10 Penny Stocks With Long-Term Growth Catalysts
In this article, we discuss the 10 penny stocks with long-term growth catalysts. If you want to skip our detailed analysis of these stocks, go directly to the 5 Penny Stocks With Long-Term Growth Catalysts.
Investors have been eagerly exploring growth opportunities in the penny stocks sector as COVID-19 cases continue to decline in most parts of the world and the US economy jumps back on the recovery track following a temporary setback linked to inflation fears. Some of the best domains to consider when exploring penny stocks are usually those that offer explosive growth potential, like biotech, space, and cryptocurrencies.
One of the best indicators of the increased interest in penny stocks at the stock market over the past few months is the increase in daily trading volume and the social media chatter around small companies. The average trading volume, per a report published by business news publication CNBC in early 2021, had increased to 14 billion from 7 billion in late 2019, an increase of around 100% in a little over twelve months. Reddit forums have also witnessed increased discussions around penny offerings during this period.
Even though Reddit forums are full of mentions related to famous companies like Tesla, Inc. (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL), The Goldman Sachs Group, Inc. (NYSE: GS), Shopify Inc. (NYSE: SHOP), Bank of America Corporation (NYSE: BAC), and NVIDIA Corporation (NASDAQ: NVDA), penny stocks are also generating a lot of buzz on the platform. This is partly why stocks like GameStop, AMC Entertainment, and Cassava Sciences – all trading in the penny domain not too long ago – have all exploded in value, soaring to valuations worth billions of dollars.
The influx of retail investors on the marketplace has disrupted the balance of power in the finance world. Institutional investors like hedge funds, who usually shorted penny firms with little to offer in terms of basic fundamentals, have had to cope with a new market force that is ready to bet against this short-selling scheme, resulting in losses worth billions. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
