We recently published a list of 12 Popular Penny Stocks on Robinhood to Watch. In this article, we are going to take a look at where Imperial Petroleum Inc. (NASDAQ:IMPP) stands against other popular penny stocks on Robinhood to watch.
The stock market is navigating a complex landscape influenced by geopolitical tensions, trade policies, and shifting investor sentiments. Recent developments, such as the U.S. administration’s decision to impose tariffs on Canada and Mexico, have introduced volatility, with the broader market experiencing a 5.2% decline over the past month.
Impact of Tariffs on the U.S. Economy
The Trump administration’s implementation of tariffs on imports from Canada and Mexico has raised concerns about potential economic repercussions. The Organization for Economic Cooperation and Development (OECD) forecasts that these tariffs could reduce U.S. GDP growth to 2.2% in 2025 and 1.6% in 2026. Additionally, Canada and Mexico are expected to experience economic slowdowns, with Canada’s growth slowing to 0.7% and Mexico’s economy contracting by 1.3% in 2025.
The announcement and implementation of these have contributed to market volatility. The Dow Jones Transportation Average, which includes companies like FedEx and Delta Air Lines, has declined over 17% from its November peak, reflecting investor concerns about the economic impact of trade policies. However, despite these challenges, there are emerging opportunities, particularly in the realm of penny stocks.
Return Potential of Penny Stocks
Penny stocks provide an accessible entry point for investors with limited capital. Their affordability allows individuals to diversify their portfolios without significant financial commitment. This characteristic is particularly appealing to novice investors seeking to enter the market.
While large-cap stocks offer stability and generally lower volatility, penny stocks present an opportunity for considerably higher percentage gains due to their smaller size and the potential for rapid expansion into niche markets or through innovative products and services. Academic research also indicates that the higher risk associated with the smaller market capitalization and lower liquidity of penny stocks is often compensated by higher expected returns through size and liquidity premiums. For instance, a study titled “On the Trading Profitability of Penny Stocks” examines the characteristics and pricing behavior of penny stocks, highlighting that these stocks are characterized by low liquidity and small market capitalization. The research suggests that these factors contribute to higher expected returns, aligning with the size and liquidity premiums observed in broader markets. The trade-off between risk and potential reward is a key factor that attracts growth-oriented investors to this segment.
Our Methodology
For this article, we performed an extensive analysis of leading financial websites to identify 12 penny stocks available on Robinhood. Our selection process was based on a consensus approach, where we considered only those stocks that consistently appeared across multiple sources during our research. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q4 2024. The stocks are ranked according to hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of an oil refinery, showing the production of refined petroleum products.
Imperial Petroleum Inc. (NASDAQ:IMPP)
No of hedge fund holders: 8
Imperial Petroleum Inc. (NASDAQ:IMPP) specializes in international seaborne transportation services for oil producers, refineries, and commodities traders.
Imperial Petroleum Inc. (NASDAQ:IMPP) has declared a dividend of $0.546875 per share on its 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock. This dividend, scheduled for payment on March 31, 2025, is for the period from December 30, 2024, to March 29, 2025, with the record date set as March 26, 2025. This move signifies the company’s robust financial health and commitment to returning value to its shareholders.
Imperial Petroleum Inc. (NASDAQ:IMPP) reported a decrease in Q4 2024 revenues from $29.9 million in Q4 2023 to $26.2 million, primarily due to a fall in spot market rates. The company also saw a decline in net income from $6.5 million to $3.9 million year-over-year, largely due to a $3.3 million foreign exchange loss. Despite these setbacks, the fleet operational utilization saw a significant improvement from 68.5% in Q4 2023 to 86.0% in Q4 2024. The company’s cash position also improved, with cash and cash equivalents, including time deposits, rising by 66.7% to $206.7 million as of December 31, 2024.
Overall, IMPP ranks 7th on our list of popular penny stocks on Robinhood to watch.While we acknowledge the potential for IMPP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IMPP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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