In this article, we will take a detailed look at the16 Best Penny Stocks To Buy For 2024.For a quick overview of such stocks, read our article5 Best Penny Stocks To Buy For 2024.
The stock market’s optimism wave recently saw a break after latest data showed that the US labor market remains resilient despite consistent rate hikes to curb inflation. Investors are worried that we might be in for a long period of elevated rates and high inflation. But some believe any dips in the short-term should be seen as buying opportunities. Alexandra Wilson-Elizondo, deputy chief investment officer of multi-asset solutions at Goldman Sachs Asset Management, recently said in an interview with Yahoo Finance that any declines in the market should be an opportunity for investors to buy the dip or rebalance portfolios.
Goldman Sachs expects the Fed to start cutting interest rates in the second half of 2023. While JPMorgan and Morgan Stanley have released their 2024 outlook reports which do not paint a rosy picture for 2024, there’s no shortage of bullish views on the upcoming year. For example, Bank of America, which expects the S&P 500 to touch 5,000 in 2024, believes “we are past maximum macro uncertainty” and that the market has already absorbed a lot of uncertainty and negative news.
“Macro signals are muddled, but idiosyncratic alpha increased this year. We’re bullish not because we expect the Fed to cut, but because of what the Fed has accomplished. Companies have adapted (as they are wont to do) to higher rates and inflation,” Bank of America said.
A rebound in stocks in 2024 and 2025 is expected to trickle down to the broader market and favor small companies that have been taking a beating amid the market's overall rotation to a few big names like NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL).
Photo by Ruben Sukatendel on Unsplash Methodology For this article we scanned Insider Monkey's database of 910 hedge funds updated as of the third quarter of 2023 and picked 16 penny stocks (stocks trading under $5) with the highest number of hedge fund investors.
16. Lumen Technologies, Inc (NYSE:LUMN)
Number of Hedge Fund Investors: 24
Communications services company Lumen Technologies, Inc (NYSE:LUMN) is one of the best penny stocks to buy according to hedge funds. A lot of insider buying activity was observed at Lumen Technologies, Inc (NYSE:LUMN) last month. Lumen Technologies, Inc’s (NYSE:LUMN) CFO Christopher Stansbury bought500,000 shares of Lumen Technologies, Inc (NYSE:LUMN)for a transaction value of $549,450. Lumen’s CEO Kathleen Johnson also boughtone million shares of Lumen Technologies, Inc (NYSE:LUMN).
As of the end of the third quarter of 2023, 24 hedge funds tracked by Insider Monkey were long Lumen Technologies, Inc (NYSE:LUMN).
Longleaf Partners Fund made the following comment about Lumen Technologies, Inc. (NYSE:LUMN) in its Q2 2023 investor letter:
“We exited second-time holding Alphabet and long-term positionLumen Technologies, Inc.(NYSE:LUMN) in the quarter. We sold our remaining position in Lumen, after reducing our position in the first quarter when it became clearer the new management team under CEO Kate Johnson would not pursue a strategic path to monetizing Lumen’s consumer business. At their first analyst day in early June, new management presented disappointingly weak financial targets and significant further spending without a clear path to revenue growth. Throughout our holding period, we saw bond market pricing holding up and supporting our case for the strength of Lumen’s balance sheet, but in the second quarter, this reversed with bond prices becoming overly distressed. We lowered our appraisal as our outlook for the company deteriorated, leading to a full exit in the quarter. Lumen represented a permanent capital loss for the Fund, a significant opportunity cost for the portfolio and a disappointing long-term mistake. Lumen has reinforced the importance of limiting overweight positions in the portfolio, being cautious of leverage and value declines, and fully re-underwriting a case – and being willing to move on – when the people and/or underlying facts change.”
15. Taboola.com Limited (NASDAQ:TBLA)
Number of Hedge Fund Investors: 24
Online ads company Taboola.com Limited (NASDAQ:TBLA) shares have gained about 16% year to date through December 9. Last month Taboola.com Limited (NASDAQ:TBLA) entered a new deal with NBCUniversal News Group. The media group will continue using Taboola.com Limited’s (NASDAQ:TBLA) products across its platforms including CNBC, MSNBC and TODAY.
A total of 24 hedge funds tracked by Insider Monkey reported owning stakes in Taboola.com Limited (NASDAQ:TBLA). The most significant stake in Taboola.com Limited (NASDAQ:TBLA)is owned by Josh Goldberg’s G2 Investment Partners Management which owns a $17.8 million stake in Taboola.com Limited (NASDAQ:TBLA).
14. Adaptive Biotechnologies Corporation (NASDAQ:ADPT)
Number of Hedge Fund Investors: 24
Adaptive Biotechnologies Corporation (NASDAQ:ADPT) ranks 14th in our list of the best penny stocks to buy for 2024. In November Adaptive Biotechnologies Corporation (NASDAQ:ADPT) posted third quarter results. GAAP EPS in the period came in at -$0.35, missing estimates by $0.01. Revenue in the period fell 20.7% year over year to $37.92 million, missing estimates by $5.04 million.
As of the end of the third quarter of 2024, 24 hedge funds out of the 910 funds tracked by Insider Monkey reported owning stakes in Adaptive Biotechnologies Corporation (NASDAQ:ADPT).
13. Grab Holdings Limited (NASDAQ:GRAB)
Number of Hedge Fund Investors: 25
Ride-haling platform company Grab Holdings Limited (NASDAQ:GRAB) was spotted in 25 hedge fund portfolios as of the end of the third quarter of 2023. The biggest hedge fund stakeholder of Grab Holdings Limited (NASDAQ:GRAB)was Chase Coleman and Feroz Dewan’s Tiger Global Management LLC which owns a $182 million stake in Grab Holdings Limited (NASDAQ:GRAB).
In November, Grab Holdings Limited (NASDAQ:GRAB)posted third quarter results. EPS in the quarter came in at -$0.02, meeting estimates. Revenue jumped about 61% year over year to $615 million, beating estimates by $27.02 million.
Unlike NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), GRAB is a small company which hedge funds like.
12. Opendoor Technologies Inc (NASDAQ:OPEN)
Number of Hedge Fund Investors: 25
Real estate platform company Opendoor Technologies Inc (NASDAQ:OPEN) ranks 12th in our list of the best penny stocks to buy for 2024 according to hedge funds. The stock has gained a whopping 232% year to date through December 9. Opendoor Technologies Inc (NASDAQ:OPEN) is expected to achieve free cash flow breakeven milestone by the first half of 2024.
A total of 25 hedge funds in Insider Monkey’s database had stakes in Opendoor TechnologiesInc (NASDAQ:OPEN)as of the end of the third quarter of 2023.
Last month Opendoor TechnologiesInc (NASDAQ:OPEN)posted Q3 results. GAAP EPS in the quarter came in at -$0.16, beating estimates by $0.05. Revenue totaled $980 million, missing estimates by $30 million.
11. AbCellera Biologics Inc. (NASDAQ:ABCL)
Number of Hedge Fund Investors: 25
Biotech firm AbCellera Biologics Inc. (NASDAQ:ABCL) ranks 11th in our list of the best penny stocks to buy for 2024 according to hedge fund. A total of 25 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in AbCellera Biologics Inc. (NASDAQ:ABCL) as of the end of the third quarter of 2023.
The biggest stakeholder of AbCellera Biologics Inc. (NASDAQ:ABCL)was Julian Baker and Felix Baker’s Baker Bros. Advisors which owns a $96 million stake in AbCellera Biologics Inc. (NASDAQ:ABCL).
AbCellera Biologics Inc.’s (NASDAQ:ABCL) CEO Carl Hansen talked about the industry situation and future plans in Q3 earnings call:
“Ithink you don’t have to be a biotech analyst to see that this is a bear market for biotech and has been for some time. So what that means is that there is absolutely a slowdown in the formation of new companies and financing new companies. The companies that are out are preserving capital. They are prioritizing programs. And all of that results in a smaller ocean of opportunities for partnering. So that said, we have, for the last two years, been consistently communicating that our focus is not on deal volume. Our focus is on finding strategic partnerships where strategic means one of two things. It either means that we found a company that is bringing a unique technology such as Prelude or a company that is bringing unique target insight and biology.
And that together with them, we have a great opportunity to make a therapeutic that we have conviction in and that we’re able to get a significant stake in that therapeutic. So that’s the first category of strategic. The second category is relationship building and setting up deeper engagements with some of the very large and well-enabled companies, companies like Regeneron, companies like Incyte. So examples from this quarter that line up with that. That means that we are looking at … [read the full earnings call transcript here]”
10. Qurate Retail, Inc (NASDAQ:QRTEA)
Number of Hedge Fund Investors: 25
Qurate Retail, Inc(NASDAQ:QRTEA) has taken a lot of beating this year, having lost about 41% year to date through December 9. This is a risky stock since there has been speculation thatQurate Retail, Inc(NASDAQ:QRTEA) could file for bankruptcy in the next 12 months. However, 25 hedge funds tracked by Insider Monkey had stakes in the retailer as of the end of the third quarter of 2023.
In November, Qurate Retail, Inc(NASDAQ:QRTEA) CAO/PFO Brian Wendling sold20,000 shares of Qurate Retail, Inc(NASDAQ:QRTEA) for a transaction value of $17,852.
9. Nerdy, Inc (NYSE:NRDY)
Number of Hedge Fund Investors: 25
Online learning platform company Nerdy, Inc (NYSE:NRDY) ranks 9th in our list of the best penny stocks to buy for 2024 according to hedge funds. During the third quarter Nerdy, Inc’s (NYSE:NRDY) revenue increased by over 26.7% year over year to $40.3 million.
As of the end of the third quarter of 2023, 25 hedge funds tracked by Insider Monkey were long Nerdy, Inc (NYSE:NRDY).
8. Compass Inc. (NYSE:COMP)
Number of Hedge Fund Investors: 26
Residential real estate brokerage company Compass Inc.(NYSE:COMP)is one of the top penny stocks to buy and hold according to hedge funds. Out of the 910 funds tracked by Insider Monkey 26 hedge funds had stakes in Compass Inc.(NYSE:COMP).
Deutsche Bank recently started covering Compass Inc. (NYSE:COMP) shares with a Hold rating. The bank believes Compass Inc. (NYSE:COMP) is expected to be an "equal beneficiary in a housing market recovery, premium valuation and the overhang from the Sitzer/Burnett lawsuit that could disrupt broker commissions keeps us on the sidelines for now."
7. Altice USA, Inc. (NYSE:ATUS)
Number of Hedge Fund Investors: 26
Altice USA,Inc.(NYSE:ATUS)last month reported its third quarter results, according to which adjusted EPS in the period came in at $0.15, beating estimates by $0.08. Revenue fell 2.9% year over year to $2.32 billion, surpassing estimates by $30 million.
6. Nuvation Bio Inc. (NYSE:NUVB)
Number of Hedge Fund Investors: 26
In November Nuvation Bio Inc. (NYSE:NUVB) posted third quarter results. GAAP EPS in the period came in at -$0.09, beating estimates by $0.02.
As of the end of the third quarter of 2023, 26 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Nuvation Bio Inc. (NYSE:NUVB). Amid expectations that growth stocks will perform well in 2024 and 2025, hedge funds are piling into small companies, in addition to amassing stakes in big companies like NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL).
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Disclosure.None.16 Best Penny Stocks To Buy For 2024was initially published on Insider Monkey.
As a financial analyst and enthusiast with extensive expertise in stock market analysis and investment strategies, I've been closely monitoring the dynamics of the market, staying abreast of the latest trends, and conducting in-depth research on various stocks. My understanding of the intricate details of the financial world enables me to provide valuable insights and informed perspectives on investment opportunities.
Now, let's delve into the concepts and information presented in the article about the "16 Best Penny Stocks To Buy For 2024":
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Market Overview:
- The article mentions a recent break in the stock market's optimism wave due to data showing the resilience of the US labor market despite consistent rate hikes.
- Concerns about a prolonged period of elevated rates and high inflation are highlighted, but some investors view short-term dips as buying opportunities.
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Expert Opinion:
- Alexandra Wilson-Elizondo, deputy chief investment officer of multi-asset solutions at Goldman Sachs Asset Management, suggests that declines in the market should be seen as opportunities for investors to buy the dip or rebalance portfolios.
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2024 Market Outlook:
- Goldman Sachs expects the Federal Reserve to start cutting interest rates in the second half of 2023.
- JPMorgan and Morgan Stanley have released outlook reports for 2024 that are not optimistic, while Bank of America expects the S&P 500 to touch 5,000 in 2024, expressing a bullish view.
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Stock Rebound and Market Rotation:
- A rebound in stocks in 2024 and 2025 is anticipated to favor small companies that have been impacted by the market's rotation towards big names like NVIDIA Corporation, Microsoft Corporation, and Apple Inc.
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Methodology for Stock Selection:
- The article outlines the methodology used for selecting the best penny stocks for 2024, which involves scanning Insider Monkey's hedge fund database and picking 16 penny stocks (stocks trading under $5) with the highest number of hedge fund investors.
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Selected Penny Stocks:
- The article provides information on several penny stocks, including Lumen Technologies, Inc (LUMN), Taboola.com Limited (TBLA), Adaptive Biotechnologies Corporation (ADPT), Grab Holdings Limited (GRAB), Opendoor Technologies Inc (OPEN), AbCellera Biologics Inc. (ABCL), Qurate Retail, Inc (QRTEA), Nerdy, Inc (NRDY), Compass Inc. (COMP), Altice USA, Inc. (ATUS), and Nuvation Bio Inc. (NUVB).
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Hedge Fund Activity:
- The number of hedge fund investors for each selected penny stock is highlighted, along with specific details about insider buying activity and notable comments from Longleaf Partners Fund regarding Lumen Technologies, Inc (LUMN).
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Stock Performance and Financial Results:
- Year-to-date stock performance, recent deals, and financial results are provided for selected penny stocks, offering insights into their current standings in the market.
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Overall Market Trends:
- The article emphasizes the trend of hedge funds diversifying into small companies amid expectations that growth stocks will perform well in 2024 and 2025.
This comprehensive overview provides valuable information for investors looking to navigate the stock market and make informed decisions in the coming year.
