While the broader market has delivered rather tepid returns so far in 2016, there have been some stocks, like always, that have outperformed the benchmarks by a wide margin. By saying wide margin, we are not referring to stocks that are just a few extra percentage points above the benchmarks, but of stocks that have produced multi-fold, triple-digit returns. Unsurprisingly, most of the stocks that have achieved that feat in 2016 are those that started the year in the penny stock category (were trading at less than $1 per share) at the beginning of the year.
In this article, we’ll talk about five such penny stocks that have performed amazingly well this year and will also discuss what the hedge funds tracked by Insider Monkey thought about these stocks entering the second-half of 2016.
We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details).
#5 Great Panther Silver Ltd (NYSEMKT:GPL)
– Hedge Funds With Long Positions (as of June 30): 2
– Value of Hedge Funds’ Holdings (as of June 30): $4.63 Million
Let’s start with Great Panther Silver Ltd (NYSEMKT:GPL), shares of which were owned by two of the hedge funds in our system on June 30. Those funds enjoyed a strong second quarter for the stock, as the aggregate value of their holdings in it saw an increase of almost 65%, almost the same as the stock’s returns during the quarter. While shares of the silver mining firm have lost more than 26% of their value in the last six months, they are still trading up by 163.37% year-to-date. The company recently reported a 12% year-over-year decrease in quarterly silver production for the third quarter. Nevertheless, most analysts continue to remain bullish on the stock, citing Great Panther Silver Ltd (NYSEMKT:GPL)’s strong balance sheet and its conviction towards meeting its 2016 production guidance.
#4 Vista Gold Corp. (NYSEMKT:VGZ)
– Hedge Funds With Long Positions (as of June 30): 3
– Value of Hedge Funds’ Holdings (as of June 30): $29.53 Million
Vista Gold Corp. (NYSEMKT:VGZ)’s stock is up by 190.15% year-to-date despite losing more than half of its value since the start of the second-half of 2016. The number of hedge funds in our database that owned a stake in the company remained the same during the second quarter at three, while the aggregate value of their holdings in it jumped by over 400% during that time. On October 26, the Colorado-based gold mining company reported its third quarter results, declaring a net loss of $2.08 million for the period, which translates into a loss of $0.02 per share. For the same quarter of the previous year, Vista Gold Corp. (NYSEMKT:VGZ) had reported net income of $536,00, or $0.01 per share.
We’ll check out three more top performing penny stocks on the next page.