In this article, we discuss the 10 best penny stocks to invest $100.
The iShares Micro-Cap ETF (NYSEARCA:IWC) has lost 19% of its value so far this year. The Fund aims to replicate the investment performance of an index made up of US micro-cap stocks. Over the past two quarters, many penny stocks have experienced a decline of over 50%. These corrections offer investors a chance to take a medium- to long-term position in these stocks. Several penny stocks are currently trading at discounted valuations which appear to be worthwhile investments.
The financial health of micro- or small-cap companies is not as strong as mid- or large-cap organizations such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Advanced Micro Devices (NASDAQ:AMD) that investors widely hold. Hence, these companies have a higher probability of going under during an economic downturn. On the flip side, the micro- or small-cap companies are in their infancy and offer greater earnings growth potential than established corporations.
When Amazon.com, Inc. went public in May 1997, it had a market capitalization of $438 million only. The stock traded at nearly $2 at the time of its IPO. After two-and-a-half decades, the market capitalization of the Washington-based diversified technology conglomerate has risen to $1.46 trillion, reflecting an increase of 3,332 times from its IPO value. An investment of $100 in Amazon.com, Inc. in 1997 would have been worth $333,233 right now. Buying the stock at that time was significantly riskier as compared to purchasing it in 2022. Still, many investors saw the potential in the e-commerce giant and made a fortune. Meanwhile, if you had invested $100 in the SDPR S&P 500 ETF Trust (NYSEARCA:SPY), the investment would have grown only four times during the quarter of a century.
The US stock market has shown some signs of stability following the sell-off in June. However, complete recovery could take time as uncertainty looms. The Federal Reserve has to decide on how to proceed with further interest rate hikes to control inflation without significantly hampering growth. Following the July CPI data, analysts believe a bullish sentiment is developing amongst the investors. Experts think this could be the right time to enter the market before the complete bull market returns, making it challenging for investors to get an attractive entry point.
Our Methodology
We picked penny stocks that have long-term growth catalysts. These stocks are some of the ideal investment choices for beginner investors with budgets as little as $100. The analysis has been supplemented with analyst ratings and hedge fund sentiment based on Insider Monkey’s database of 912 elite funds as of Q1 2022. All the stocks included have a share price of less than $5 as of August 16. These penny stocks hold the potential to generate strong returns that outperform the market in the long run.
Best Penny Stocks to Invest $100
10. Vizsla Silver Corp. (NYSE:VZLA)
Stock Price as of August 16: $1.25
Number of Hedge Fund Holders: 3
Vizsla Silver Corp. (NYSE:VZLA) is a Vancouver, Canada-based gold and silver exploration company with operations in the Panuco region situated in southern Sinaloa, Mexico. The region is 100% owned by Vizsla Silver Corp. and represents one of the highest-grade silver discovery locations around the globe.
The demand for silver is on the rise due to its demand in the renewable energy sector and in the manufacturing of electronics and jewelry. For the first time in six years, there was a physical shortage of silver in the market in 2021. In a research note issued to investors on July 28, Heiko Ihle at H.C. Wainwright initiated coverage on Vizsla Silver Corp. stock with a Buy rating and a target price of $1.60. The target price provides a potential upside of over 22% from the closing price as of August 16. The analyst believes that Vizsla Silver Corp. is making fast progress on its completely owned Panuco gold-silver project. Ihle added that the resource provides Vizsla Silver Corp. with a “strong foundation for increased value.” Furthermore, the project also has good power and road access, making the analysts bullish on its growth prospects.
Vizsla Silver Corp. was held by 3 hedge funds at the end of Q1 2022.
9. Bionano Genomics, Inc. (NASDAQ:BNGO)
Stock Price as of August 16: $3.32
Number of Hedge Fund Holders: 6
Bionano Genomics, Inc. (NASDAQ:BNGO) is a San Diego, California-based provider of genome analysis and software solutions. Recent publications have shed light on the importance of optical genome mapping (OGM) in understanding genetically-driven disorders.
Bionano Genomics, Inc. is a provider of OGM through its proprietary Saphyr system. It is the only product on the market today employing the OGM system. OGM is a replacement for the labor and time-intensive Southern blot system in determining genetic variation and function. Bionano Genomics, Inc. has a strong product that could play an integral role in genome analysis and generate a healthy profit from the increasing footprint of the genetic medicines and research market. In a research note issued on July 18, Francois Brisebois at Oppenheimer gave Bionano Genomics, Inc. stock a target price of $12 with an Outperform rating.
Renaissance Technologies raised its stake in Bionano Genomics, Inc. by 3262% during the second quarter of 2022.
8. Mind Medicine (MindMed) Inc. (NASDAQ:MNMD)
Stock Price as of August 16: $0.70
Number of Hedge Fund Holders: 6
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) is a New York-based biotech company that is involved in the development of psychedelic medicines called psychoplastogens. These medicines are used to address addiction and mental illnesses.
On August 10, Charles Duncan at Cantor Fitzgerald initiated coverage on Mind Medicine (MindMed) Inc. stock with an Overweight rating and a target price of $3. The analyst believes that the drug pipeline of Mind Medicine (MindMed) Inc. is underappreciated by investors. MM-120, or Lysergic Acid Diethylamide (LSD), is the lead candidate of the company. The drug is a psychedelic hallucinogenic with an active hallucinatory period of 8 to 14 hours. The company intends to use micro doses to treat attention deficit/hyperactivity disorder (ADHD) and general anxiety disorder (GAD). Mind Medicine (MindMed) Inc. is well endowed in terms of liquidity to carry the study into Phase 2 trials by the second half of 2023.
Millennium Management was the leading hedge fund investor in Mind Medicine (MindMed) Inc. during the second quarter of 2022.
7. Eos Energy Enterprises, Inc. (NASDAQ:EOSE)
Stock Price as of August 16: $1.87
Number of Hedge Fund Holders: 9
Eos Energy Enterprises, Inc. (NASDAQ:EOSE) is an Edison, New Jersey-based renewable energy company that is overcoming the shortcomings of the lithium-ion battery through its proprietary Znyth aqueous zinc battery.
Eos Energy Enterprises, Inc. manufactures these batteries completely in the US. The company would be a beneficiary of the Inflation Reduction Act (IRA) or the Clean Energy Bill, unveiled in early August 2022. Following the Q2 2022 results published on August 2, Christopher Souther at B. Riley maintained a Buy rating on Eos Energy Enterprises, Inc. stock with a target price of $6. The target price reflects an upside of over 159% from the closing price as of August 16.
Analysts see the company on a strong growth trajectory. During Q2 2022, Eos Energy Enterprises, Inc. saw a jump in orders backlog from $212.4 million to $457.3 million. Furthermore, the company has a potential pipeline of products worth $7 billion as of August 2022.
At the end of the first quarter of 2022, 9 hedge funds held a stake worth $8.2 million in Eos Energy Enterprises, Inc..
6. Geron Corporation (NASDAQ:GERN)
Stock Price as of August 16: $2.19
Number of Hedge Fund Holders: 11
Geron Corporation (NASDAQ:GERN) is a Menlo Park, California-based late-stage biotech company developing and commercializing therapeutics that target the suppression of telomerase in cancer patients. This is the next stage of cancer treatment as telomerase is responsible for uncontrolled cell proliferation and tumor transformation.
On July 28, Kalpit Patel at B. Riley resumed coverage on Geron Corporation stock with a target price of $4 and a Buy rating. The analyst has based his investment thesis on the successful approval of imetelstat, which is the lead asset of the entity targeted toward the treatment of myelofibrosis and lower-risk myelodysplastic syndrome (MDS). Patel added that although Geron Corporation stock has outperformed the biotech index since the start of 2022, the stock still offers more upside potential in January 2023 following the topline results of the IMerge Phase 3 trial.
Out of the 912 hedge funds in Insider Monkey’s database, 11 funds held a stake in Geron Corporation as of Q1 2022, up from 6 in the preceding quarter.
Popular stocks such as Amazon.com, Inc., Apple Inc., and Advanced Micro Devices have also traded in the penny-stock range in the past. An investment of $100 in these companies at the right time could have generated exponential returns. If penny stocks like Geron Corporation manage to execute their growth plans successfully like these big-cap companies, investors would be able to reap significant returns.
5. Uranium Energy Corp. (NYSE:UEC)
Stock Price as of August 16: $3.43
Number of Hedge Fund Holders: 12
Uranium Energy Corp. (NYSE:UEC) is a Corpus Christi, Texas-based uranium corporation.
The company owns over 1.7 million pounds of uranium with a market value of roughly $82 million, 15 million shares of Uranium Royalty Corp. (NASDAQ:UROY) with a market value of over $40 million, and also has ownership and mining rights to several uranium mines.
In late July, Uranium Energy Corp. revealed its plans to acquire UEX Corporation (OTC:UEXCF). The acquisition will aid Uranium Energy Corp in doubling its uranium resources in politically stable jurisdictions. The company will also continue to be a beneficiary of the higher physical inventory required by Sprott Physical Uranium Trust Fund (OTC:SRUUF). The uranium industry is in a strong position to increase its market share as governments and corporations worldwide are working on decarbonizing the environment by lowering carbon emissions. This will play to Uranium Energy Corp.’s (NYSE:UEC) advantage.
Uranium Energy Corp. was held by 12 hedge funds as of Q1 2022.
4. Compugen Ltd. (NASDAQ:CGEN)
Stock Price as of August 16: $1.34
Number of Hedge Fund Holders: 13
Compugen Ltd. (NASDAQ:CGEN) is an Israeli clinical-stage biotech company working on developing a widely applicable, predictive computational discovery platform to identify the efficacy of new drugs in cancer patients.
On August 8, Reni Benjamin at JMP Securities assigned Compugen Ltd. a target price of $4 and maintained an Outperform rating on the stock. The company dissolved its partnership with Bristol-Myers Squibb Company (NYSE:BMY) to gain independence and flexibility in pursuing its own strategy for a certain class of assets. In January, Compugen Ltd. also gained a US patent for its lead candidate, COM701. Analysts think that Compugen Ltd. has a first mover advantage which will allow the company to retain its leadership position amongst its competitors.
Overall, 13 hedge funds held a stake in Compugen Ltd. as of Q1 2022.
3. POET Technologies Inc. (NASDAQ:POET)
Stock Price as of August 16: $3.38
POET Technologies Inc. (NASDAQ:POET) is involved in the production of photonic chips. By utilizing its Optical Interposer technology, the company aims to become the market leader in the photonics market.
The company’s first offerings include datacenter-useable 100G, 200G, 400G, and 800G chips introduced within this and the next year. Due to the enormous demand for these speeds, these products will serve as POET Technologies Inc.’s (NASDAQ:POET) major source of revenue. While other well-known companies like Intel are still searching for these technologies, POET Technologies Inc. will offer processors with speeds of 1.6 T/s, 3.2 T/s, and 6.4 T/s.
POET Technologies Inc. also has the potential to significantly increase the production levels due to its joint venture with one of China’s leading LED chip manufacturers, SANAN Optoelectronics Co. Furthermore, POET Technologies Inc.’s (NASDAQ:POET) revenue is expected to reach nearly $130 million by the end of 2025, based on the demand for its products from 10 clients.
2. BioLargo, Inc. (OTC:BLGO)
Stock Price as of August 16: $0.19
BioLargo, Inc. (OTC:BLGO) engages in the development of sustainable cleantech solutions.
The Tennessee-based engineering division of BioLargo, Inc. has been collaborating with Ultra Safe Nuclear to help create the first prototype fuel production system for the ground-breaking new Micro Modular Reactor. BioLargo, Inc. has so far received contracts worth around $500,000 from Ultra Safe Nuclear.
On August 11, the company reported that it had inked a deal with a new channel partner to sell BioLargo Inc’s (OTCQB:BLGO) PFAS treatment technology and technical support services. Furthermore, BioLargo Inc has landed its first client to build a thorough PFAS mitigation strategy for an industrial site. The company’s future looks bright with important projects in the pipeline.
In Q2 2022, BioLargo Inc reported revenue of $1.3 million, reflecting an increase of 37% from the preceding quarter and a jump of over 180% from the same quarter last year.
1. Pitney Bowes Inc. (NYSE:PBI)
Stock Price as of August 16: $3.44
Number of Hedge Fund Holders: 20
Pitney Bowes Inc. (NYSE:PBI) is a Stamford, Connecticut-based mailing and shipping company that provides financial services, logistics, and technology to more than 90% of the Fortune 500 companies.
The company has the distinction of being a certified “work-share partner” for the United States Postal Service (USPS) and aids the government agency in sorting and processing over 15 billion mail annually. Pitney Bowes Inc. also provides e-commerce solutions and offers an attractive forward dividend yield of 5.8% as of August 16. Experts believe that despite the economic uncertainty, the company’s 5.8% dividend yield is well secured due to the solid cash flows.
Pitney Bowes Inc. stock is currently trading at a forward P/E multiple of 7.4 times. Experts believe that the stock should trade at a forward multiple of at least 10x, keeping in view the company’s growth potential.
You can also take a peek at the 10 Stocks That Billionaire Rob Citrone Is Selling and 9 Tech Stocks that Cathie Wood is Giving Up On.
Follow Insider Monkey on Twitter
Suggested Articles:
- 6 Favorite Stock Picks of Munir Javeri’s 3G Sahana Capital Management
- 7 Energy Stocks to Buy Now According to Billionaire Leon Cooperman
- 10 Healthcare Stocks to Buy Now According to Billionaire Larry Robbins
This article is originally published at Insider Monkey.
