There are some penny stocks for massive ROI that investors should consider adding to their portfolios as we enter into this year’s second quarter.
Penny stocks are shares of small public companies that trade at low prices, typically below $5 per share. While they are considered highly speculative investments, penny stocks can offer several potential advantages and benefits for investors willing to take on higher risk.
Furthermore, penny stocks may improve risk-adjusted returns in bull markets due to their potential for significant price appreciation and leverage. In a bull market, when stock prices are generally rising, penny stocks can experience substantial gains as investor sentiment and risk appetite increase.
My view is that the broader indices such as the S&P 500 and the Nasdaq will continue to rise, so this could put these penny stocks for massive ROI in good step moving forward.
So here are seven penny stocks for investors to consider adding to their portfolios.
Grab Holdings (GRAB)
Grab Holdings (NASDAQ:GRAB), a ride-hailing platform, has shown impressive revenue growth and is popular among hedge funds.
GRAB has long been one of my favorite penny stocks due to its strong presence in Southeast Asia and its expanding top and bottom lines. The developing economies of Vietnam and Thailand will be a boon for GRAB.
GRAB had a solid previous financial year, demonstrating a 65% year-over-year (YoY) revenue increase to $2.36 billion, surpassing its guidance. This growth was attributed to across all segments, incentive optimization, and a business model change in its delivery offerings.
The company also marked a 72% YoY improvement in its annual loss to $485 million, mainly due to better Group Adjusted EBITDA and lower fair value losses on investments.
Analysts have a positive outlook on GRAB, rating the stock as a “Strong Buy” with a price target of $5.08, indicating a potential upside of 59.25% from its current price.
Uranium Energy (UEC)
Uranium Energy (NYSE:UEC) focuses on uranium mining primarily in the United States and Paraguay.
UEC can be a great bet for investors who are bullish on the world’s shift towards nuclear energy. Many countries around the world are expanding or restarting their nuclear power programs due to falling far behind their goals to curb carbon emissions. Nuclear could then play a pivotal role in this, and UEC could be an accretive entry point for investors to ride this tailwind.
For 2024, UEC is actively expanding its operations, with a significant focus on restarting uranium production in Wyoming. The company plans to resume production at its Christensen Ranch In-Situ Recovery operations in Wyoming, which is part of its broader Powder River Basin and Great Divide Basin projects. This restart is expected to begin in August 2024.
In terms of financial performance and outlook, UEC’s recent activities include the acquisition of the Roughrider Uranium Development Project in Saskatchewan, Canada, from Rio Tinto Group (NYSE:RIO) for $150 million. This move is part of UEC’s strategy to expand its resource base and operational footprint.
New Gold (NGD)
New Gold (NYSE:NGD) is a gold mining company with multiple projects. It has substantial liquidity and volume.
Gold should be a staple of every investor’s portfolio to improve diversification. The spot price of gold is uncorrelated to equities over the long-run, and its an important “flight to safety” asset during severe market drawdowns. Investing in NGD, as a penny stock, could then confer some defensive and growth attributes to one’s portfolio, and I think that the best has yet to come for this company.
Last year, the company reported a consolidated gold equivalent production of 423,517 ounces for 2023, surpassing its initial guidance of 365,000 to 425,000 ounces. The success was mirrored at its Rainy River and New Afton mines, with Rainy River’s gold equivalent production reaching the upper limit of its guidance and New Afton significantly exceeding its gold production forecast.
NGD also posted a strong forecast for the future, with gold production expected to increase above 2023 levels.
Perimeter Solutions (PRM)
Perimeter Solutions (NYSE:PRM) is a leader in providing firefighting chemicals and lubricant additives, focusing on environmentally friendly solutions.
I think PRM could be undervalued due to some short-term, not structural, weaknesses in its business fundamentals. This could be a boon for investors if they are prepared for its conditions to improve.
In 2023, PRM experienced a decrease in revenue to $322.11 million from the previous year’s $360.51 million, marking a 10.65% decline. The earnings also saw a reduction to $67.49 million, a 26.45% decrease.
However, for the last quarter of the year, things seem to have turned a corner. PRM reported a net loss of $13.24 million, a significant improvement from the loss of $60.35 million in the same period the previous year. This improvement is attributed to an increase in net sales from $41.27 million to $59.46 million year-over-year for the quarter. Additionally, the company surpassed consensus revenue estimates, showcasing a better-than-expected performance.
Cronos (CRON)
A significant player in the cannabis industry, Cronos (NASDAQ:CRON) boasts a robust cash position and is aggressively expanding its global medicinal cannabis operations.
CRON reported a net revenue of $24.8 million for Q3 2023, a 22% year-over-year increase, attributed to higher Canadian adult-use market sales and lower biomass costs. Despite geopolitical unrest in Israel, CRON’s second-largest market, the company saw a 95% reduction in net loss and an 18% improvement in adjusted EBITDA loss year-over-year. The company’s balance sheet remains strong, with $571.7 million in cash and equivalents and $267.9 million in short-term investments.
For 2024, CRON aims to continue its growth, focusing on brand portfolio expansion and new product launches. The Spinach brand’s edible and pre-roll offerings are among the products contributing to its growth.
Cannabis has been disappointing for investors, but I feel that this segment’s long-term growth potential is promising.
Nextdoor Holdings (KIND)
Nextdoor Holdings (NYSE:KIND) connects neighborhoods across the globe via its hyperlocal social networking platform.
Social media continues to become more fragmented as time goes on. The largest networking communities are now splintering into niche verticals, and I think that KIND is one of those stocks to take advantage of this shift in the landscape.
In 2023, KIND reported a 5% year-over-year growth in Weekly Active Users (WAU), reaching 41.8 million, and a revenue increase of 4% to $55.6 million in Q4. The company ended the year with $531.1 million in cash and equivalents and approved an additional $150 million for its share repurchase program through March 2026
For 2024, KIND anticipates revenue growth to outpace that of 2023, with a significant improvement in adjusted EBITDA margin. The company’s Q4 revenue reached $56 million, a 4% increase, while its self-serve revenue now accounts for over 40% of total revenue.
Nerdy (NRDY)
Nerdy (NYSE:NRDY) addresses the increasing demand for accessible online education with its apps and platform.
Online learning accelerated during the pandemic but has since fallen far below its peak. Still, the shift toward online learning I don’t think will slow down for the foreseeable future, but instead accelerate. NRDY could then be a viable option to take advantage of this shifting trend.
The company reported significant growth and operational improvements in 2023, with a positive outlook for 2024. In Q4 2023, revenue grew by 32% year-over-year to $55.1 million, driven by the transition to learning memberships and increased institutional revenue. Nearly all consumer revenue came from subscription learning memberships, contributing to a 101% increase in active learners to 40.7 thousand and a record quarterly gross profit of $39.2 million.
For 2024, NRDY expects revenue in the range of $232 to $246 million, indicating a 24% growth at the midpoint compared to 2023 revenue of $193 million. The company also anticipates an adjusted EBITDA of positive $5 to $15 million, improving by over 500 basis points, and aims to deliver positive operating cash flow.
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.