In this article, we talk about 10 penny stocks for long-term profits. If you wish to read about our top penny stock picks, go directly to 5 Penny Stocks for Long-Term Profits.
The US economy is in a bad place right now. The gross domestic product (GDP) fell 0.9% on an annualized pace during the quarter ending June, and had previously fallen 1.6% in the first quarter of 2022. Two consecutive quarters of GDP decline generally constitute the definition of a recession, and anxious investor sentiment amid rising interest rates have given many high-profile stocks significant beatings in recent months. Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL) have slid 15.5%, 17.4% and 9.15% in the year to date, respectively.
Still, the American economy added 528,000 jobs in July, an encouraging sign of resilient growth amid persistent fears of a prolonged bearish market. The employment rate stood at 3.5%, beating the Dow Jones estimate of 3.6%. Experts feel this data may hamper the recession trades put in by many investment firms, and no matter what the outlook (bearish or bullish), there's plenty of opportunity for investors with a keen eye for choosing the right stocks.
Not every investor can afford to put their money into blue chip stocks. Retail investors often rely on penny stocks to place bets on companies that they think will mature into mainstream businesses with solid products, sales and earnings. Here's our list of 10 penny stocks best-positioned for long-term gains.
To help our readers pick and choose the best penny stocks for long-term profits, we've prepared the following list after carefully reviewing each company's industry outlook, market position, product offerings, business model and future prospects.
Penny Stocks for Long-Term Profits
10. Solar Integrated Roofing Corporation (OTC:SIRC)
Number of Hedge Fund Holders: N/A Share Price (as of August 5): $0.41
Solar Integrated Roofing Corporation (OTC:SIRC) is a California-based company which provides integrated solar power and roofing systems installation services to residential and commercial clients across the United States. It also provides battery backup systems and electric vehicle charging stations.
Pacific Lighting Management (PLEMCo), a subsidiary of Solar Integrated Roofing Corporation (OTC:SIRC), recently received a 5-year blanket purchase agreement from the U.S. General Services Administration. This is part of the $5 billion in federal funds allocated to EV charging installations as part of the Biden administration's infrastructure bill.
Whilst the company shares are trading at around $0.41 as of August 5, Solar Integrated Roofing Corporation (OTC:SIRC) is well-positioned for future growth as more homes and businesses turn towards solar power roof installations. Government spending aimed to hasten the transition towards green energy also acts as a growth driver for Solar Integrated Roofing Corporation (OTC:SIRC).
For investors lacking the capital to go for big names such as Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), Solar Integrated Roofing Corporation (OTC:SIRC) is an exciting penny stock for long-term gains.
9. Wrap Technologies, Inc. (NASDAQ:WRAP)
Number of Hedge Fund Holders: 2 Share Price (as of August 5): $0.84
Wrap Technologies, Inc. (NASDAQ:WRAP) makes and sells immersive police training simulators through its proprietary Wrap Reality technology. The Arizona-based company also offers other policing solutions to government agencies around the world, including BolaWrap, a remote-controlled restraint device.
At the end of the first quarter of 2022, Wrap Technologies, Inc. (NASDAQ:WRAP) stock was held by 2 hedge funds with a collective price tag of $478,000. Millennium Management was the firm's most prominent Q1 shareholder, with a position worth more than $300,000.
The growing trend of mass shooting incidents in the United States, and the subsequent public debate on public safety measures, has put companies like Wrap Technologies, Inc. (NASDAQ:WRAP) in the limelight. In May, the Country Sheriff’s Office in Kentucky placed a multi-year contract with the company for its Wrap Reality technology, allowing officers to train for harsh real-world circumstances without risk of injury. In July, Wrap Technologies, Inc. (NASDAQ:WRAP) announced that police in Oregon had successfully deployed its BolaWrap restraint device.
8. Smith Micro Software, Inc. (NASDAQ:SMSI)
Number of Hedge Fund Holders: 4 Share Price (as of August 5): $2.94
Digitally connected devices, referred to as Internet of Things (IoT), are increasingly being adapted in homes, offices, shops and factories around the world. This is good news for a company like Smith Micro Software, Inc. (NASDAQ:SMSI), which sells software that protects consumers' digital devices and their online footprint. It also offers various software products to telecommunication service providers in the United States.
Recently, Smith Micro Software, Inc. (NASDAQ:SMSI) acquired software assets from established industry giants such as Avast, which makes it an exciting prospect moving forward within a fast growing industry.
As of the end of the first quarter of 2022, 4 out of 900+ hedge funds tracked by Insider Monkey disclosed ownership of stakes in Smith Micro Software, Inc. (NASDAQ:SMSI) with a combined worth of $3.16 million. Famed investors Jim Simons' Renaissance Technologies was the company's top shareholder, with a $2.1 million position.
7. Mullen Automotive, Inc. (NASDAQ:MULN)
Number of Hedge Fund Holders: 4 Share Price (as of August 5): $0.84
Mullen Automotive, Inc. (NASDAQ:MULN) is up next on our list of the best penny stocks to buy for long-term profits. It is a California-based company which deals in the manufacturing of electric vehicles, and has recently lured in high-profile executives from Tesla, Inc. (NASDAQ:TSLA), General Motors Company (NYSE:GM), and other rival car companies to further boost its growth trajectory. The company also owns CarHub, which provides car dealership services across the states of California and Arizona.
In June, Mullen Automotive, Inc. (NASDAQ:MULN) announced that it had filed more than 130 patents in 24 countries around the globe, in relation to its much-anticipated Mullen FIVE EV Crossover program. The company also become part of the Russel 2000 and 3000 Indices at the end of June, and has been added to the relevant growth and value indexes.
Mullen Automotive, Inc. (NASDAQ:MULN) is making moves within the automotive industry which is seeing growing consumer appetite for electric cars. The company is also working on next-gen battery technology for EVs. A total of 4 hedge funds were stakeholders in Mullen Automotive, Inc. (NASDAQ:MULN) at the end of Q1 2022, as compared to 3 hedge funds a quarter earlier.
6. Gevo, Inc. (NASDAQ:GEVO)
Number of Hedge Fund Holders: 7 Share Price (as of August 5): $3.03
Then there's Gevo, Inc. (NASDAQ:GEVO), a renewable fuels company which makes carbon-neutral gasoline, jet fuel, and diesel. It also makes high-protein animal feed to reduce wastage during its production process. Jets and cars around the world using sustainable biofuels would lead to a green revolution, and Gevo, Inc. (NASDAQ:GEVO) is critically positioned within an increasingly important industry.
In July, Gevo, Inc. (NASDAQ:GEVO) signed a sustainable aviation fuel sales agreement with American Airlines (NASDAQ:AAL) for 100 million gallon per year for a period of five years starting from 2026. This is Gevo's biggest fuel sales contract to date, and would generate over $2.75 billion in revenue. Alaska Air Group (NYSE:ALK) has also signed a similar fuel sales agreement with Gevo, Inc. (NASDAQ:GEVO).
A detailed review of the 900+ hedge funds in the Q1 database of Insider Monkey showed that 7 hedge funds were stakeholders in Gevo, Inc. (NASDAQ:GEVO), with combined positions worth $9.92 million. The same number of hedge funds were bullish on the company shares a quarter earlier as well.
Unlike costlier stocks such as Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Apple Inc. (NASDAQ:AAPL), investors can go for a penny stock like Gevo, Inc. (NASDAQ:GEVO) to position their portfolios for long-term profits.
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Disclosure. None. 10 Penny Stocks for Long-Term Profits is originally published on Insider Monkey.