In this article, we will discuss: 10 Best New Penny Stocks To Buy Now.
Fears of a US recession are growing, sending stock markets down, and investors around the world are on edge. The US Bureau of Labor Statistics (BLS) released July job figures that were worse than anticipated, revealing only 114,000 new jobs generated in July compared to the predicted 175,000. These data alarmed investors, as did the disappointing latest earnings from tech giants. As a result, the manufacturing industry in the US had an eight-month low in activity and the unemployment rate reached a three-year high of 4.3% due to a decline in new contracts.
Monday was the worst day for Wall Street in nearly two years as key indexes fell on worries about a US recession. The average of the 500 largest publicly traded companies plummeted 3% to 5,186.33. However, the 500 large companies are still up more than 10% for the year.
Chris Weston, of the US online stockbroker Pepperstone, said global markets were “at a truly important juncture”. “What really matters now is whether money managers and traders feel sentiment has become too pessimistic, or if this deleveraging and risk aversion manifests into even higher volatility and drawdown.
Opinions among analysts regarding the gravity of the problem differ. James St Aubin, chief investment officer at Ocean Park Asset Management, “We’re witnessing the fallout from the curse of high expectations,”, while Art Hogan, chief market strategist at B. Riley Wealth, said that markets may be overreacting. He stated:
“This isn’t a Category 3 hurricane, but we are seeing how markets react to signs that the economy is normalising after turning hot in the first half of this year.” “Markets can find themselves overreacting and investors [latch] on to anything as an excuse to take profits.”
The 500 large companies have gained more than 15% this year, despite recent setbacks.
The market’s anxiety may be heightened by the possibility that fewer initial public offerings (IPOs) might take place this year. However, 154 IPOs were listed on the US stock market in 2023, but this was 85% fewer than the record-breaking 1,035 IPOs in 2021 and 15% fewer than the 181 IPOs in 2022, 82.5% fewer than in 2021. IPOs totaling 6,203 have occurred between 2000 and 2024. 2009 had the fewest, with just 62. With 1035 IPOs in total, 2021 established an all-time record, surpassing the previous high of 480 in 2020.
George Chan, EY Global IPO Leader, says:
“As 2024 unfolds, participants in the IPO market are entering uncharted territory. IPO candidates are influenced by the recent pivot in investors’ preference toward proven profitability in an altered interest rate landscape, and are doing this while facing the intricate dynamics of an intensified geopolitical climate and the buzz around AI. To succeed in this shifting environment, IPO prospects must remain flexible and prepared to seize the right moment for their public debuts.”
Recent data from EY Global IPO Trends Q2 2024 show that in 2024, the US IPO markets saw a strong start that increased global proceeds. On the other hand, the Asia-Pacific area had a poor start, which affected the worldwide volume overall. In the first half of 2024, the industrials (21%), technology (19%), and materials (11%) markets led the way in global IPO issuance, with India dominating in terms of deal volume. Meanwhile, the technology (21%), health and life sciences (17%), and industrials (15%) markets topped the IPO proceeds rankings, with the US attracting the lion’s share of these sectors. As the home to many of the world’s leading technology and healthcare companies, the US has a strong ecosystem for startups. Driven by favorable market conditions, expectation of interest rate cuts, and innovations in artificial intelligence (AI), IPO deal values have skyrocketed in both these markets. Moreover, a handful of large deals contributed to a 67% increase in proceeds from IPOs in the US in the first half of 2024.
With that said, here are the 10 Best New Penny Stocks To Buy Now.
Image: Depositphotos
Methodology:
In this article, we first used a stock screener to list down all stocks trading under $5 (as of the writing of this article) with high institutional ownership. We have limited our selection to stocks that went IPO over the past year. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 920 hedge funds in Q1 2024 to gauge hedge fund sentiment for stocks. We have used the stocks’ market cap as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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. 60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP)
Number of Hedge Fund Investors: 3
Market Cap: $2.51 million
A specialist pharmaceutical firm known as 60 Degrees Pharmaceuticals, Inc. develops and markets treatments for the avoidance and management of infectious diseases in the US. The company provides Arakoda as a malaria preventive medication. Additionally, it works on the development of Tafenoquine (Arakoda regimen), which is being tested in a Phase IIb clinical trial for COVID-19 indications; Tafenoquine, which is being studied in Phase IIA clinical trials for fungal pneumonia, babesiosis, and candidiasis; and Celgosivir, which is being examined in clinical studies for dengue and respiratory viruses.
SXTP is one of the best new penny stocks to buy now. The date of the IPO for SXTP is June 14, 2023. As of Q1 2024, the firm’s investors included 3 of the 920 hedge funds surveyed by Insider Monkey, in line with the prior quarter.
60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP) stock has fallen to a 52-week low in a volatile market environment, reaching a price of $0.12. This substantial decline represents a startling shift of one year, with the company’s stock value declining by 96.86%. Concerned observers have observed how SXTP shares slumped amid several difficulties, ultimately reaching this new low point. Per the analysts, the dramatic fall in the last year highlights the instability and challenges that the pharmaceutical industry faces, prompting concerns about the company’s strategy and its capacity to withstand the present economic storm.
On the bright side, 60 Degrees Pharmaceuticals has started a clinical trial to assess the safety and effectiveness of tafenoquine as a therapy for babesiosis. This is the first experiment of its sort, and by September 2025, preliminary findings should be available. Important initiatives, including the appointment of five board members and modifications to the incorporation certificate and equity incentive plan, have also been approved by the company’s shareholders.
In light of the company’s first-quarter financial report, which revealed a gross profit of $81,000 and a net profit of $309,000, Ascendiant Capital has decided to keep its Buy recommendation on the stock. Tafenoquine has been designated as an orphan drug by the US FDA, which provides market exclusivity, tax incentives, and fee exemptions to support the development of rare illness therapies. These represent the latest advancements in the company’s continuous endeavors to create novel therapies for contagious illnesses.
60 Degrees Pharmaceuticals (NASDAQ: SXTP) announced Q1 2024 net product revenues of $105.7 thousand, up by 515% compared to the same quarter the previous year due to ARAKODA’s domestic sales. While net income for common shareholders increased to $0.309 million, or $0.03 per share, from a $2.601 million loss, or ($1.13) per share, in Q1 2023, gross profit rose to $51.0 thousand from a $55.9 thousand loss. Higher R&D and commercial marketing spending caused operating expenses to rise to $1.41 million. The hiring of Kristen Landon as Chief Commercial Officer and the development of a clinical trial involving tafenoquine for the treatment of babesiosis are two significant commercial milestones.
The U.S. Army recently awarded 60 Degrees Pharmaceuticals (NASDAQ: SXTP) a contract for the commercial validation of new ARAKODA (tafenoquine) packaging after the company saw a 515% increase in sales in Q1 2024 compared to the same quarter preceding year. The potential of ARAKODA to treat babesiosis, a dangerous illness spread by ticks, is also being investigated by the company.
Analysts recommend a “buy” on SXTP. The stock has an average price target of $2.40 and offers investors a potential upside of 1,820.00%.
The FDA Orphan Drug Designation, a babesiosis clinical study, and successful ARAKODA sales put 60 Degrees Pharmaceuticals (NASDAQ: SXTP) in a strong growth position.
9. Cadrenal Therapeutics, Inc. (NASDAQ:CVKD)
Number of Hedge Fund Investors: 3
Market Cap: $6.48 million
Cadrenal Therapeutics, Inc. (NASDAQ:CVKD) is a biopharmaceutical firm developing tecarfarin, a late-stage new oral and reversible anticoagulant (blood thinner) targeted to prevent heart attacks, strokes, and fatalities from blood clots in people with uncommon cardiovascular conditions.
CVKD went public on January 20, 2023. As of the end of the first quarter of 2024, 3 hedge funds out of the 920 funds reported having stakes in Cadrenal Therapeutics, Inc. (NASDAQ:CVKD).
For the purpose of using tecarfarin to prevent thrombosis and thromboembolism in patients who have mechanical circulatory support devices, such as left ventricular assist devices (LVADs), Cadrenal has obtained orphan drug designation (ODD) from the FDA. This classification provides benefits such as clinical research tax credits and seven years of commercial exclusivity upon approval.
The company’s goal is to improve clinical development and regulatory strategies internationally, and it is investigating strategic collaborations and licensing agreements with The Sage Group. In eleven human clinical studies with over a thousand participants, tecafarin has shown to be effective; both healthy volunteers and those with chronic renal disease had typically excellent tolerance.
Moreover, Cadrenal has successfully managed its cash resources, preserving a high degree of financial flexibility and building up sizable cash reserves of $6.57 million for pivotal trials. In Q1, 2024, the cash grew by 63.00% from the same quarter the previous year.
CVKD has received a “strong buy” recommendation from analysts. CVKD has an average Wall Street analyst price target of $3.50, indicating a 764.62% possible upside from the company’s current $0.40 price.
It is one of the Best New Penny Stocks To Buy Now since investors are bullish on the stock. It has a diverse pipeline and enough cash for the clinical trials.
8. Shimmick Corporation (NASDAQ:SHIM)
Number of Hedge Fund Investors: 3
Market Cap: $121.71 million
In the US, Shimmick Corporation (NASDAQ:SHIM) offers essential infrastructure solutions, including water. The company works on projects related to mass transit, bridges, and military infrastructure. It also works on water and wastewater treatment infrastructure, water storage, and conveyance, including dams, levees, flood control systems, pump stations, and coastal protection infrastructure.
SHIM is one of the Best New Penny Stocks To Buy Now. The company made its IPO on November 17, 2023. As of the end of the first quarter of 2024, 3 hedge funds out of the 920 funds reported having stakes in SHIM.
SHIM’s stock price dropped by 43.34% due to a weak Q1 2024 earnings report. Roth/MKM analyst also maintained a Neutral rating but lowered its price objective from $9.00 to $3.50 in May, changing its perspective on the construction firm. This choice was made in response to Shimmick Corp’s first-quarter earnings announcement, which were much below projections. The company’s revolving credit facility had covenant clauses broken as a result of the underwhelming financial performance, which also caused a delay in the 10-Q report’s release.
The Roth/MKM analyst pointed out that even while there is a robust market for projects involving water, the problems with legacy projects that AECOM left behind are turning out to be more complicated than first thought. The company has responded to this by taking a more cautious approach, delaying its decision to change course until it sees more definitive evidence of better execution and cost control on key AECOM projects.
Investors are becoming more concerned about Shimmick Corp’s capacity to control expenses and complete projects successfully in light of the company’s recent difficulties. The company’s present financial difficulty has been highlighted in particular by the credit agreement breach.
In the upcoming time frame, investors will probably be intently monitoring the company’s stock performance as they search for signs of Shimmick Corp’s operational modifications and approaches to resolve the problems raised by Roth/MKM.
The way the market reacts to these events will indicate how investors feel about the company’s ability to get through its current problems. Shimmick Corp is still being watched closely as it works to overcome its operational issues and get back on solid financial footing.
However, 2 analysts have given Shimmick Corporation (NASDAQ:SHIM) a “buy” rating. The average Wall Street analyst price target for SHIM is $6.50, which presents a 64.97% upside potential from the current price of $3.94.
7. Genelux Corporation (NASDAQ:GNLX)
Number of Hedge Fund Investors: 5
Genelux Corporation (NASDAQ:GNLX) is a leading immuno-oncology company. Olvi-Vec, its main candidate, is an anticancer medication that specifically targets and eradicates cancer cells. Clinical study findings for Genelux’s Olvi-Vec have been encouraging, showing that the drug can penetrate and multiply within distant tumor sites.
GNLX is one of the Best New Penny Stocks To Buy Now. The company made its IPO on January 27, 2023. As of the end of the first quarter of 2024, 5 hedge funds out of the 920 funds reported having stakes in GNLX.
According to a report from Genelux Corporation on their clinical trials, the Phase 3 study for Olvi-Vec in platinum-resistant ovarian cancer is progressing, with 22 sites active and results anticipated by late 2025. Later this year, GNLX will also provide preliminary findings for small cell lung cancer and start Phase 2 studies for non-small cell lung cancer.
In terms of finances, at the end of Q1 2024, the company had $19.63 million in cash and equivalents, an 89.85% cash growth from the same quarter last year. According to the company, the cash reserves are expected to support operations through the first quarter of 2026.
The company also had a shelf registration statement in place, which allowed it to potentially raise $300 million in capital. Its loss in income decreased to $7.9 million in Q1 2023 from $10.4 million in Q1 2023, despite higher R&D costs. This suggests better financial effectiveness in the face of key developments.
Thomas Zindrick, President, Chairman, and CEO of Genelux stated:
“Our pivotal Phase 3 registration trial of Olvi-Vec in platinum resistant/refractory ovarian cancer continues to enroll patients,” “Looking ahead, we are excited about advancing Olvi-Vec into additional cancer indications through intravenous administration, a physician-preferred route of delivery, and seeking to further validate our hypothesis that Olvi-Vec may reverse resistance to platinum in multiple tumor types.”
“The Company expects to initiate our Phase 2 trial in recurrent non-small cell lung cancer in the second quarter of this year and to report interim data of our Phase 1b trial in recurrent small cell lung cancer later this year. Both trials are designed to intravenously administer Olvi-Vec and to re-challenge patients who previously failed platinum-based chemotherapy. The designs build on a previous clinical trial showing the benefit of intravenously administered Olvi-Vec in patients with lung disease (primary or metastatic) and on our Phase 2 data in platinum resistant/refractory ovarian cancer (PRROC).”
As of May, Benchmark has maintained its Strong Buy rating on Genelux Corp. (NASDAQ:GNLX) shares despite reducing its price objective from $30 to $25. The update takes into account revised share count projections in light of the company’s stock issuance.
Furthermore, Genelux Corporation (NASDAQ:GNLX) has received an average price target of $32.33, reflecting analysts’ bullish outlook on the stock. The price target reflects a potential upside of over 1,721.41% from the current stock price of $1.78. Meanwhile, analysts have given the stock a “ strong buy” rating.
6. Hesai Group (NASDAQ:HSAI)
Number of Hedge Fund Investors: 7
The Hesai Group (NASDAQ:HSAI) develops, produces, and markets three-dimensional light detection and ranging solutions (LiDAR) in Mainland China, Europe, North America, and internationally as its global leader. It does this through its subsidiaries. LiDAR and Gas Detection are the two segments that it operates in.
Hesai Group (NASDAQ:HSAI) deals with hardware machine learning. LiDAR products are sold by Hesai Group (NASDAQ:HSAI) for use in driver assistance platforms, logistics, cleaning, and other robot applications, as well as autonomous driving fleets. These programs are all dependent on machine learning. These sensors are also used by electric car manufacturer Tesla’s assisted driving platform FSD to calibrate its models, giving Hesai Group (NASDAQ:HSAI) access to a sizable market. Recognizing this possibility, Hesai Group (NASDAQ:HSAI) has partnered with CRATUS, a machine vision classification company, to create autonomous warehouse robots.
HSAI is one of the Best New Penny Stocks To Buy Now. The company made its IPO on February 10, 2023. As of the end of the first quarter of 2024, 7 hedge funds out of the 920 funds reported having stake in HSAI.
Hesai Group boosted total lidar shipments by 69.7% to 59,101 units in the first quarter of 2024 compared to the same time in 2023. The company projects a 4.5% upsurge in net revenues in Q2 FY2024. In Q1 2024, the gross margin increased to 38.8% from 37.8% in the same quarter the previous year.
As of March 31, 2024, cash and equivalents were still stable at $391.9 million. The company strengthened its partnerships and earned big design wins with four major international OEMs, indicating strong growth possibilities going forward.
Hesai Group (NASDAQ:HSAI) has earned automotive lidar design victories from General Motors, Ford, and a leading European company, with mass production scheduled to begin in 2025. The company has ADAS partnerships with 18 OEMs and Tier 1 suppliers, encompassing almost 70 vehicle models, and holds the largest global market share in automotive lidar. Hesai has a significant presence in both robotaxis and passenger automobiles, accounting for 37% of the global lidar market.
Due to its strong market position, the stock has earned a consensus “Buy” rating. Analysts predict an average price target of $12.9 within the next 12 months. The average price target represents a potential upside of over 238.58% from the current price of $3.81.
5. Turnstone Biologics Corp. (NASDAQ:TSBX)
Number of Hedge Fund Investors: 9
Turnstone Biologics Corp. (NASDAQ:TSBX) is a clinical-stage biotechnology company developing a differentiated approach to treat and cure patients with solid tumors by pioneering selected tumor- infiltrating lymphocyte (TIL).
The company made its IPO on July 21, 2023. Insider Monkey disclosed 9 funds that owned TSBX hedge funds in Q1 2024.
Piper Sandler maintained its $20.00 price target while reinforcing its Overweight rating on Turnstone Biologics (NASDAQ:TSBX) shares. In its 2024 first-quarter financial report, Turnstone Biologics gave a pipeline update. The company plans to release a clinical update on TIDAL-01, its flagship initiative, in time for its second-quarter 2024 earnings release.
The upcoming clinical update will focus specifically on a subset of patients with advanced colorectal cancer (CRC). Turnstone Biologics wants to illustrate the potential of its therapy where previous tumor-infiltrating lymphocyte (TIL) therapies have shown little success because current standard treatments are not very effective in this area. The company intends to concentrate on head and neck, uveal melanoma, and colorectal cancer (CRC), as these conditions are seen to be critical for demonstrating the uniqueness of its treatment.
Financially speaking, TSBX has cash and equivalents of $77.8 million, which should be sufficient to fund operations until the second half of 2025, per analysts. Turnstone Biologics extends its financial runway and makes it possible for the therapeutic pipeline to continue advancing by securing $20 million in non-dilutive finance. The forthcoming clinical update for Turnstone’s TBio-4101 is anticipated to generate significant investor interest and may mark a turning point in the company’s standing in the medical community. William Waddill’s nomination bolstered the company’s board, adding more than three decades of biotechnology industry experience.
Turnstone Biologics is believed to have sufficient funding to accomplish the first clinical proof-of-concept for its tumor-selective TIL platform. The TIDAL-01 program update is especially noteworthy since it shows the company’s dedication to developing its lead program and perhaps filling gaps in the treatment of colorectal cancer (CRC) and other malignancies.
Turnstone Biologics Corp. (NASDAQ:TSBX) has a positive analyst outlook with a “ strong buy” rating and an average 12-month price target of $19, suggesting a potential upside of over 705.08% from the current stock price of $2.36.
The company intends to differentiate its treatment in the oncology sector, as seen by its strategic focus on head and neck, uveal melanoma, and colorectal cancer. Turnstone Biologics is well-positioned to carry out its research and development activities in an attempt to create a new benchmark of care for patients with these types of cancer, since it has the financial runway to sustain its operations and clinical studies.
