Penny stocks are not everyone’s cup of tea due to their inherent volatility, and any stock not named Nvidia (NASDAQ:NVDA), up 152% this year, is struggling for relevance.
Notwithstanding, aggressive investors choose penny stocks for the prospect of making monster returns with only a few cents and dollars. After all, some of the world’s most successful companies are former penny stocks, with Apple (NASDAQ:AAPL), Monster Beverage Corporation (NASDAQ:MNST), and Ford (NYSE:F) being classic examples.
Goldman Sachs (NYSE:GS) and Bank of America’s (NYSE:BAC) bullish 2024 economic forecasts all add to the thesis.
Goldman Sachs has raised its target for the S&P 500 at the end of the year to 5,200, thanks to falling inflation and a “dovish” Fed attitude. Meanwhile, Bank of America, with a goal of 5,000, believes the economy has adjusted to higher rates and inflation has stabilized.
These forecasts can also get supercharged after the US election in November and when the three interest rate cuts take place. This means the time for investing in penny stocks is now, as these offer up to 218% in potential upside.
Phunware (PHUN)
Phunware (NASDAQ:PHUN) continues to retain a consensus of “strong buy,” with analysts citing its mobility and digital transformation potential as highlights. Analysts are predicting an average price target of $18, indicating a potential upside of 218%, even if the stock is up 36% in 2024.
Phunware’s excellent stock performance is partly due to multi-year renewals of its mobile solutions with major hotel and healthcare customers. This boosted the company’s position in corporate cloud platforms for mobile engagement.
Having inked a multi-year agreement with PAL+ and Escapades Memphrémagog, Phunware is also growing in the hotel industry.
As part of a bigger strategy to use blockchain technology to increase engagement and revenue, Phunware also continuously enhances its digital asset ecosystem by introducing new currencies like PhunCoin and PhunToken.
Apart from its strides in blockchain technology and hospitality, Phunware is also performing financially. It exceeded its internal revenue targets for the first quarter of 2024, reduced its net loss by 46%, and reported an almost 1,500% increase in its cash position. PHUN also has an “at-the-market” equity program in place to offer up to $120 million for further expanding its operations or shoring up its balance sheet.
Canaan (CAN)
Canaan’s (NASDAQ:CAN) dominance in bitcoin mining attracts blockchain and AI investment. However, it’s down 50% this year, as investors take profits after the fourth Bitcoin halving on April 20.
However, Canaan can reverse the negative momentum through its newest offering, the Avalon A1566, revealed at the Bitcoin Asia show in Hong Kong. The A1566 is the most powerful Bitcoin miner the company has made so far and is part of the Avalon A15 line.
Demand for the product is strong. In June, Canaan received a big order from Cipher Mining Technologies to buy its Avalon Miner A1566.
However, the best thing Canaan can do to boost investor confidence is to perform on the bottom line. Canaan’s unaudited first-quarter 2024 financial results reveal earnings of $35.1 million, above analysts’ expectations, a 182.1% increase in mining revenue to $10.5 million, and the narrowing of CAN’s net loss by 71.7% from the previous period to $39.4 million. This demonstrates a bright start to the year and a substantial mining revenue increase between quarters.
Unsurprisingly, thanks to excellent financials and the hype surrounding crypto, CAN has a potential 180% upside. However, only one analyst is reporting this, so take it with a grain of salt when investing.
Northern Dynasty (NAK)
Northern Dynasty (NYSEAMERICAN:NAK) holds a big stake in the Pebble Project, a world-class copper, gold, molybdenum, and silver mine, and analysts are projecting big things for NAK, with 173% possible upside. However, the project’s legal issues make NAK stock, which trades at 29 cents, riskier even for penny stocks.
On the positive side, Northern Dynasty’s Pebble Project Preliminary Economic Assessment (PEA) shows strong expected financial results and a lot of promise for metal output, such as copper, gold, and rhenium.
In addition, Northern Dynasty received an initial advance under the second tranche of a modified royalty arrangement. With this arrangement, financing for the Pebble Project is guaranteed, and the royalty holder will receive a portion of any future production of gold and silver. Northern Dynasty also executed a convertible note and private placement for $23 million to finance the Pebble Project.
Since the Clean Water Act provides the EPA with broad regulatory authority, the project’s legal challenges are significant. Earlier this year, Northern Dynasty sued the federal government twice for blocking the Pebble mine. NAK recently moved to add U.S. Army Corps of Engineers allegations to its EPA case.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
