5 Best Penny Stocks To Buy in 2024
Despite their high risk and poor reputation, penny stocks are highly popular among investors. And while they are notoriously volatile, that doesn’t mean you can’t find a hidden gem once in a while. If you’re interested in trying your luck investing in penny stocks, here are some worth keeping an eye on.
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5 Penny Stocks To Keep on Your Watchlist
Last year ended on a high note for small-cap stocks — the category into which many penny stocks fall. While small market capitalizations and low share prices make these stocks inherently risky, there are still some investors willing to take the risk in the hope a penny stock will take off.
If you’re one of them, here are five of the best penny stocks to keep on your radar this year:
Pitney Bowes Inc. (NYSE: PBI)
Payoneer Global Inc. (Nasdaq: PAYO)
Bolt Biotherapeutics Inc. (Nasdaq: BOLT)
Ring Energy Inc. (NYSE: REI)
DocGo Inc. (Nasdaq: DCGO)
1. Pitney Bowes Inc. (NYSE: PBI)
Pitney Bowes is a clear exception to the rule that penny stocks represent obscure, here-today-gone-tomorrow companies. This global shipping and mailing mainstay was founded in 1920.
Shares are down about 3.5% so far this year as the company continues a restructuring — which it says is on target — that could lift share prices once the dust has settled. And while earnings and revenue also fell in the fourth quarter of 2023, both beat analysts’ estimates. What’s more, this is a dividend stock currently yielding 4.73%. According to Yahoo Finance, analyst recommendations range from “sell” (one analyst) to “strong buy” (three analysts), and their average 12-month price target is $5.
Share price as of March 20: $4.23
Market cap: $748.83 million
2. Payoneer Global Inc. (Nasdaq: PAYO)
Payoneer is a financial technology company, or fintech, that operates a multi-currency payment platform for global businesses. The company’s revenue grew 32% last year as a result of interest it earns on customers’ balances as well as increased efficiency and focus on its core customers.
Some analysts think shares are overpriced right now, but the stock’s consensus rating is “strong buy.” They expect the share price to reach $6.89 within the year.
Share price as of March 20: $4.80
Market cap: $1.79 billion
3. Bolt Biotherapeutics Inc. (Nasdaq: BOLT)
This clinical-stage immuno-oncology company is known for developing tumor-targeted therapies that take advantage of the inherent adaptability of the immune system. It’s most famous for its immune-stimulating antibody conjugate, which uses immunostimulants that activate myeloid cells to kill tumor cells. The company currently has Phase 1 and 2 trials in progress for therapies targeting HER2-positive and triple-negative breast cancer and colorectal, small-cell lung, endometrial and gastroesophageal cancers.
Analysts give BOLT a “strong buy” rating with an average price target of $4.54.
Share price as of March 20: $1.16
Market cap: $44.42 million
4. Ring Energy Inc. (NYSE: REI)
Ring Energy is an oil and gas exploration and production company based in Texas. Following record financial results for the fourth quarter and full-year 2023, REI has a “buy” rating and an average price target of $3. The P/E ratio is just 3.53. Yahoo Finance calls the stock undervalued and predicts an annual return of about 19% on shares held for five years. Of 10 analysts watching Ring, eight rate it a “buy” and two rate it a “strong buy.”
Share price as of March 20: $1.90
Market cap: $376.08 million
5. DocGo Inc. (Nasdaq: DCGO)
DocGo provides mobile health services, including on-demand urgent care, preventative services, remote patient monitoring and medical transportation, in 30 U.S. states and in the U.K. Its partners include hospitals and health systems, state and local governments, medical practices, employers and health plans.
The company experienced 42% revenue growth last year, with mobile health services and transportation services gaining 36% and 58%, respectively. With a P/E ratio of 65.75, the stock isn’t cheap. But analysts predict a 12-month increase to $10.74 in the next 12 months and rate the company a “strong buy.”
Share price as of March 20: $4.02
Market cap: $413.56 million
What Exactly Is a Penny Stock?
Historically, in the United States, penny stocks were those traded for less than $1 per share. However, in recent years, that definition has evolved to include all shares trading under $5.
Penny stocks are typically traded over the counter, meaning all exchanges are performed through decentralized dealer networks with no need for an exchange regulator’s supervision. However, some penny stocks are traded on large stock exchanges like the New York Stock Exchange.
Final Take
Penny stocks can be a good alternative for traders who lack the capital to make more substantial investments. Although they involve higher risk than other options available, there’s always the possibility of stumbling upon a hidden gem. Just remember to always do your due diligence and tread carefully.
Penny stocks can make investors a lot of money, but they can also make them lose a lot. Before trading these high-risk shares, it’s essential to do some research to avoid any unpleasant surprises in the long run.
Penny Stock FAQ
Here are the answers to some of the most frequently asked questions about penny stocks.
Can you get rich by trading penny stocks?
While penny stocks represent a high-risk investment option and could potentially make shareholders lose a lot of money, that's not a golden rule. Some penny stocks could have high-percentage returns.
For example, if you purchase 10 shares of a stock at $1 per share and the price jumps by $1, your investment will double, as opposed to buying 10 shares at $100, in which case you'd only get a $10 profit from your $1,000 investment.
How do I pick a good penny stock?
Before investing your hard-earned money in penny stocks, you need to take the following actions:
Use only funds you can afford to risk.
Understand the market conditions.
Do some research on the company.
Learn about share pricing and valuation.
How high can a penny stock go?
There is no limit on how high a penny stock can go. However, when reaching over $5 per share, it would cease to be considered a penny stock.
Daria Uhlig contributed to the reporting for this article.
Data was compiled on March 21, 2024, and is subject to change. Information on analyst ratings was sourced from Yahoo Finance.
This article originally appeared on GOBankingRates.com: 5 Best Penny Stocks To Buy in 2024
