In this article, we discuss the 11 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.
Best Penny Stocks to Buy Now
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., 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.. The total value of these stakes amounted to $98,000.
Unlike big companies like Apple Inc., Colgate-Palmolive Company, and Amazon.com, Inc., Muscle Maker, Inc. 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. 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. 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. 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..
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. 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. 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. 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 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. 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., 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. 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., 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., 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. soared to a double-digit gain.
This November, R.F. Lafferty analyst Jaime Perez slashed his price target on Canoo Inc. stock to $6 from $15 and reiterated a Buy rating on the shares.
By the end of the third quarter Canoo Inc. 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., Colgate-Palmolive Company, and Amazon.com, Inc., elite hedge funds are closely monitoring Canoo Inc..
5. Geron Corporation (NASDAQ:GERN)
Number of Hedge Fund Holders: 16
Share Price as of December 20: $2.28
Geron Corporation (NASDAQ:GERN), located in Foster City, California, is a biotechnology company. The company makes cancer-treating drugs that block telomeras. In the third fiscal quarter, Geron Corporation reported revenue of $0.3 million, up 172.7% compared to the revenue over the same period last year.
On October 28, Wedbush analyst Robert Driscoll initiated coverage of Geron Corporation with an Outperform rating and a $5 price target. The analyst expects that the ongoing Phase 3 research in Lower Risk Myelodysplastic Syndrome (LRMDS) will produce encouraging top-line findings in early 2023. Geron Corporation’s strong growth prospects make it one of the best penny stocks to invest in.
As of November 22, 2022, RA Capital Management is the largest shareholder in Geron Corporation in our database and holds a stake worth more than $70.5 million.
4. Clover Health Investments, Corp. (NASDAQ:CLOV)
Number of Hedge Fund Holders: 17
Share Price as of December 20: $1.06
Clover Health Investments, Corp. (NASDAQ:CLOV), based in Franklin, Tennessee, is a physician enablement company. As of December 20, the stock is trading at $1.06 per share and is ranked high among the best penny stocks to buy now. Given its strong balance sheet, Clover Health Investments, Corp. has the potential to grow earnings in the long term. On August 9, the company posted earnings for the third quarter of 2022. The revenue over the period was $856.8 million, up 100.6% compared to the revenue over the same period last year.
Jason Cassorla, an analyst at Citi, decreased his price target on Clover Health Investments, Corp. stock from $3.50 to $1.80 on November 16 while maintaining a ‘Neutral’ recommendation on the stock.
The number of hedge funds tracked by Insider Monkey owning stakes in Clover Health Investments, Corp. grew to 17 in Q3 2022, from 11 in the previous quarter. The collective value of these stakes is nearly $19.7 million.
3. Ardelyx, Inc. (NASDAQ:ARDX)
Number of Hedge Fund Holders: 19
Share Price as of December 20: $1.96
Ardelyx, Inc. (NASDAQ:ARDX), one of the elite penny stocks to invest in, is a biopharmaceutical company. On November 17, shares of Ardelyx gained 40% when the FDA advisory panel approved tenapanor as a treatment for renal disease. Following this, Piper Sandler analyst Christopher Raymond upgraded Ardelyx, Inc. stock to Overweight from Neutral with a $8 price target.
Ardelyx, Inc. was a part of 19 hedge fund portfolios in Q3 2022, as per Insider Monkey’s data. The stakes owned by these hedge funds have a total value of over $42.4 million. Deep Track Capital was the company’s leading stakeholder in Q3.
2. Pitney Bowes Inc. (NYSE:PBI)
Number of Hedge Fund Holders: 22
Share Price as of December 20: $3.85
Pitney Bowes Inc. (NYSE:PBI) provides shipping, global e-commerce logistics, mailing, and financial services. As of 2021, the company serves about 750,000 customers globally. The company is ranked high among the best penny stocks to buy now. Given its financial stability and expansion prospects, the company has the potential to grow earnings in the long term. On November 4, Pitney Bowes Inc. declared a quarterly dividend of $0.05 per share, in line with the previous. The company’s dividend yield on December 20 came in at 5.19%.
At the close of the third quarter of 2022, 22 hedge funds held stakes in Pitney Bowes Inc.. The total value of these stakes amounted to $35.7 million. As of November 22, D E Shaw is the largest investor in Pitney Bowes Inc. and has a position worth $10 million.
1. Gossamer Bio, Inc. (NASDAQ:GOSS)
Number of Hedge Fund Holders: 33
Share Price as of December 20: $2.73
Gossamer Bio, Inc. (NASDAQ:GOSS) is a biopharmaceutical company. Its primary objective is to discover, develop, and market treatments for diseases related to inflammation, immunology, and oncology. On December 8, H.C. Wainwright analyst Patrick Trucchio maintained a Buy rating on Gossamer Bio, Inc. stock and lowered his price target to $5 from $25. Trucchio updated his price target because results from TORREY, a Phase 2 study to evaluate the efficacy and safety of inhaled seralutinib for the treatment of pulmonary arterial hypertension, fell short of expectations.
The number of hedge funds tracked by Insider Monkey owning stakes in Gossamer Bio, Inc. grew to 33 in Q3 2022, from 23 in the previous quarter. The collective value of these stakes is nearly $401 million. It is one of the top penny stocks to buy now according to elite hedge funds.
You can also take a peek at 10 Best Bargain Stocks To Buy Right Now and 10 Best Infrastructure Stocks To Buy Now.
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This article is originally published at Insider Monkey.
