16 Best Penny Stocks To Buy For 2024

Fahad Saleem

Mon, Dec 11, 2023, 3:30 PM10 min read

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In this article, we will take a detailed look at the 16 Best Penny Stocks To Buy For 2024. For a quick overview of such stocks, read our article 5 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 bought 500,000 shares of Lumen Technologies, Inc (NYSE:LUMN) for a transaction value of $549,450. Lumen’s CEO Kathleen Johnson also bought one 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 position Lumen 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).