In this article, we discuss the 16 best penny stocks to buy now. If you want to read about some more penny stocks with strong business fundamentals, check out the 5 Best Penny Stocks to Buy Now.
Investors are taking refuge in holding cash and liquidating their stock portfolios to weather out the impact of rising interest rates as the inflation rate is showing little signs of slowing down. The US Federal Reserve chair Jerome Powell took a hawkish stance on combatting inflation and bringing it back to the 2% target by increasing benchmark interest rates as much as possible. On the other hand, the demand for labor has shown signs of growth as job openings in the US rose by 199,000 to 11.239 million in July 2022. Meanwhile, the job openings number for June 2022 was revised significantly from 10.698 million to 11.040 million. The monthly jobs report also revealed that, on average, for every unemployed person in July 2022, there were two jobs available in the market.
Some experts believe that such developments bring attractive buying opportunities for potential investors as past trends show that the market bounces back to new highs after hitting the bottom. Investors only need to catch this bottom through an intelligent investing strategy. The penny stocks with the most significant potential for capital growth have the support of many investors. Historically, a substantial amount of money has been made by investors who were quick to recognize the possibility of start-ups developing innovative products. Popular stocks such as Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Cassava Sciences, Inc. (NASDAQ:SAVA) also used to trade in the penny stock range in the past.
Our Methodology
We have categorized penny stocks as shares having a price of less than $5. We have shortlisted penny stocks that offer a unique growth story, have positive analyst ratings and have the capacity to generate healthy returns in the future. The stocks have been ranked according to the level of hedge fund ownership as of Q2 2022.
Best Penny Stocks to Buy Now
16. FlexShopper, Inc. (NASDAQ:FPAY)
Number of Hedge Fund Holders: 3
FlexShopper, Inc. (NASDAQ:FPAY) is a Florida-based omnichannel lease-to-own marketplace with an assortment of over 140,000 durable goods in its portfolio.
FlexShopper, Inc. (NASDAQ:FPAY) reported better-than-expected Q2 2022 results as revenue increased by 19.1% YoY to $36.54 million and surpassed the consensus forecast of $32.08 million. Meanwhile, the GAAP EPS of 51 cents outperformed the analysts’ forecast of a loss per share of six cents. With a recession around the corner, people would be interested in holding on to cash and investing less in durable goods, and this is where lease-to-own services come into play. Instead of renting goods and returning them at the end of the agreed term, customers get the opportunity to own the good in a lease-to-own agreement. Such a trend is likely to benefit a company like FlexShopper, Inc. (NASDAQ:FPAY).
15. Vizsla Silver Corp. (NYSE:VZLA)
Number of Hedge Fund Holders: 3
Vizsla Silver Corp. (NYSE:VZLA) is a Vancouver, Canada-based mineral exploration and development company.
Vizsla Silver Corp. (NYSE:VZLA) completely owns the Panuco silver-gold project situated in Sinaloa, Mexico. On July 28, Heiko Ihle initiated coverage on Vizsla Silver Corp. (NYSE:VZLA) stock with a Buy rating and a target price of $1.60. The target price reflects a potential upside of over 36% from the closing price as of September 7. The analyst believes that the company’s “maiden resource” provides Vizsla Silver Corp. (NYSE:VZLA) the ability to generate higher value and create a strong foundation for the future. The company’s Panuco project has excellent access to road and power facilities, which makes it more attractive to develop and explore.
As of Q2 2022, Vizsla Silver Corp. (NYSE:VZLA) was held by 3 hedge funds.
14. Bionano Genomics, Inc. (NASDAQ:BNGO)
Number of Hedge Fund Holders: 6
Bionano Genomics, Inc. (NASDAQ:BNGO) is a San Diego, California-based provider of the Saphyr platform that brings into use optical genome mapping (OGM) to analyze and detect genetic diseases.
Francois Brisebois at Oppenheimer assumed coverage on Bionano Genomics, Inc. (NASDAQ:BNGO) stock with an Outperform rating and a target price of $12 in a research note issued to investors on July 18. The stock reached an eight-month high in August 2022 after a study was published that highlighted the use of OGM as an alternative to Southern blot in analyzing some types of genetically driven disorders. The Southern blot has been considered the benchmark for detecting these disorders. However, it is a labor-intensive procedure and can be replaced by OGM down the line.
Renaissance Technologies increased its stake in Bionano Genomics, Inc. (NASDAQ:BNGO) by over 3000% during the second quarter of 2022.
13. OrganiGram Holdings Inc. (NASDAQ:OGI)
Number of Hedge Fund Holders: 6
OrganiGram Holdings Inc. (NASDAQ:OGI) is a Moncton, Canada-based parent company that owns entities that are licensed producers of cannabis and cannabis-related products in Canada.
Cannabis is gaining traction in the US as 38 states have approved the use of cannabis for medical purposes. Meanwhile, the District of Colombia and 18 other states have come up with measures to regulate the use of cannabis for recreational purposes among adults. The policies would be implemented by November. OrganiGram Holdings Inc. (NASDAQ:OGI) has an opportunity to address this growing market. The company already exports its products to Australia and Israel. Furthermore, OrganiGram Holdings Inc. (NASDAQ:OGI) added 29 new grow rooms in mid-July, which will produce 35,000 kilos of extra flowers every year.
Overall, 6 hedge funds held a stake in OrganiGram Holdings Inc. (NASDAQ:OGI) at the end of Q2 2022.
12. CuriosityStream Inc. (NASDAQ:CURI)
Number of Hedge Fund Holders: 6
CuriosityStream Inc. (NASDAQ:CURI) is a Silver Spring, Maryland-based content company that has a diverse range of documentary programming and provides a subscription-based streaming service.
On August 16, Daniel Kurnos at Benchmark gave CuriosityStream Inc. (NASDAQ:CURI) stock a target price of $8 with a Buy rating. The analyst highlighted that the company posted strong Q2 2022 results as subscribers increased by 25% YoY and reported revenue of $22.3 million, outperforming the analysts’ forecast of $21 million. Furthermore, CuriosityStream Inc. (NASDAQ:CURI) reported a 52% QoQ decline in cash burn. These positive developments warrant investors’ bullish stance on CuriosityStream Inc. (NASDAQ:CURI) stock.
Of the 895 hedge funds being tracked by Insider Monkey, CuriosityStream Inc. (NASDAQ:CURI) was held by 6 funds as of Q2 2022.
11. Gevo, Inc. (NASDAQ:GEVO)
Number of Hedge Fund Holders: 7
Gevo, Inc. (NASDAQ:GEVO) is an Englewood, Colorado-based producer of sustainable aviation fuel (SAF) that causes significantly less harm to the environment as compared to traditional fuel by generating lower carbon emissions.
Since mid-July, Gevo, Inc. (NASDAQ:GEVO) has reached an agreement with three leading airline companies to supply its SAF. These airlines are Aer Lingus, American Airlines Group Inc. (NASDAQ:AAL), and Alaska Air Group, Inc. (NYSE:ALK). Gevo, Inc. (NASDAQ:GEVO) will start to supply 143.3 million gallons to these entities from 2026 onwards, taking the total value of financeable SAF to over the 350 million gallons mark. In the most recent quarter, Gevo, Inc. (NASDAQ:GEVO) sold 9,000 gallons of SAF. The company would require a significant ramp-up in production levels to achieve the numbers committed to its partners.
Millennium Management raised its stake in Gevo, Inc. (NASDAQ:GEVO) by 1361% during Q2 2022.
10. OncoCyte Corporation (NASDAQ:OCX)
Number of Hedge Fund Holders: 9
OncoCyte Corporation (NASDAQ:OCX) is an Irvine, California-based diagnostic solution provider for lung cancer.
In a research note issued on August 11, Thomas Flaten at Lake Street gave OncoCyte Corporation (NASDAQ:OCX) stock a target price of $3 and reiterated a Buy rating. The stock price jumped significantly at the end of August after OncoCyte Corporation (NASDAQ:OCX) received an order for its DetermaRx test from the US Department of Veteran Affairs. The DetermaRx test is brought into use for the early detection of lung cancer in patients with a high probability of cancer reoccurrence. The US Department of Veteran Affairs is a care provider through its 1,293 healthcare facilities across the US.
At the end of Q2 2022, 9 hedge funds held a stake in OncoCyte Corporation (NASDAQ:OCX).
9. Gran Tierra Energy Inc. (NYSE:GTE)
Number of Hedge Fund Holders: 10
Gran Tierra Energy Inc. (NYSE:GTE) is a Calgary, Canada-based oil and gas exploration (E&P) company with operations in Colombia and Ecuador.
On August 10, Roman Rossi at Canaccord gave Gran Tierra Energy Inc. (NYSE:GTE) stock a Buy rating with a target price of $2.13 (C$2.80). The target price reflects a potential upside of over 54% from the closing price as of September 7.
On August 29, Gran Tierra Energy Inc. (NYSE:GTE) announced that it intends to buy back 10% of its public float as the share price does not reflect the true growth outlook of the company. Furthermore, Gran Tierra Energy Inc. (NYSE:GTE) is targeting to bring down its debt to under $400 million by the end of this year.
8. Finance Of America Companies Inc. (NYSE:FOA)
Number of Hedge Fund Holders: 11
Finance Of America Companies Inc. (NYSE:FOA) is a Plano, Texas-based multi-channel consumer lending company. The company provides a diverse range of lending products like commercial loans, home loans, reverse mortgages, and lender services.
Presently, Finance Of America Companies Inc. (NYSE:FOA) is under pressure due to a significant dip in mortgage origination volume due to rising interest rates. However, the company has initiated a restructuring plan that is expected to save $100 million annually. Finance Of America Companies Inc. (NYSE:FOA) has streamlined its operations and has slashed nearly 600 jobs between March 2021 and March 2022. Finance Of America Companies Inc. (NYSE:FOA) is experiencing an increase in the volume of reverse origination as it rose for the fifth consecutive quarter to $1.58 billion at the end of Q2 2022.
Adage Capital Management increased its investment in Finance Of America Companies Inc. (NYSE:FOA) by 40% during Q2 2022.
7. Bolt Biotherapeutics, Inc. (NASDAQ:BOLT)
Number of Hedge Fund Holders: 13
Bolt Biotherapeutics, Inc. (NASDAQ:BOLT), one of the best penny stocks to buy, is a San Francisco Bay Area, California-based biotech company that is developing innovative treatments against cancer by employing its proprietary platform.
Daina Graybosch at SVB Securities sees Bolt Biotherapeutics, Inc. (NASDAQ:BOLT) as a multi-bagger stock. The analyst gave the stock a target price of $4 in a research note issued on August 8. Graybosch expects a long path to recovery for the company as it discontinued one of its leading drug candidates, BDC-2034, which was expected to be in the clinic by early next year. However, experts see great potential in Bolt Biotherapeutics, Inc. (NASDAQ:BOLT) to develop innovative treatments and display strong growth in the future.
As of Q2 2022, Bolt Biotherapeutics, Inc. (NASDAQ:BOLT) was held by 13 hedge funds.
6. Pixelworks, Inc. (NASDAQ:PXLW)
Number of Hedge Fund Holders: 13
Pixelworks, Inc. (NASDAQ:PXLW) is a San Jose, California-based provider of video and pixel processing semiconductors and software. PXLW ranks 6th in our list of the best penny stocks to buy now.
Pixelworks, Inc. (NASDAQ:PXLW) recently agreed with a consortium of Chinese private equity investors to offer 2.73% equity in Pixelworks Semiconductor Technology (Shanghai), a subsidiary of Pixelworks, Inc., in exchange for nearly $12.9 million. Following this development, Pixelworks, Inc. (NASDAQ:PXLW) will still hold nearly 81% of the subsidiary. The agreement reflects a two-time rise in the valuation of the subsidiary in the last year and shows the major interest in the visual processing technology offered by Pixelworks, Inc. (NASDAQ:PXLW).
Similar to Pixelworks, Inc. (NASDAQ:PXLW), stocks such as Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Cassava Sciences, Inc. (NASDAQ:SAVA) were also considered penny stocks in the past.
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Disclose. None. 16 Best Penny Stocks to Buy Now is originally published on Insider Monkey.
