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In this piece, we will take a look at the top ten penny stocks that are too cheap to ignore. For more stocks, head on over to 5 Penny Stocks To Buy That Are Too Cheap To Ignore.
Out of the thousands of stocks that are traded on public markets and are available to retail investors, penny stocks rank right at the top of the list of favorites. This is simply due to the fact that these stocks are very cheap as their share price is below $5. Therefore, not only are they an easy way to enter trading with those on a budget, but they also provide the opportunity for large profits should their share prices jump even slightly in the future.
Perhaps the most successful example of a penny stock that exceeded everyone's expectations is Advanced Micro Devices, Inc. (NASDAQ:AMD). The firm's shares sank to $2.60 in October 1990, and if you had invested in them back then (hindsight is 20/20 after all), today you would have grown every dollar invested in the company to a whopping $2130. This is the power of penny stocks, as even a single dollar can turn into thousands if an investor is lucky (and savvy) enough to have invested in the right name.
However, the sector itself comes with a handful of caveats. For instance, since the share price is low and public interest is limited, an investor can find it hard to unload penny stocks once the gains are made given the risks related to liquidity and trading volumes. Furthermore, the path to easy profits is also fraught with the risk of massive losses. As an illustrative example, if AMD's shares had instead dropped to $1.3, then $1,000 invested in the firm would have been cut down to $500, despite the stock price only falling by a little more than a dollar.
Our list for you today narrows down the focus to some impressive penny stocks, with the top names being Canoo Inc. (NASDAQ:GOEV), Wheels Up Experience Inc. (NYSE:UP), and Ambev S.A. (NYSE:ABEV).
Image by Steve Buissinne from Pixabay
Our Methodology
We scoured through the countless penny stocks present on the stock market to pick out a handful that have strong business models, strong analyst sentiment, and stable revenues. They were then ranked according to Insider Monkey's 895 hedge fund survey for the second quarter of this year.
10 Penny Stocks To Buy That Are Too Cheap To Ignore
10. Skylight Health Group Inc. (OTCMKTS:SLHGF)
Number of Hedge Fund Holders: N/A
Skylight Health Group Inc. (OTCMKTS:SLHGF) is a Canadian healthcare company that provides its services in the United States, the United Kingdom, and Colombia. These include running healthcare networks that offer diagnostics and care services. The firm is based in Mississauga, Canada.
Skylight Health Group Inc. (OTCMKTS:SLHGF) is aiming towards breaking even with its operating costs by the end of this year, and on this front, the company reduced its annual cost point basis by $10 million during its second quarter. The firm receives a $12,000 per member capitation fee for providing its services for Medicare and Medicare Advantage patients. Additionally, it scored a big win in October 2022, when Skylight Health Group Inc. (OTCMKTS:SLHGF) announced that it had secured a $5 million commitment from a multi billion dollar American healthcare investment firm.
Skylight Health Group Inc. (OTCMKTS:SLHGF), Wheels Up Experience Inc. (NYSE:UP), Canoo Inc. (NASDAQ:GOEV), and Ambev S.A. (NYSE:ABEV) are some of the hottest penny stocks for you to consider.
9. Air Industries Group (NYSE:AIRI)
Number of Hedge Fund Holders: 2
Air Industries Group (NYSE:AIRI) is a defense contractor that manufactures parts and assemblies for the Department of Defense (DoD). These include aircraft landing gears, arresting gears, flight controls, and engine components. The company is headquartered in Bay Shore, New York, the United States.
Air Industries Group (NYSE:AIRI)'s parts are used in a host of aircraft for the U.S. Army, U.S. Navy, and Air Force. These include landing gears for the F-18 and the F-35, components for the Blackhawk, B1-B and Hawkeye, and thrust struts for the GTF Jet Engine. The firm's second fiscal quarter saw it bring in $14 million in revenue, which beat analyst expectations at a time when its supply chain was struggling due to the Russian invasion of Ukraine.
Air Industries Group (NYSE:AIRI) also won two contracts worth $5 million for jet engine and the Blackhawk contracts in September 2022, providing the firm with a stable revenue base that is associated with government contracts. By the end of this year's second quarter, two out of the 895 hedge funds polled by Insider Monkey had owned a stake in it.
Out of these, Jim Simons' Renaissance Technologies is Air Industries Group (NYSE:AIRI)'s largest investor. It owns 21,500 shares that are worth $15,000.
8. Medicenna Therapeutics Corp. (NASDAQ:MDNA)
Number of Hedge Fund Holders: 3
Medicenna Therapeutics Corp. (NASDAQ:MDNA) is a Canadian biotechnology company. It develops drugs and treatments for cancer and brain tumors, and its treatments also target autoimmune diseases such as multiple sclerosis. The firm is headquartered in Toronto.
Medicenna Therapeutics Corp. (NASDAQ:MDNA) had CAD19.3 million in cash and equivalents as of June 2022, which is sufficient to cover its latest research and development costs of CAD2.4 million in the second quarter of last year for more than a year. The firm also raised CAD20 million as part of a new offering in 2022, and it announced in September 2022 that it has entered into an agreement with the pharmaceutical giant Merck to test its cancer drug.
Oppenheimer kept its $8 share price target for Medicenna Therapeutics Corp. (NASDAQ:MDNA) in September 2022 as it noted that the company's drugs are underappreciated by the stock market. As of this year's June quarter, three out of the 895 hedge funds polled by Insider Monkey had invested in Medicenna Therapeutics Corp. (NASDAQ:MDNA).
Medicenna Therapeutics Corp. (NASDAQ:MDNA)'s largest investor is Orin Hirschman's AIGH Investment Partners which owns 2.2 million shares that are worth $2.6 million.
7. Bionano Genomics, Inc. (NASDAQ:BNGO)
Number of Hedge Fund Holders: 6
Bionano Genomics, Inc. (NASDAQ:BNGO) is a medical diagnostics firm that provides platforms to allow its customers to conduct genomic analysis and understand genetic variation and gene function. The firm is headquartered in San Diego, California, the United States.
Bionano Genomics, Inc. (NASDAQ:BNGO)'s trailing 12 month revenue stood at $23 million as of June 2022, and the firm had $187 million in cash and equivalents at the same time for a comfortable balance sheet position. The firm also announced in October 2022 that its Long String VANTAGE system for high throughput genomic aberration detection is commercially available. This came after Bionano Genomics, Inc. (NASDAQ:BNGO) shared a research study earlier in the month that showed that optical genome mapping (employed by its platforms) was better at detecting cancer than whole gene sequencing.
Bionano Genomics, Inc. (NASDAQ:BNGO) Q2 2022 revenues of $6.67 million beat consensus estimates of $6.28 million, and during the same time period, six out of the 895 hedge funds polled by Insider Monkey had bought its shares.
Bionano Genomics, Inc. (NASDAQ:BNGO)'s largest investor is Jim Simons' Renaissance Technologies which owns 3.6 million shares that are worth $5 million.
6. Seelos Therapeutics, Inc. (NASDAQ:SEEL)
Number of Hedge Fund Holders: 9
Seelos Therapeutics, Inc. (NASDAQ:SEEL) is a biopharmaceutical company that is headquartered in New York, New York, the United States. The firm develops a variety of treatments for central nervous systems and respiratory disorders.
Seelos Therapeutics, Inc. (NASDAQ:SEEL) has two drugs in human trials, for treatments of major depression and Lou Gehrig's disease. Out of these, the latter drug (called SLS-005) is on its way to getting approval for the FDA to gather funds for its approval - a development that raises Seelos Therapeutics, Inc. (NASDAQ:SEEL)'s revenue prospects. The company also announced in August 2022 that it had won a grant for conducting research for its drugs to cure Parkinson's disease.
Insider Monkey's Q2 2022 survey of 895 hedge funds revealed that nine had held a stake in Seelos Therapeutics, Inc. (NASDAQ:SEEL).
Out of these, Jeffrey Gendell's Tontine Asset Management is Seelos Therapeutics, Inc. (NASDAQ:SEEL)'s largest investor as it owns 4.9 million shares that are worth $3.3 million.
Canoo Inc. (NASDAQ:GOEV), Wheels Up Experience Inc. (NYSE:UP), and Ambev S.A. (NYSE:ABEV) are met by Seelos Therapeutics, Inc. (NASDAQ:SEEL) in our list of cheap penny stocks.
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Disclosure: None. 10 Penny Stocks To Buy That Are Too Cheap To Ignore is originally published on Insider Monkey.
