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10 Penny Stocks With Long-Term Growth Catalysts

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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.

10 Penny Stocks With Long-Term Growth Catalysts
10 Penny Stocks With Long-Term Growth Catalysts

Photo by Mohamed Hadji on Unsplash

Our Methodology

With this context in mind, here is our list of the 10 penny stocks with long-term growth catalysts. They were picked keeping in mind the upcoming growth catalysts for the companies. All the stocks listed below are priced under $5 per share.

The hedge fund sentiment around the stocks was gauged using data of 873 hedge funds tracked by Insider Monkey. The list is ranked according to the number of hedge funds having stakes in each firm.

The analyst ratings of the companies and their basic business fundamentals are also discussed to provide readers with some more context for their investment decisions.

Penny Stocks With Long-Term Growth Catalysts

10. BioLargo, Inc. (OTC:BLGO)

Number of Hedge Fund Holders: N/A

BioLargo, Inc. (OTC:BLGO) is placed tenth on our list of 10 penny stocks with long-term growth catalysts. The company works in the specialty chemicals sector. It develops and markets platform technologies. It is headquartered in California.

In earnings results for the second quarter, posted on August 17, BioLargo, Inc. (OTC:BLGO) reported a revenue of more than $0.46 million, up over 9.5% from the revenue over the same period last year. The firm has a market cap of more than $46 million.

In a recent letter to shareholders, BioLargo, Inc. (OTC:BLGO) outlined three strategic partnerships and the launch of a new product. The product, a new wastewater solution, is priced between $100,000-$500,000. The firm expects to deliver 25-35 new units of the product to customers in the first year with steady growth expected in the coming years.

9. BIGG Digital Assets Inc. (OTC:BBKCF)

Number of Hedge Fund Holders: N/A

BIGG Digital Assets Inc. (OTC:BBKCF) is ranked ninth on our list of 10 penny stocks with long-term growth catalysts. The firm operates from Canada and invests in firms working in the crypto industry. Recently, Netcoins, a subsidiary of BIGG Digital Assets, was registered as a restricted crypto dealer in Canada.

In earnings results for the second quarter, posted on August 24, BIGG Digital Assets Inc. (OTC:BBKCF) reported a revenue of C$4.5 million. The active users during the period were 19,000, up 1,880% year-on-year. Meanwhile, registered users stood at over 80,000.

On August 3, BIGG Digital Assets Inc. (OTC:BBKCF) announced that it had invested $200,000 in ZenLedger, a cryptocurrency tax software that is also backed by big names like Mark Cuban, Jon Staenberg, and Darren Lau.

8. American Battery Metals Corporation (OTC:ABML)

Number of Hedge Fund Holders: N/A

American Battery Metals Corporation (OTC:ABML) is a Nevada-based company that has interests in the exploration, mining, extraction, and recycling of battery metals. It is placed eighth on our list of 10 penny stocks with long-term growth catalysts.

American Battery Metals Corporation (OTC:ABML) stock has returned more than 988% to investors over the past twelve months. The company has a market cap of over $982 million and the short interest on the stock is 1.85%.

Last week, American Battery Metals Corporation (OTC:ABML) announced that it had raised $39 million in an oversubscribed equity financing. The funding is expected to go towards the construction of a Nevada plant that has 20,000 metric tonne per year battery recycling capacity.

7. Red Cat Holdings, Inc. (NASDAQ:RCAT)

Number of Hedge Fund Holders: N/A

Red Cat Holdings, Inc. (NASDAQ:RCAT) is a Puerto Rico-based firm that markets blockchain-based storage, analytics and software for the drone industry. It is ranked seventh on our list of 10 penny stocks with long-term growth catalysts.

In earnings results for the first fiscal quarter, posted on September 20, Red Cat Holdings, Inc. (NASDAQ:RCAT) reported a revenue of more than $1.39 million, up 152% from the revenue over the same period last year.

A subsidiary of Red Cat Holdings, Inc. (NASDAQ:RCAT), Skypersonic, was recently awarded a five year contract by the US National Aeronautics and Space Administration (NASA) to provide drone and rover software and hardware for a Mars mission. The stock soared 47% after the announcement.

6. Ra Medical Systems, Inc. (NYSE:RMED)

Number of Hedge Fund Holders: N/A

Ra Medical Systems, Inc. (NYSE:RMED) is placed sixth on our list of 10 penny stocks with long-term growth catalysts. The firm operates from California and markets excimer lasers for use in the treatment of vascular and dermatological diseases.

In earnings results for the second quarter, posted on August 16, Ra Medical Systems, Inc. (NYSE:RMED) reported a revenue of over $1 million, up more than 11% compared to the revenue over the same period last year.

Ra Medical Systems, Inc. (NYSE:RMED) recently obtained a patent approval and clearance from drug authorities for the clinical trials of DABRA 2 vascular lasers. The product is part of the nearly $900 million Peripheral Artery Disease (PAD) market. The new technology being marketed by the firm reduces the need for leg amputation in certain cases related to the disease.

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) are some of the top stocks to buy now, along with Ra Medical Systems, Inc. (NYSE:RMED).

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Disclosure. None. 10 Penny Stocks With Long-Term Growth Catalysts is originally published on Insider Monkey.