In this article, we will take a detailed look at the 12 Best Rising Penny Stocks To Buy. For a quick overview of such stocks, read our article 5 Best Rising Penny Stocks To Buy.
Stocks are roaring after Nvidia posted yet another strong quarter, crushing AI naysayers who were calling the stock overvalued and the AI wave a hype. More and more analysts are now seeing a soft landing for the economy, with some top economists saying the US would be able to avoid recession and achieve the 2% inflation target without high unemployment. This bodes well for smaller companies like penny, micro-cap and nano-cap stocks that usually get punished when markets are down and everyone is investing in established companies.
Why Should You Buy Stocks Amid Soft Landing Scenario in 2024
Buying more stocks has been the recommendation of many analysts and experts for a soft landing scenario. In November 2023, a Wall Street Journal report talked about how economists were growing confident about the economy’s ability to dodge recession. The report quoted Alessio de Longis, senior portfolio manager at Invesco, who said at the time that the soft landing possibility was “playing out” and we were in a “mini Goldilocks scenario.”
The WSJ report also said small-cap companies, which are more sensitive to higher borrowing rates, were trailing the S&P 500 in 2023 by the widest margin since 1998. But that was about to change according to some experts. The report cited BMO Wealth Management chief investment officer Yung-Yu Ma, who said small-cap stocks were expected to rally in 2024 amid expectations of lower rates and a stable economy.
If you find some experts and economists rejoicing the market’s rally in 2024 and soft landing, you would also find many still expecting recession and hard landing. What are the options for an average investor in this case? The best advice comes from top investing gurus who’ve seen it all. Legendary value investor Seth Klarman in 1999 wrote a letter to investors discussing the reasons behind his fund’s underperformance. What Klarman said at the time explains the essence of long-term investing involving patience and discipline:
“Occasionally we are asked whether it would make sense to modify our investment strategy to perform better in today’s financial climate. Our answer, as you might guess, is: No! It would be easy for us to capitulate to the runaway bull market in growth and technology stocks. And foolhardy. And irresponsible. And unconscionable. It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success. Baupost has employed a value approach to investing because it is, above all, risk averse, and focused on preserving capital over the long run. This approach demands both discipline and patience. Discipline is required to buy only bargains and sell fully-priced holdings, never becoming swept up in the enthusiasm of the herd. Patience is required to wait for just the right opportunities, avoiding the pressure to make investments that don’t meet the most stringent criteria of quality and under- valuation, and then to hold on, allowing an investment sufficient time to come to fruition. The stalwart performers of today’s stock market trade at higher valuations than any of the bull market favorites of yesteryear. The major stock market indices are, by virtually all measures, extremely overvalued. Never before have companies that have strung together a few years (or quarters) of earnings (or sales) growth been valued at such high multiples. And never before has the gap between the in-favor few and the out-of-favor many been so great. A few hundred in-favor growth stocks lift the market averages, while thousands of out-of-favor companies trade at bear market valuations. The disparity between the market favorites and everything else has never been greater.”
Photo by Ruben Sukatendel on Unsplash
Methodology
For this article we fist used a stock screener to identify penny stocks which have gained over 8% in the past 30 days and have Buy or better ratings. From these stocks we picked 12 penny stocks with the highest number of hedge fund investors. But why care about what hedge funds are doing? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
12. Grupo Televisa SAB ADR (NYSE:TV)
Number of Hedge Fund Investors: 13
Mexican mass media and entertainment company Grupo Televisa SAB ADR (NYSE:TV) ranks 12th in our list of the best rising penny stocks to buy now. In October 2023, Bank of America had upgraded the stock along with another company, saying these two companies were offering attractive entry point for investors. Grupo Televisa SAB ADR (NYSE:TV) shares have gained about 8% over the past one month.
As of the end of the fourth quarter of 2023, 13 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Grupo Televisa SAB ADR (NYSE:TV). The biggest stake in Grupo Televisa SAB ADR (NYSE:TV) is held by Bob Peck and Andy Raab’s FPR Partners which owns an $87 million stake in Grupo Televisa SAB ADR (NYSE:TV).
11. Compass Therapeutics Inc. (NASDAQ:CMPX)
Number of Hedge Fund Investors: 15
Boston, Massachusetts-based Compass Therapeutics Inc. (NASDAQ:CMPX) shares have gained about 17% over the past one month. The biopharmaceutical company focused on oncology treatments last month provided an update on its different projects. At the end of 2023 Compass Therapeutics Inc. (NASDAQ:CMPX) had $152 million in cash and marketable securities, which translates into cash runway through 2026.
As of the end of the fourth quarter of 2023, 15 hedge funds had stakes in Compass Therapeutics Inc. (NASDAQ:CMPX).
10. Angi Inc (NASDAQ:ANGI)
Number of Hedge Fund Investors: 16
Home services platform company Angi Inc’s (NASDAQ:ANGI) stock has gained about 22% over the past one month. Earlier this month Angi Inc (NASDAQ:ANGI) posted fourth quarter results. GAAP EPS in the quarter came in at $0.01, beating estimates by $0.03.
As of the end of the fourth quarter of 2023, 16 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Angi Inc (NASDAQ:ANGI). The most significant stake in Angi Inc (NASDAQ:ANGI) is owned by Jim Tarantino and Chris Galvin’s Westerly Capital Management which owns an $8.7 million stake in Angi Inc (NASDAQ:ANGI).
9. Cipher Mining Inc (NASDAQ:CIFR)
Number of Hedge Fund Investors: 16
Bitcoin mining data centers company Cipher Mining Inc (NASDAQ:CIFR) is one of the best rising penny stocks to buy now. Cipher Mining Inc (NASDAQ:CIFR) in January produced about ~371 BTC, a 20.4% decrease when compared to the previous month.
Over the past 30 days the stock has gained about 11%.
Out of the 933 funds tracked by Insider Monkey, 16 hedge funds had stakes in Cipher Mining Inc (NASDAQ:CIFR).
8. Heron Therapeutics Inc (NASDAQ:HRTX)
Number of Hedge Fund Investors: 16
Heron Therapeutics Inc (NASDAQ:HRTX) shares have gained about 16% over the past one month. In late January 2024, the stock jumped after the US FDA approved label expansion for the biotechnology company’s postoperative pain management solution, Zynrelef (bupivacaine and meloxicam). Earlier the stock has jumped about 16% on the news that Heron Therapeutics Inc (NASDAQ:HRTX) entered into an agreement with CrossLink Life Sciences to expand its sales network supporting its FDA-approved pain therapy Zynrelef.
As of the end of the fourth quarter of 2023, 16 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Heron Therapeutics Inc (NASDAQ:HRTX). The biggest stakeholder of Heron Therapeutics Inc (NASDAQ:HRTX) during this period was David Rosen’s Rubric Capital which Management which owns a $45 million stake in Heron Therapeutics Inc (NASDAQ:HRTX).
7. Cerus Corp (NASDAQ:CERS)
Number of Hedge Fund Investors: 17
Biotech company Cerus Corp (NASDAQ:CERS) shares have gained about 22% over the past one month.
As of the end of the fourth quarter of 2023, 17 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Cerus Corp (NASDAQ:CERS). The biggest stake in Cerus Corp (NASDAQ:CERS) is owned by Catherine D. Wood’s ARK Investment Management which owns a $45 million stake in Cerus Corp (NASDAQ:CERS).
6. Porch Group Inc (NASDAQ:PRCH)
Number of Hedge Fund Investors: 17
Software platform company Porch Group shares have gained about 13% over the past one month. Last month Porch Group Inc (NASDAQ:PRCH) said it signed a strategic business collaboration agreement with Aon Corp and Aon Re Inc.
Porch Group Inc (NASDAQ:PRCH) will get $25 million upfront and an expected approximately $5 million over the next four years.
As of the end of the fourth quarter of 2023, 17 hedge funds in Insider Monkey’s database had stakes in Porch Group Inc (NASDAQ:PRCH).
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Disclosure: None. 12 Best Rising Penny Stocks To Buy is originally published on Insider Monkey.