In this article, we discuss the 10 penny stocks to buy in December.
Trade in penny stocks, especially in Over-the-Counter (OTC) markets, has exploded this year as a retail investor boom and a record surge in prices of cryptocurrencies propels trading volume in such securities to over $550 billion. Data released by OTC Markets Group suggests that the total volume for trades in 2020 was crossed in October this year, a full three months ahead of the end of the fiscal year. Cannabis companies, crypto trusts, and biotech firms have all contributed to this growth.
Since the start of 2020, individual investors, who often use internet platforms like Reddit, have burst onto the finance scene. These investors prefer to invest in small companies with explosive growth potential. One forum on Reddit, which is dedicated to penny stocks, has close to 2 million members and robust discussion forums. In addition to penny offerings, some other growth stocks popular on the platform include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), among others.
Some analysts believe that the surge in penny stock trading is a result of retail investor “boredom” in cryptocurrencies and meme stocks. Even though penny stocks can be useful for turning quick profits, just like meme stocks and crypto, they can also lead to more frauds. It is hard for analysts to gather accurate accounting and business data around small companies that trade in the penny domain. Tyler Gellasch, a former Securities and Exchange Commission official, likens the retail investor boom to the 1920s market, just before the Great Crash.
In February this year, at the height of the trades in OTC markets, there were close to 2 million OTC-related transactions, up more than 2,000% year-on-year. The trade in penny stocks has also been fueled by the rise of online trading platforms like Robinhood and the commission-free trading practices. Jordan Belfort, of The Wolf of Wall Street fame, described the phenomenon to The New York Times earlier this year as “a get rich quick” scheme. Belfort compared trades in OTC stocks to believing in Santa Claus, the Tooth Fairy and Bernie Madoff.
The influence of retail investors in penny trades can also be understood when viewed in context of a Morgan Stanley report earlier this year that outlined that these traders accounted for nearly 10% of the daily trading volume on the Russell 3000, the broadest stock index in the US. Nikolaos Panigirtzoglou, a global markets strategist at JPMorgan, has highlighted how a list of stocks popular with retail traders in the US outperformed the benchmark S&P 500 this year.
Our Methodology
The companies were identified by a general focus on high-growth areas like biotech, space, and tech-led disruption. Upcoming growth catalysts, analyst ratings, and business fundamentals of each stock were also considered in a bid to separate the best from the rest.
Readers are also provided with exclusive hedge fund sentiment data to better inform their investment choices. The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Photo by Austin Distel on Unsplash
Penny Stocks to Buy in December
10. Vicinity Motor Corp. (NASDAQ:VEV)
Number of Hedge Fund Holders: N/A
Vicinity Motor Corp. (NASDAQ:VEV) is a Canada-based automobile manufacturer that is ramping up investment in electric vehicles. William Trainer, the CEO of the firm, said during the third quarter earnings call that the firm had secured a new line of business through the EV chassis sales during 2021 that had solid growth potential heading into the new year.
On December 3, investment advisory Spartan Capital initiated coverage of Vicinity Motor Corp. (NASDAQ:VEV) stock with a Buy rating and a price target of $25. Barry Sine, an analyst at the advisory, issued the ratings update.
Vicinity Motor Corp. (NASDAQ:VEV) stock has rallied this year as strong sales momentum in North America leads to higher revenues. The company said in October that it planned to deliver over 130 classic buses this year.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), Vicinity Motor Corp. (NASDAQ:VEV) is one of the stocks on the radar of growth investors.
9. Lion Group Holding Ltd. (NASDAQ:LGHL)
Number of Hedge Fund Holders: 2
Lion Group Holding Ltd. (NASDAQ:LGHL) owns and runs a trading platform in Hong Kong. On November 18, the stock climbed over 10% after the company announced that it had signed a deal with New Full Rich, a digital mining firm, for investment in an encrypted digital currency mine project in Tajikistan.
Lion Group Holding Ltd. (NASDAQ:LGHL) has a market cap of $72 million and posted more than $10 million in revenue last year. The short interest on the stock is over 5% and the volume is 111,583.
At the end of the third quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $415,000 in Lion Group Holding Ltd. (NASDAQ:LGHL), the same as in the preceding quarter worth $608,000.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Lion Group Holding Ltd. (NASDAQ:LGHL) with 113,773 shares worth more than $143,000.
8. Palisade Bio, Inc. (NASDAQ:PALI)
Number of Hedge Fund Holders: 2
Palisade Bio, Inc. (NASDAQ:PALI) is a biopharma company based in Maryland. On December 8, the firm was granted a patent by authorities in the United States for LB1148, a drug product for the treatment of adhesions and postoperative ileus. The stock jumped close to 5% after the news was made public.
In August, Maxim analyst Naz Rahman had initiated coverage of Palisade Bio, Inc. (NASDAQ:PALI) stock with a Buy rating and a price target of $7, noting that the firm had multiple value-driving catalysts for the next few months.
At the end of the third quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $167,000 in Palisade Bio, Inc. (NASDAQ:PALI), compared to 3 in the preceding quarter worth $847,000.
7. Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN)
Number of Hedge Fund Holders: 2
Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN) is a specialty medical device firm. The stock has rallied in the past few months amid lots of buzz around the company on internet platforms like Reddit.
Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN) posted earnings for the third quarter in late November, reporting a net profit of $2.2 million and cash and cash equivalents of $17 million. The firm has a market cap of over $20 million.
At the end of the third quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $975,000 in Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN).
Among the hedge funds being tracked by Insider Monkey, New Jersey-based firm Sabby Capital is a leading shareholder in Inspira Technologies Oxy B.H.N. Ltd. (NASDAQ:IINN) with 102,553 shares worth more than $275,000.
6. VivoPower International PLC (NASDAQ:VVPR)
Number of Hedge Fund Holders: 2
VivoPower International PLC (NASDAQ:VVPR) is a sustainable energy solutions provider. On December 13, the shares climbed more than 13% after the company said that it had signed a letter of intent to acquire GB Autos and GB Electric Vehicles for $7.6 million.
VivoPower International PLC (NASDAQ:VVPR) shares have soared in the past few weeks after the company announced plans of a new office in the United Arab Emirates for the Middle East market and signed a multi-national distribution deal with a German group for conversion kits made by the firm.
At the end of the third quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $185,000 in VivoPower International PLC (NASDAQ:VVPR), the same as in the preceding quarter worth $267,000.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in VivoPower International PLC (NASDAQ:VVPR) with 20,009 shares worth more than $113,000.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), VivoPower International PLC (NASDAQ:VVPR) is one of the stocks that hedge funds are buying.
5. Daré Bioscience, Inc. (NASDAQ:DARE)
Number of Hedge Fund Holders: 3
Daré Bioscience, Inc. (NASDAQ:DARE) is a clinical-stage biopharma firm focusing on products related to the health of women. On December 7, the share price of the firm climbed by over 30% after it was granted FDA approval for XACIATO, a treatment for bacterial vaginosis in women.
In September, Daré Bioscience, Inc. (NASDAQ:DARE) had revealed that it had received a grant of $300,000 from the National Institute of Health to support the development of DARE-LARC1, a long-acting reversible contraceptive.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies a leading shareholder in Daré Bioscience, Inc. (NASDAQ:DARE) with 324,030 shares worth more than $541,000.
4. Mind Medicine (MindMed) Inc. (NASDAQ:MNMD)
Number of Hedge Fund Holders: 3
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) is a biotech firm concentrating on the development of psychedelic medicine. In August, the company had announced a partnership with Forian, a software firm, to advance personalized psychiatry for anxiety disorders.
In August, HC Wainwright analyst Patrick Trucchio had initiated coverage of Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) stock with a Buy rating and a price target of $10, noting that LSD therapy for anxiety disorders, a key product of the firm, had “multi-blockbuster potential”.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) with 1.3 million shares worth more than $3.2 million.
3. XpresSpa Group, Inc. (NASDAQ:XSPA)
Number of Hedge Fund Holders: 8
XpresSpa Group, Inc. (NASDAQ:XSPA) provides health and wellness services. HC Wainwright analyst Scott Buck recently raised the price target on the stock to $4 from $3.5 and kept a Buy rating, urging investors to buy the shares ahead of improving operating results and news flow.
XpresSpa Group, Inc. (NASDAQ:XSPA) posted earnings for the third quarter in mid-November, reporting earnings per share of $0.05, beating market estimates by $0.09. The revenue over the period was $26 million, smashing predictions by $16 million.
At the end of the third quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $2.1 million in XpresSpa Group, Inc. (NASDAQ:XSPA), up from 2 in the previous quarter worth $481,000.
2. Ardelyx, Inc. (NASDAQ:ARDX)
Number of Hedge Fund Holders: 10
Ardelyx, Inc. (NASDAQ:ARDX) is a biopharma firm based in California. The company has received positive analyst coverage and increased retail investor interest recently on pipeline drug potential. In October, the firm had announced a major restructuring plan and cut staff by 65%.
Ardelyx, Inc. (NASDAQ:ARDX) has rallied over 30% in the past few days after the company announced in early December that it would be launching Ibsrela, a drug for the treatment of irritable bowel syndrome with constipation, in the second quarter of 2022.
At the end of the third quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $6.3 million in Ardelyx, Inc. (NASDAQ:ARDX), compared to 20 in the preceding quarter worth $241 million.
1. Arbutus Biopharma Corporation (NASDAQ:ABUS)
Number of Hedge Fund Holders: 13
Arbutus Biopharma Corporation (NASDAQ:ABUS) markets cures for patients suffering from chronic Hepatitis B virus infection. Reports suggest that the company has identified molecular targets for COVID-19 that will help with the development of treatments for the virus.
Chardan analyst Keay Nakae recently raised the price target on Arbutus Biopharma Corporation (NASDAQ:ABUS) stock to $5.50 from $5 and kept a Buy rating, noting that a new pipeline drug of the firm was showing strong antiviral activity, terming it an “encouraging start” for the firm.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Hudson Bay Capital Management is a leading shareholder in Arbutus Biopharma Corporation (NASDAQ:ABUS) with 1.8 million shares worth more than $7.7 million.
You can also take a peek at 13 Best Hemp Stocks to Buy Now and Billionaire Dan Loeb’s Top 10 Stock Picks.
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Disclosure. None. 10 Penny Stocks to Buy in December is originally published on Insider Monkey.
