In this article, we will discuss the 10 best fast-growing penny stocks to buy now.
Rate Cuts Are Around the Corner
September tends to be the worst month for the stock market, however 2024 might just be an outlier in history. Considering that the economy is doing worse than what was estimated earlier, the Fed needs to decide on a cut rate soon. We discussed this earlier in our article about the 10 Most Buzzing Stocks To Buy Now, here’s an excerpt from it:
“Investors are concerned that the FED will be slower to lower interest rates while inflation remains sticky and GDP growth begins to cool. Stovall expects three 25-basis point cuts this year, followed by another four in 2025. He thinks that while a 50 basis point cut is rare since it only ever happened twice, in 2001 and then 2007, it is still not unlikely given that the economy is worse than expected.
According to Stovall, investors need to be prepared for this increased volatility as the market digests the Fed’s actions and the potential impact on the economy. The market will likely remain uncertain until the Fed can find the right balance between slowing down the economy and stopping inflation, without causing a recession.”
Michael Feroli, JPMorgan’s chief US economist, recently discussed whether a 50 basis point cut is an overreaction. Feroli advocates for the Fed to implement a 50 basis point rate cut during its upcoming meeting on September 17-18, suggesting that this move would help return the economy to a neutral stance.
He thinks that although the economy is softening rather than collapsing, the Fed should not wait long enough for it to collapse before implementing a 50 basis point cut. The call for a significant rate cut comes in light of recent labor market data, and disappointing job growth, coupled with a downward revision of July’s figures, intensifying speculation regarding the Fed’s monetary policy direction.
Fed officials have been cautious in providing specific guidance regarding the size of the anticipated rate cut. Fed Chair Jerome Powell indicated that the central bank has largely succeeded in controlling inflation through high interest rates but expressed concerns about further weakening in the job market.
However, George Lagarias, chief economist at Forvis Mazars, believes that a 50 basis point rate cut by Fed this month could pose considerable risks to financial markets, and send a misleading signal about imminent recession risk. He thinks that unemployment alone does not translate into a recession, especially considering that China continues to deflate the global economy.
He advocates for a more measured approach, suggesting a quarter-point reduction instead of a 50 basis point cut, which he believes could imply a sense of urgency that may become a self-fulfilling prophecy. Lagarias says that unless there is a significant market disturbance, there is no cause for alarm, and a drastic cut could mislead both the markets and the economy.
According to CME’s FedWatch tool, 30% of market participants are expecting a 50 basis points cut while 70% are expecting a 25 basis point cut. Lagarias’ caution reflects a broader sentiment among economists who advise against hasty decisions that could destabilize financial markets.
Rate cuts are good for business and several small companies that have been under pressure due to higher rates could soar as interest rates come down. With that, let’s discuss the 10 best fast-growing penny stocks to buy now.
Methodology
To compile our list, we used a stock screener to screen for companies that are trading under $5 and have grown their earnings by double digits over the past year. We made an initial list of 25 stocks and then selected the ones that have grown their revenue by at least 30% over the past 3 years and are also popular among elite hedge funds and analysts. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Fast-Growing Penny Stocks to Buy Now
10. D-Market Elektronik Hizmetler Ve Ticaret Anonim Sirketi (NASDAQ:HEPS)
3-Year Revenue CAGR: 78.02%
Year-over-Year Revenue CAGR: 133.92%
Share Price as of September 5: $2.76
Number of Hedge Fund Holders: 7
D-Market Elektronik Hizmetler Ve Ticaret Anonim Sirketi (NASDAQ:HEPS) is a leading Turkish e-commerce platform, regarded as the Amazon of Turkey, that offers a range of products, from electronics to fashion, and operates a robust logistics network across the country. It has over 64 million members across 30 product categories, providing goods and services through its hybrid model, which combines first-party direct sales and a third-party marketplace.
The company’s innovative wallet, Hepsipay, has a user base of 15.7 million. It is well-positioned to become Turkey’s leading digital wallet, by enhancing customer retention and opening up new revenue streams through financial services.
D-Market Elektronik Hizmetler Ve Ticaret Anonim Sirketi (NASDAQ:HEPS) continues to expand its customer base and product offerings, recording a 22% increase in total orders, with gross merchandise value growing by 42.5% in the first quarter of 2024. There was also a 1.4% rise in active customers.
In FQ1, the company reported that its revenue improved 45% year-over-year to $344 million, despite Turkey’s challenging economic environment with nearly 70% annual inflation.
In late July this year, it announced a collaboration with Warner Bros. Discovery. As part of this, Premium members will receive a subscription to BluTV, a Turkish video-on-demand service recently acquired by Warner Bros. Discovery.
Turkey’s e-commerce sector is still in its early stages of digital adoption and presents a significant growth potential. The company’s earnings are expected to grow by 176.65% this year. Its strong revenue growth, profitability, financial position, and strategic market positioning make it a standout player. As of June 30, its stock was held by 7 hedge funds, with the largest stake being $10,827,672 by Hosking Partners.
9. Energy Fuels Inc. (NYSE:UUUU)
3-Year Revenue CAGR: 200.58%
Year-over-Year Revenue CAGR: 54.11%
Share Price as of September 5: $4.39
Number of Hedge Fund Holders: 11
Energy Fuels Inc. (NYSE:UUUU) is a mining company that extracts and sells uranium, a mineral used to create nuclear energy. It claims to have access to 70 million pounds of uranium and the potential to produce 6 million pounds annually and also produces other materials like vanadium and rare earth metals. The stock is held by 11 hedge funds, as of Q2 2024. The largest stake amounts to $9,223,229 by Bridgewater Associates.
Recently, the company successfully sold an additional 100,000 pounds of uranium on the spot market (for total proceeds of $8.59 million) and secured a new long-term sales contract with a U.S. nuclear utility at favorable pricing. Under this contract, it will deliver 270,000-330,000 pounds of uranium between 2026 and 2027, and potentially an additional 180,000-220,000 pounds until 2029.
It’s actively mining uranium from 3 of its conventional mines in preparation for a large-scale uranium processing campaign at its White Mesa Mill. This campaign is anticipated to commence later this quarter and continue through 2025 and 2026. It also entered into agreements to acquire 2 world-scale rare earth and heavy mineral sand projects.
As of June 30, 2024, the company held 938,000 pounds of U3O8 (a common chemical compound of uranium) and 25 tonnes of separated NdPr (two rare earth metals, neodymium, and praseodymium) in inventory.
In its second quarter, the company reported generating $8.71 million in revenue, with a 27.26% year-over-year improvement. The upcoming quarter is projected to have strong growth as well. Overall, the company is well-positioned for growth.
8. Immunitybio Inc. (NASDAQ:IBRX)
3-Year Revenue CAGR: 39.48%
Year-over-Year Revenue CAGR: 120.95%
Share Price as of September 5: $3.70
Number of Hedge Fund Holders: 13
Immunitybio Inc. (NASDAQ:IBRX) is a biotechnology company that focuses on developing new cancer treatments. It uses a specific approach called cellular immunotherapy which involves using the body’s immune system to fight cancer cells. 13 hedge funds were long in the company as of the second quarter of 2024.
In Q2, the company’s earnings per share missed analysts estimates by 33%, and it generated a $0.20 loss per share. However, this was an improvement from the $0.32 loss in Q2 2023. Revenue also missed estimates by 59%, and amounted to $1.05 million. Yet, the year-over-year revenue growth was 2,463.66%.
In August, the company started a new clinical trial to test ANKTIVA and AdHER2DC for endometrial cancer. ANKTIVA is a drug that helps the immune system fight cancer, and AdHER2DC is an experimental vaccine. ANKTIVA was recently approved for bladder cancer.
The AdHER2DC vaccine targets a protein called HER2, which is found in many endometrial cancer patients (gynecological cancer affecting 65,000+ women in the US each year). This vaccine is made using each patient’s own blood cells. The study is expected to enroll 60 participants and be completed in 2026. It’s sponsored by the National Cancer Institute.
With the company securing reimbursement coverage, all while enrolling patients in clinical trials, Immunitybio Inc. (NASDAQ:IBRX) has immense growth potential. The revenue is projected to grow 51% per annum on average in the next 3 years, compared to a 23% growth forecast for the Biotech industry in the US.
7. Indie Semiconductor Inc. (NASDAQ:INDI)
3-Year Revenue CAGR: 95.42%
Year-over-Year Revenue CAGR: 51.23%
Share Price as of September 5: $3.90
Number of Hedge Fund Holders: 16
Indie Semiconductor Inc. (NASDAQ:INDI) designs and makes specialized chips used in cars and other electronic devices. It provides automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicles, and in-cabin, connected car, and electrification applications.
Investors are interested in this company because it brings about immense revenue growth despite its small size. It has a 3-year revenue compound annual growth rate of 95.42%. In the second quarter of 2024, 16 hedge funds were long in the company. The biggest stake is held by Soros Fund Management amounting to $16,537,673.
The company recorded a revenue of $52.36 million in Q2, exhibiting a 0.47% year-over-year improvement. This revenue was lower than Street estimates and came with a loss per share of $0.09.
These results were similar to the overall car industry, as global economic problems slowed down car production by 2%. In the next quarter, sales are expected to grow slightly, although car sales are expected to fall by about 2.5%.
The main thing that sets this company apart from its competitors is that it is the only chip vendor offering all 4 of the key ADAS sensors (radar, vision, LiDAR, and ultrasound). Hence it can offer any combination of these sensors to its partners.
Its new radar front-end application was recently validated and made it a leader in the market for next-generation radar solutions. Management noted that the company’s new product launches and current customer status will enable the company to continue delivering growth above the market and reach outsized growth levels in 2025.
Baron Opportunity Fund stated the following regarding Indie Semiconductor, Inc. (NASDAQ:INDI) in its first quarter 2024 investor letter:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for advanced driver assistance systems and connected car, user experience, and electrification applications. Shares fell during the quarter as the company guided revenue growth for 2024 below Street expectations as its customers digest excess inventory in the early parts of the year. While indie conservatively still expects to be growing at a healthy 25%-plus year-over-year growth rate, well above the industry and peers, investors are concerned the inventory digestion could last longer into 2024 than initially expected despite management confidence in a strong second half of 2024 driven by over 20 new projects layering in through the year across various automakers and applications. Despite the near-term softening, we believe indie remains well positioned for growth over the medium and long term supported by its $6.3 billion design win backlog (versus $220 million in 2023 revenue), and its large program ramps in 2025, including a marquee radar-related rollout, the biggest program in the company’s history. We believe indie can continue to significantly outpace the broader industry and approach $1 billion in revenue by 2028 with premium margins, all supported by its contracted visibility.”
6. Agilon Health Inc. (NYSE:AGL)
3-Year Revenue CAGR: 50.60%
Year-over-Year Revenue CAGR: 65.62%
Share Price as of September 5: $4.17
Number of Hedge Fund Holders: 17
Agilon Health Inc. (NYSE:AGL) provides healthcare services for seniors through primary care physicians across different US communities, transforming healthcare for older people by focusing on the entire health of patients.
The company had 4 main goals in 2024: improving relationships with insurance companies, getting more primary care doctors involved, making data-driven decisions, and just generally working more efficiently. It has made substantial progress on the first plan, and insurance companies value their relationships because of the doctors involved. There are ongoing talks about adjusting the contracts to reflect higher costs and other issues, including ending some wasteful contracts.
As a result of focused planning, the company was able to record a 39% year-over-year improvement in revenue for Q2 2024. This growth was driven by the class of primary care physicians of 2024 and solid organic growth in existing classes. Medical services expenses increased to $1.37 billion due to the expansion of the 2024 class. The program, ACO REACH, which provides coordinated care to Medicare beneficiaries, added memberships slightly ahead of expectations at 132,000.
As a result of strong membership growth, the full-year membership guidance is now a midpoint of 519,000 members, but the full-year revenue guidance is slightly lowered due to a series of factors, including retroactive contract terminations. Investors are still interested in the company. As of June 30, 17 hedge funds held long positions in the company with the highest stake at $58,206,000 by Rock Springs Capital Management.
Artisan Mid Cap Fund stated the following regarding Agilon Health, inc. (NYSE:AGL) in its fourth quarter 2023 investor letter:
“We ended our investment campaigns in Agilon Health, inc. (NYSE:AGL) and BioNTech during the quarter. We initiated a GardenSM position in Agilon in early 2023 with a view that the company’s health care delivery model had the potential to provide both higher quality and lower cost care to seniors, which is a growing market due to an aging population. The company’s ability to scale while expanding margins was our biggest point of uncertainty, and it came to fruition as membership growth has tracked well but medical margins have struggled. After concluding that our probability of success has decreased, we decided to move on in favor of higher conviction ideas.”
5. Fortuna Mining Corp. (NYSE:FSM)
3-Year Revenue CAGR: 32.68%
Year-over-Year Revenue CAGR: 49.29%
Share Price as of September 5: $4.24
Number of Hedge Fund Holders: 17
Fortuna Mining Corp. (NYSE:FSM) is a Canadian mid-tier precious metals producer with a focus on exploration, extraction, and processing across Latin America and West Africa. It operates through several segments, like Bateas, Cuzcatlan, Mansfield, and Corporate, managing silver, gold, lead, and zinc mines.
Key assets like the Caylloma silver mine and the San Jose silver-gold mine have demonstrated solid production metrics, underlining the company’s robust operational capabilities. In the second quarter of 2024, the company produced 116,000 gold equivalent ounces, with gold sales accounting for 81% of the total revenue.
This total revenue was $259.97 million, reporting a 64.12% improvement from Q2 2o23. The earnings per share in this period were $0.11. 17 hedge funds are long in this company. Gotham Asset Management is the largest stakeholder with a position of $2,508,237, holding a total of 512,932 shares.
The Lindero mine’s leach pad expansion, which is the largest capital project, with a total 2024 construction budget of $42 million, will significantly enhance production capacity. It is currently 60% completed and expected to be done and ready to receive ore by Q4.
The optimization of the Seguela processing plant has already resulted in operational efficiencies, operating at an average rate of 208 dry metric tonnes per hour, which is 36% above its design capacity. Additionally, the company’s exploration efforts at the Kingfisher discovery within the Seguela mine present promising opportunities.
With ongoing investments in high-potential projects and a commitment to operational excellence, it is positioned for sustained growth, which makes this a fast-growing penny stock.
4. Autolus Therapeutics PLC (NASDAQ:AUTL)
3-Year Revenue CAGR: 51.85%
Year-over-Year Revenue CAGR: 40.22%
Share Price as of September 5: $4.10
Number of Hedge Fund Holders: 24
Autolus Therapeutics PLC (NASDAQ:AUTL) is a clinical-stage biopharmaceutical company in London that develops T-cell therapies to treat cancer and autoimmune diseases. It is now transitioning from a research and development-stage biotech to a commercial-stage one.
The company has partnered with many other healthcare players to drive up capital, such as BioNTech, which allowed it to add $600 million to its balance sheet in Q1 this year.
Blackstone Life Sciences has a deal with the company to provide up to $250 million in financing for its drug development and commercialization. Blackstone is interested in the company because of its potential to deliver lifesaving treatments to cancer patients.
In Q2, the net operating costs were up due to the ongoing investments in product development. Therefore, Autolus Therapeutics PLC (NASDAQ:AUTL) reported a net loss of $58.3 million this quarter, up from $45.6 million in Q2 2023.
Its AUTO6NG program has initiated patient treatment in the second quarter, and the company plans to share additional clinical data and publications related to its programs in the latter half of 2024.
It is expected that the company will soon be able to launch Obe-cel in the US market, with a PDUFA date set for November 16, 2024, and has submitted a Market Authorization Application (MAA) to the UK’s MHRA for Obe-cel.
Despite challenges, 24 hedge funds are long in its stock currently, with the highest stake valued at $53,147,159 by Deep Track Capital.
3. Vivid Seats Inc. (NASDAQ:SEAT)
3-Year Revenue CAGR: 79.58%
Year-over-Year Revenue CAGR: 19.65%
Share Price as of September 5: $4.63
Number of Hedge Fund Holders: 24
Vivid Seats Inc. (NASDAQ:SEAT) is a leading online secondary ticket marketplace that connects ticket sellers with buyers. Only registered sellers can partner with this marketplace.
Its loyalty program and engagement initiatives have led to a lot of repeat orders over time. However, the average order size decreased from $363 in Q2 last year to $322 this year, partially offsetting the increase in total marketplace orders.
The company faced notable event cancellations, including tours by Aerosmith and Jennifer Lopez. Aerosmith officially announced the cancellation of their “Peace Out” farewell tour on August 2, due to frontman Steven Tyler’s vocal cord injury.
Despite these challenges, it saw a significant increase in total marketplace orders (3.1 million orders), up 18% year-over-year in the second quarter of 2024. There was also a 19.92% year-over-year improvement in revenue, recording a total revenue of $198.32 million. The loss per share in this period was $0.01.
One of its projects, Skybox Drive, an automated pricing tool designed to enhance seller engagement and optimize ticket pricing, is in the final stage of its beta phase, with a formal launch expected soon. It’s still expecting slower growth in sales and revenue for the rest of the year. 2023 had many popular artists touring in large venues, a level of success difficult to repeat in 2024.
24 hedge funds are long in the company. The largest one is Anson Investments, with a value of $13,879,367. Vivid Seats Inc. (NASDAQ:SEAT) also repurchased $16 million worth of shares. Management says they’re aiming to benefit from the growth in women’s sports and soccer, which are gaining popularity.
2. Geron Corp. (NASDAQ:GERN)
3-Year Revenue CAGR: 50.60%
Year-over-Year Revenue CAGR: 205.11%
Share Price as of September 5: $4.29
Number of Hedge Fund Holders: 26
Geron Corp. (NASDAQ:GERN) is a biotechnology company that specializes in developing and commercializing therapeutic products for cancer. It is primarily working on a drug called imetelstat, sold under the brand name Rytelo, an anti-cancer medication.
In June, FDA approved Rytelo, as the first and only telomerase, which is an enzyme in cells that helps keep them alive by adding DNA to telomeres (the ends of chromosomes). Soon after that, Rytelo became commercially available in the US. As of July 31, the company had successfully contacted 60% of the top decile 1-4 accounts across both community and academic settings. About 160 patients have already tried the product.
Doctors and patients are excited about Rytelo’s potential to help people with lower-risk MDS, a type of blood cancer. Many hospitals and clinics are adding it to their list of approved treatments for patients who need blood transfusions. Healthcare providers can access Rytelo within 24-48 hours in the contiguous 48 states. There are about 1,320 patients in the US who could benefit from Rytelo.
The company filed for a patent term extension to protect its method of use patent, which could extend it until August 2037. There’s progress in efforts to expand reach and commercialize the treatment, including a submission of a marketing authorization application in the EU. The clinical trial for myelofibrosis is also progressing well.
In Q2 2024, 26 hedge funds held the company. Darwin Global Management is the largest shareholder with a position of $106,184,731. The revenue generated in this period was $882,000, exhibiting a 2,941.38% improvement from same period last year.
1. Grab Holdings Ltd. (NASDAQ:GRAB)
3-Year Revenue CAGR: 48.63%
Year-over-Year Revenue CAGR: 30.77%
Share Price as of September 5: $3.33
Number of Hedge Fund Holders: 34
Grab Holdings Ltd. (NASDAQ:GRAB) is a software company in Singapore that operates a superapp which provides food delivery, ride-hailing, and online payment services, extending to 700 cities in 8 Southeast Asian countries.
It also provides digital insurance and lending services to fulfill the financial requirements of merchants and consumers. In 2023, Fast Company, an American Business Magazine listed it as one of the most innovative companies in the Asia-Pacific region. It is held by 34 hedge funds. The largest stakeholder is Tiger Global Management LLC, with a value of $329,879,447.
In the second quarter of 2024, the company recorded $664.00 million in revenue, bringing about a year-over-year increase of 17.11%. During this period, the on-demand transactions grew strongly at 22% year-on-year.
Saver deliveries reached 28% of transactions from around 10% a year ago, with Saver users exhibiting average order frequency levels 1.9x higher than non-Saver users. It also attracted new users to Grab Holdings Ltd. (NASDAQ:GRAB) with 15% of new deliveries monthly transacting users joining the platform through Saver delivery.
It launched Superbank, a digital bank in Indonesia. All 3 of the company’s digital banks are now fully operational. Deposits in GXS Bank in Singapore and GX Bank in Malaysia grew by over 50% quarter-on-quarter to $730 million with total loan disbursals across GrabFi. Digibanks hit an annualized run rate of $2 billion in Q2.
Grab (NASDAQ:GRAB) has a near-monopoly position in Southeast Asia and its users are growing with every quarter. The stock is a promising play with healthy double-digit revenue growth and is poised to take further market share as its app becomes more popular in Southeast Asia. The company ended the second quarter with $2.4 billion in cash, which provides it a lot of resources to fund its growth.
While we acknowledge the growth potential of Grab Holdings Ltd. (NASDAQ:GRAB), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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