on Insider Monkey’s database of 912 elite funds tracked at the end of Q1 2022.
Popular Penny Stocks on Robinhood
10. Waitr Holdings Inc. (NASDAQ:WTRH)
Stock Price as of June 10: $0.1668
Number of Hedge Fund Holders: 4
Waitr Holdings Inc. (NASDAQ:WTRH) is a Lafayette, Louisiana-based on-demand food ordering and delivery platform. The company is planning to transition its business to the cloud and reduce its cost by bringing in experienced restaurant industry expert Matthew Coy as its Chief Information Officer (CIO) in 2022. Coy has previously served as Vice President of technology at Donatos Pizza and has also performed the duties of Director of IT at Chipotle. This is the first time that the company has brought a CIO into the organizational structure. Before Coy’s hiring, Waitr Holdings Inc. hired its first Chief Technology Officer (CTO), Timothy Newton, in January 2022.
Daniel Kurnos at Benchmark gave Waitr Holdings Inc. a Buy rating in March following the company’s “soft” Q4 2021 results. The analyst shared that the company has managed to maintain a positive cash flow despite a difficult consumer environment. Kurnos expects the payment platform of Waitr Holdings Inc. to contribute approximately $10 million in revenue during this year at a greater margin.
Waitr Holdings Inc. is planning to rebrand itself as it is adding more categories to its delivery business. The company is considering venturing into the delivery of cannabis as it is becoming legal across various states in the US.
Waitr Holdings Inc. was held by 4 hedge funds as of Q1 2022. Leucadia National was the leading hedge fund investor in the company, with a stake worth over $1.44 million.
9. Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC)
Stock Price as of June 10: $1.250
Number of Hedge Fund Holders: 9
Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) is a biotech company with operations in Berkeley Heights, New Jersey, and Dundee. The company, founded by Dr. David Lane in 1996, is working on developing cancer treatments by using its expertise in the field of the cell cycle.
Cyclacel Pharmaceuticals, Inc. reported its Q1 2022 results on May 11. The loss per share was posted at 42 cents, beating the consensus estimate of 69 cents. Over the last three quarters, Cyclacel Pharmaceuticals, Inc. has successfully managed to surpass the consensus EPS estimates. The company also revealed that it finished the quarter with cash and cash equivalent of $29.6 million on March 31 as opposed to $36.6 million as of Q4 2022. According to Cyclacel Pharmaceuticals, Inc.’s (NASDAQ:CYCC) forecast, this balance will be enough to fund its planned programs until June 2023.
Cyclacel Pharmaceuticals, Inc. was held by 9 hedge funds as of Q1 2022.
8. Aurora Cannabis Inc. (NASDAQ:ACB)
Stock Price as of June 10: $1.480
Number of Hedge Fund Holders: 9
Aurora Cannabis Inc. (NASDAQ:ACB) is an Edmonton, Canada-based licensed integrated cannabis company with production, distribution, and sales operations spread across 25 countries. Aurora Cannabis Inc. is one of the largest and fastest-growing cannabis companies in the world that is at the forefront of a challenging industry.
On June 9, Aurora Cannabis Inc. was upgraded from a Sell to a Hold rating by Andrew Carter at Stifel. The analyst also increased the price target on Aurora Cannabis Inc. from C$2.15 ($1.69) to C$2.50 ($1.97). The revised target price provides a potential upside of over 33% from the most recent closing price. The analyst credited the improved liquidity position of the company as the reason for the upgrade.
Overall, 9 hedge funds held a stake in Aurora Cannabis Inc. as of Q1 2022.
7. Momentus Inc. (NASDAQ:MNTS)
Stock Price as of June 10: $3.080
Number of Hedge Fund Holders: 16
Momentus Inc. (NASDAQ:MNTS) is a California-based commercial space company offering transportation and related services. The company will become a part of the Russel Microcap Index after the market closes on June 24.
The stock is on a downward trend but provides an attractive opportunity to investors as the company is trying to find a way to deal with the “anomalies” in the first spacecraft developed and launched by Momentus Inc.. The spacecraft carried nine small satellites from three customers as part of its cargo. In a note issued to investors on May 23, Edison Yu at Deutsche Bank highlighted that Momentus Inc. stock could warrant a re-rating if it can deploy the customer payloads and the vehicle operates smoothly in space. The analyst has given the stock a Buy rating with a price target of $7.
As of Q1 2022, Momentus Inc. was held by 16 hedge funds.
6. Protalix BioTherapeutics, Inc. (NYSE:PLX)
Stock Price as of June 10: $1.1200
Number of Hedge Fund Holders: 2
Protalix BioTherapeutics, Inc. (NYSE:PLX) is an Israeli biotech company involved in the development and commercialization of therapeutics created by its proprietary ProCellEx plant-based protein expression system.
During Q1 2022, Protalix BioTherapeutics, Inc. experienced an increase in revenue by 42.1% YoY to $16.09 million and reported a GAAP loss per share of five cents. The company has already received approval from the US Food and Drug Administration (FDA) for the treatment of Gaucher disease. Moreover, Protalix BioTherapeutics, Inc. has two studies related to the treatment of Fabry disease through Pegunigalsidase alfa (PRX-102) that have completed the Phase-III trials. The trials have achieved significant milestones as the company prepares for BLA resubmission to the FDA.
Protalix BioTherapeutics, Inc. was held by 2 hedge funds at the end of Q1 2022.
In addition to Protalix BioTherapeutics, Inc., notable stocks such as Alphabet Inc., Microsoft Corporation, and Apple Inc. are also being traded on Robinhood.
5. Iveda Solutions, Inc. (NASDAQ:IVDA)
Stock Price as of June 10: $1.680
Iveda Solutions, Inc. (NASDAQ:IVDA) is a Mesa, Arizona-based provider of smart city digital transformation technologies that went public in April 2022.
In a note issued to investors on June 2, Allen Klee at Maxim initiated coverage on Iveda Solutions, Inc. stock with a Buy rating and a price target of $4. The analyst highlighted that the artificial intelligence (AI) backed video surveillance provided by Iveda Solutions, Inc. addresses the expanding markets of smart cities and the Internet of Things. Klee stated that the growth of Iveda Solutions, Inc. would be driven by strategic partners along with a trusted history with big cities and agencies.
4. Takung Art Co., Ltd. (NYSE:TKAT)
Stock Price as of June 10: $2.040
Number of Hedge Fund Holders: 1
Takung Art Co., Ltd. (NYSE:TKAT) is a Hong Kong-based provider of an online trading platform for art collectors and investors in calligraphies, jewelry, paintings, and precious gems. Takung Art Co., Ltd. is making its space in the booming Asian art industry and connecting artists with potential buyers.
Takung Art Co., Ltd. is diversifying further as it launched a non-fungible tokens (NFTs) website on April 29. The website would permit art collectors and investors to trade and discover exclusive digital art items stored on the blockchain. Within a week of its launch, the website had 60 products listed and added 107 new registered users, which resulted in 40 transactions. This reflects that Takung Art Co., Ltd. has a promising platform that could achieve sustainable growth if marketed efficiently.
As of Q1 2022, 1 hedge fund held a stake in Takung Art Co., Ltd..
3. Phio Pharmaceuticals Corp. (NASDAQ:PHIO)
Stock Price as of June 10: $0.7380
Number of Hedge Fund Holders: 3
Phio Pharmaceuticals Corp. (NASDAQ:PHIO) is a Marlborough, Massachusetts-based biotech company focused on developing innovative cancer treatments that overcome tumor immunosuppression.
During the 2022 American Society of Oncology (ASCO) annual meeting, Phio Pharmaceuticals Corp. presented the study outline for its Phase 1b clinical trial of a self-delivering RNAi for the treatment of advanced melanoma. During Q1 2022, Phio Pharmaceuticals Corp. reported a loss per share of 19 cents, beating the consensus estimates of 30 cents. Phio Pharmaceuticals Corp. finished the quarter with cash and cash equivalent of $20.5 million, which is sufficient to sustain its growth until Q2 2023.
Of the 912 hedge funds in Insider Monkey’s database, 3 funds held a stake in Phio Pharmaceuticals Corp. as of Q1 2022.
2. Hycroft Mining Holding Corporation (NASDAQ:HYMC)
Stock Price as of June 10: $1.260
Number of Hedge Fund Holders: 12
Hycroft Mining Holding Corporation (NASDAQ:HYMC) is a precious metals development company that owns the Hycroft Mine in Northern Nevada. The company had to seize its operations in late 2021 as it struggled with high levels of debt. Hycroft Mining Holding Corporation was facing high costs in transporting the output from its mine to offsite processing facilities.
However, Hycroft Mining Holding Corporation was injected with $27.9 million by AMC Entertainment Holdings, Inc. (NYSE:AMC) in exchange for a 22% stake in March. The company has the opportunity to use this capital injection to build a process plant near its mining facility, which is the base problem. The firm’s recent milestones include increasing underground reserves by 50% and mill capacity by 20%. Hycroft Mining Holding Corporation stock is up over 100% YTD.
Hycroft Mining Holding Corporation was held by 12 hedge funds during Q1 2022, up from 11 in the preceding quarter.
1. Mullen Automotive, Inc. (NASDAQ:MULN)
Stock Price as of June 10: $1.200
Number of Hedge Fund Holders: 4
Mullen Automotive, Inc. (NASDAQ:MULN) is a California-based electric vehicle manufacturing firm. The company is involved in the car dealership business through its subsidiary CarHub. Mullen Automotive, Inc. will be added to the Russel 2000 and 3000 Indexes from June 27. The company has an electric sports-utility vehicle that provides an estimated range of 325 miles and is also developing an interactive system called Persona to prevent vehicular theft.
Mullen Automotive, Inc. has already produced show cars for the FIVE variant and has bought a manufacturing facility outside of Tunica, Mississippi, where full-scale production will take place. The company intends to do a 19-city test-drive tour during the second half of the year. Mullen Automotive, Inc. is also trying to make space in the battery industry by introducing a battery with 600 miles of range. The company intends to use this battery in the second generation of FIVE, which will be rolled out in 2025 or 2026.
Mullen Automotive, Inc. was held by 4 hedge funds as of Q1 2022.
You can also take a peek at the 10 Mid-Cap Stocks Hedge Funds Are Talking About and 10 Best Roth IRA Stocks To Buy in 2022.
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This article is originally published at Insider Monkey.
