With that major caveat in mind, here are a few penny stocks that have piqued my interest recently based on their underlying business prospects, recent news or developments, and perceived potential for future growth.
I think that every investor could benefit by allocating a small part of their portfolios to these companies. Even laying down $500 into penny stock for a $10,000 portfolio could improve risk-adjusted returns over the long-run, which keeps the big picture in mind for many investors.
So here are three penny stocks to invest in to capitalize on the best opportunities to invest in right now.
Grab (GRAB)
Grab (NASDAQ:GRAB) is a diverse technology platform offering services from ride-hailing to financial services in Southeast Asia.
In 2023, GRAB reported a revenue of $2.36 billion, marking a 64.62% increase from the previous year. The company managed to reduce its losses significantly to $434 million, a 74.21% improvement compared to 2022.
Peter Oey, GRAB’s CFO, mentioned that 2024 will be a year of investment for GRAB. This strategic direction is part of why GRAB recently reported its first-ever profitable quarter, with a profit of $11 million and announced a share repurchase plan of up to $500 million.
Analysts hold a “Strong Buy” consensus on GRAB stock, with a 12-month price target of $5.08, suggesting a 59.75% upside potential from its last close, which makes it one of the top penny stocks to invest in.
I’ve been bullish on GRAB for a long time, and these results affirm my stance.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) focuses on lithium mining, essential for battery production. The company’s Thacker Pass project in the U.S. is expected to be a significant cash flow generator and is the primary reason I think it’s one of those penny stocks for investors to invest in.
LAC is also expected to continue ramping up production, particularly at its Cauchari-Olaroz asset. With a total production capacity anticipated to be achieved by mid-2024, the company aims for a significant increase in its lithium carbonate equivalent (LCE) production.
Analysts like LAC for many reasons. For instance, Faisal Humayun at Investorplace wrote that the backing from General Motors (NYSE:GM), as the largest shareholder and an offtake partner for the Thacker Pass project, provides clear cash flow visibility for Lithium Americas once production commences. Additionally, the potential for a $1 billion Department of Energy loan could help things further.
The Chinese market is key to determining the global lithium spot prices, and I think the weakness in this market is temporary, and not structural. LAC’s tiny valuation then makes it one of those penny stocks to buy.
IAMGOLD (IAG)
IAMGOLD (NYSE:IAG) is a gold mining company with a promising growth outlook due to high gold prices and its extensive project pipeline.
IAG stock has a few things up its sleeve that have many investors feeling bullish. For instance, The Cote Gold project, together with the Gosselin discovery, suggests the potential for a total resource exceeding 20 million ounces. This could be a significant source of free cash flow for the firm if it manages to tap into these reserves.
Also for the year 2023, IAG reported that its full-year production hit the top end of its guidance, and I think that the best is yet to come for this company as it focuses on becoming an intermediate gold producer with a focus on low-cost, high-margin operations €‹.
Another great thing is that its valuation is very cheap, and analysts collectively have rated it “Buy”. This rating comes with a 35.59% predicted increase for its stock price, to be reached within the next twelve months.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks €” How to Profit Without Getting Scammed
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.