In this article, we will take a look at the 5 penny stocks with high growth potential. If you want to read our discussion on penny stocks and their historical performance, go directly to the 10 Penny Stocks With High Growth Potential.
5. Volta Inc. (NYSE:VLTA)
Number of Hedge Fund Holders: 9
Volta Inc. (NYSE:VLTA) is a San Francisco, California-based developer of EV charging stations across the US. The company also uses its network of stations to execute digital out-of-home (DOOH) advertisements.
The US government intends to invest $5 billion to construct 500,000 charging stations across the US as there is a lack of enough charging stations across highways. For instance, the US state of Montana is spread over a massive area of 147,000 square miles and only has 57 EV charging stations. Most of these stations are located in towns and cities instead of on the highways. Volta Inc. (NYSE:VLTA) has a strong outlook as analysts expect the company to fund the capital expenditure related to expanding its network and capitalize on the growing demand for EV charging stations.
As of Q2 2022, 9 hedge funds reported owning a stake in Volta Inc. (NYSE:VLTA).
4. UpHealth, Inc. (NYSE:UPH)
Number of Hedge Fund Holders: 12
UpHealth, Inc. (NYSE:UPH) is a Delray Beach, Florida-based digital health services company that went public in 2021. The company is a provider of digital health technologies along with integrated and virtual care management systems.
During Q2 2022, UpHealth, Inc. (NYSE:UPH) saw its revenue grow by 37% YoY to $37.3 million. The significant increase in revenue was due to the merger with Cloudbreak Health. Analysts anticipate UpHealth, Inc. (NYSE:UPH) to witness YoY revenue growth of 44% during 2022 and finish the year with a top line of $178.26 million. Going forward, the analysts forecast further growth of 21.2% to reach a top line of $216.04 million by the end of next year. UpHealth, Inc. (NYSE:UPH) is targeting growing markets through its services and is on its way to achieving an adjusted EBITDA of $2.6 million during the first six months of 2023.
Overall, 12 hedge funds held a stake in UpHealth, Inc. (NYSE:UPH) as of Q2 2022.
3. National CineMedia, Inc. (NASDAQ:NCMI)
Number of Hedge Fund Holders: 13
National CineMedia, Inc. (NASDAQ:NCMI) is a Centennial, Colorado-based company that has agreements to show on-screen advertisements on 20,000 screens located in 1,600 theatres in the US.
The stock is a less speculative play on the movie theatre industry than AMC Entertainment Holdings, Inc. (NYSE:AMC) due to its diverse range of agreements with other cinema chains. National CineMedia, Inc. (NASDAQ:NCMI) has a long-term agreement of over 17 years with AMC, Cinemark, and Regal to display ads digitally. Before the pandemic, around 650 million people went to cinemas and saw the ads. This reflects the potential target market for National CineMedia, Inc. (NASDAQ:NCMI), supporting its inclusion in the list of penny stocks with high growth potential.
The company is projecting media advertising to grow by 13% this year. The advertising activity by National CineMedia, Inc. (NASDAQ:NCMI) targets the 18 to 34 years old demographic across different cultures with above-average income.
2. UWM Holdings Corporation (NYSE:UWMC)
Number of Hedge Fund Holders: 15
UWM Holdings Corporation (NYSE:UWMC) has the distinction of being the biggest wholesale non-bank mortgage lender in terms of origination for the past seven consecutive years. The company, founded in 1986, had a headcount of 7,000 employees as of June 30.
UWM Holdings Corporation (NYSE:UWMC) reported a net income of $216.4 million during Q2 2022, which reflected an increase of 55% YoY due to a rise in the value of mortgage servicing rights (MSRs). The rise in the benchmark interest rates since March this year has caused mortgage rates to surpass the 5% level and resulted in a challenging environment for mortgage originators. On the other hand, the higher demand for MSRs has countered the impact. Analysts think UWM Holdings Corporation (NYSE:UWMC) has a solid growth plan in place, meriting its inclusion in the list of the ten penny stocks with high growth potential.
As of Q2 2022, UWM Holdings Corporation (NYSE:UWMC) was held by 15 hedge funds.
1. Transocean Ltd. (NYSE:RIG)
Number of Hedge Fund Holders: 28
Transocean Ltd. (NYSE:RIG) is the biggest offshore drilling company in the world in terms of revenue.
In a research note issued to investors on September 6, Gregory Lewis at BTIG gave the Vernier, Switzerland-based company a target price of $8 and upgraded the stock from a Neutral to a Buy rating. The target provides a high upside potential of over 122% from the closing price as of September 9. The analyst highlighted that the floater activity continued to gain pace during August as Transocean Ltd.’s (NYSE:RIG) revenue jumped by 12% YoY and up 8% YTD. Lewis highlighted that the improving day rates in the floater market would aid Transocean Ltd. (NYSE:RIG) in re-chartering its rigs at higher rates. This will improve the fundamentals of the business, resulting in strong cash flows and refinancing opportunities to improve the balance sheet.
At the end of Q2, 28 hedge funds held a cumulative stake worth $385.4 million in Transocean Ltd. (NYSE:RIG).
You can also take a peek at the 12 Best Medical Device Stocks To Buy Now and Best Cheap Dividend Kings To Buy.
