Penny stocks, known for their riskiness, experience rapid surges and falls due to low volume, affordable pricing and operational factors. However, for informed investors, there are penny stocks to buy that offer a chance to secure substantial gains at low costs.
Recent developments suggest a high likelihood of consecutive rate cuts in 2024. This is a scenario where penny stocks typically thrive. However, expectations should be tempered in comparison to the cheap debt era. With anticipated rates around the low 5% range for the remainder of 2024 before dropping to the high 4s next year, compared to today’s rate of 5.5%, this unique position could catalyze a surge in penny stocks.
Years of austerity and rate hikes, they weeded out the weakest penny stocks. The “worst in class” companies disappeared via bankruptcy, privatization, and acquisition. The survivors are now stronger, more efficient and competitive. A penny stock that successfully weathered the past few years is primed to grow as rates dip. But don’t want until then. These penny stocks to buy are in a position to transcend micro-cap status and achieve success.
Ballard Power Systems (BLDP)
A fuel-cell manufacturer, penny stock Ballard Power Systems (NASDAQ:BLDP), targets a unique market — heavy automotives like buses and trains and portable power solutions on construction sites. The fickleness of retail consumer demand can cripple companies when market and business cycles swing out of favor, as observed with Tesla (NASDAQ:TSLA) in recent months. However, Ballard secures a foothold in reliable industries by first targeting enterprise-level clients and anchoring future strategic pivots.
Late last year, Ballard secured an order for over 177 hydrogen fuel cell engines for buses across Europe. This contract, marking the continent’s largest deployment of hydrogen fuel-powered buses, signifies a pivotal moment for the energy penny stock leader.
For some, Ballard’s rapid cash burn raises concerns. However, the company’s recent earnings report highlighted efforts to mitigate this burn. Moreover, the absence of debt on the company’s balance sheet prevents the overburdening of the company with unsustainable leverage in the current climate of high interest rates.
Desktop Metal (DM)
The climbing rates posed a significant challenge for the 3D-printing penny stock company Desktop Metal (NYSE:DM), causing its share price to plummet from a high of $30 in 2021 to under $1 today, categorizing it as a literal penny stock. However, Desktop Metal emerged stronger from this test of its resilience, positioning itself for a potential surge in the next penny stock bull market.
Post-ZIRP, executives, board members and shareholders assimilated tough lessons that contradicted the previously comfortable “growth at all costs” mindset prevalent during periods of cheap debt. Penny stocks like Desktop Metal, successfully navigating these changes, emerged financially stronger and more adept at navigating future economic downturns. They’re also primed to capitalize on favorable market shifts.
Desktop Metal showcased improved financials in its fourth-quarter filing, notably cutting its net loss by more than half from $740.3 million in 2022 to $323.4 million by the end of 2023. Additionally, the company reduced its burn rate by 25% and significantly increased its cash reserves. Even more encouraging is the company’s projection of reaching breakeven EBITDA in the second half of 2024, suggesting that there is still an opportunity to invest before Desktop Metal begins generating profits.
Taboola (TBLA)
The penny stock Taboola (NASDAQ:TBLA) is trading fairly flat thus far in 2024, rising just 2.14% since January 1st. Still, its 1-year 75% increase points to bullish momentum remaining, meaning investors can accumulate shares now before a larger leg up.
Even if Taboola is new to you, you’ve likely seen its product on popular online platforms such as CNBC, Business Insider and Apollo Asset Management’s (NYSE:APO) Yahoo! platform, among others. Taboola enables websites to monetize their traffic by displaying diverse advertisements while offering businesses a distinctive advertising platform to boost their visibility. Boasting over 15,000 advertisers and nearly 600 million daily active users, Taboola plays a pivotal role in shaping the online advertising landscape.
Recently, Taboola revealed an exclusive multi-year expansion partnership with Advance Local to enhance user engagement and seize new marketing opportunities. Scott Lawrence, Senior Director of Programmatic Strategy at Advance Local, praised the partnership in recent discussions, saying, “Over the past eight years, Taboola has proven to be an outstanding partner, contributing to our engagement with readers through high-quality content and supporting local media companies with innovative business solutions.” Digital marketing is a perma-growth industry; this penny stock is one of the few ready to capitalize on its many opportunities.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
