In this article, we will take a look at the 10 best penny stocks to buy in September. If you want to skip our discussion on the current US economic situation, go directly to the 5 Best Penny Stocks to Buy in September.
The US equity markets have been experiencing a sell-off in the past three weeks as the S&P 500 Index and the Dow Jones Industrial Average have lost over 7.5% of their value. Meanwhile, the NASDAQ Composite Index is down around 9.9% during this brief period. The NASDAQ Composite Index closed in the red for the past seven consecutive sessions before rising 2.1% on September 7. This was the biggest single-day rise for the tech-heavy index in the last four weeks.
The broad sell-off has been due to the aggressive path taken by the US Federal Reserve to control raging inflation hovering around a four-decade high. Federal Reserve Chairman Jerome Powell has alluded that authorities would go to any extent to bring inflation back to the 2% target by increasing interest rates, even if this measure results in unemployment. Experts are anticipating a 0.75% increase in benchmark interest rates when the members of the Federal Reserve convene later this month on September 20 and 21. The Federal Reserve has taken a hawkish approach this year as it has increased the benchmark interest rates from nearly 0% in March to a range between 2.25% and 2.5% in July. Some experts anticipate the benchmark interest rate to touch the 4% level by the end of this year. The move of increasing interest rates has not harmed the labor market till now, as employers added 315,000 jobs during August. This made it 20 consecutive months of continuous growth in the job market. Despite the increase in jobs, the unemployment rate in the US jumped from 3.5% to 3.7% as more people entered the labor market.
Given all these developments taking place in the broader market, some investors have exited the market and have decided to observe the uncertainty from the outside. On the other hand, shrewd value investors like Warren Buffett are taking advantage of the certainty and buying up stocks as they see the market recovering in the long run. The Oracle of Omaha increased his stake in three of his top 10 holdings during Q2 2022. He also most recently received the go-ahead to buy up to half of Occidental Petroleum Corporation (NYSE:OXY). According to the most recent filings, Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B) currently owns nearly 30% of the Houston, Texas-based oil and gas exploration and production (E&P) company. However, blue-chip companies such as Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT) do not offer the same possibility of gains as penny stocks. For instance, if you own a penny stock that has a price of $1 and it observes a rise of 10 cents, this means that you have made a return of 10% on your investment. Meanwhile, if this 10 cents increase took place in a stock that had a price of $100, the return would have been negligible.
Photo by Austin Distel on Unsplash
Our Methodology
We have shortlisted penny stocks that have a price of less than $5 as of September 9. These companies have important growth catalysts in sight and are likely to offer significant upside to investors in the future.
Best Penny Stocks to Buy in September
10. Hempacco Co., Inc. (NASDAQ:HPCO)
Hempacco Co., Inc. (NASDAQ:HPCO) is a San Diego, California-based company that is involved in manufacturing cannabidiol (CBD) and cannabigerol (CBG) functional hemp cigarettes.
The company is looking to disrupt the $1 trillion tobacco industry through its offering that is considered a healthier alternative tobacco-based cigarettes. Hempacco Co., Inc. (NASDAQ:HPCO) became public on August 30 through an initial public offering (IPO) of $6 million. The company sold one million shares at an IPO price of $6. During the first trading session, Hempacco Co., Inc. (NASDAQ:HPCO) stock price rocketed to an all-time high of $41.80 before closing at $7.78. This still reflected a 30% rise from the IPO price.
It should be noted that 18 states in the US have completely legalized the use of cannabis for personal reasons, and 37 states have made it legal for medical use. Furthermore, the US Senate has put forward a bill to legalize cannabis at the Federal level. If the bill gets approved by the Senate, then US President Joe Biden would have the option to make it into law. These developments would play in favor of Hempacco Co., Inc. (NASDAQ:HPCO).
9. Virax Biolabs Group Limited (NASDAQ:VRAX)
Virax Biolabs Group Limited (NASDAQ:VRAX) is a UK-based biotech company working on preventing, detecting, and diagnosing viral diseases.
The in-vitro diagnostics (IVD) market is expected to compound annually at an average rate of 4.5% from 2021 to 2027. The COVID-19 pandemic gave the IVD market a significant boost, and now the emergence of the monkeypox virus has resulted in the first death in the US state of Texas on August 30. Nearly 90 countries have reported around 48,000 cases since early May 2022. Virax Biolabs Group Limited (NASDAQ:VRAX) has a testing mechanism in place to check the presence of monkeypox in a patient through its real-time polymerase chain reaction (PCR) detection test. Virax Biolabs Group Limited (NASDAQ:VRAX) will be one of the leading corporations in the fight against this disease. The US government has already declared monkeypox a national public health emergency.
These factors are likely to give a boost to the share price of Virax Biolabs Group Limited (NASDAQ:VRAX), warranting its inclusion in our list of the 10 best penny stocks to buy in September.
8. Mullen Automotive, Inc. (NASDAQ:MULN)
Number of Hedge Fund Holders: 2
Mullen Automotive, Inc. (NASDAQ:MULN) is a Brea, California-based automotive company focused on electric vehicles (EV). According to some observers, the company is making a major push on battery technology, which is considered one of the biggest segments in the US.
Mullen Automotive, Inc. (NASDAQ:MULN) has revealed stellar results for its solid-state polymer battery test, which is expected to give vehicles a range of up to 600 miles. Solid-state batteries are smaller in size and charge quicker, as compared to lithium-ion batteries installed by companies like Tesla, Inc. (NASDAQ:TSLA). The company’s facility in Monrovia, California, will have the ability to produce 30,000 battery packs annually following certain developments. Some experts believe that Mullen Automotive, Inc. (NASDAQ:MULN) has industry-leading technology and just needs to ramp up its operations. The company is also anticipating an order for its electric cargo van from a Fortune 500 company.
As of Q2 2022, 2 hedge funds held a stake in Mullen Automotive, Inc. (NASDAQ:MULN).
7. Nuwellis, Inc. (NASDAQ:NUWE)
Number of Hedge Fund Holders: 2
Nuwellis, Inc. (NASDAQ:NUWE) is an Eden Prairie, Minnesota-based commercial stage company working on improving the quality of life of patients suffering from heart failure and related conditions like fluid overload.
The stock is being considered one of the best penny stocks to buy in September due to multiple reasons. Nuwellis, Inc. (NASDAQ:NUWE) announced on August 25 that it had received a patent from the US Patent and Trademark Office for its innovation that improves the fluid balance and safety in patients undergoing dialysis and hemofiltration. For the most recent quarter, the company posted revenue of $2.21 million, surpassing the consensus forecast of $2.20 million. Nuwellis, Inc. (NASDAQ:NUWE) stock price gained as much as 90% on August 30 after the company revealed clinical data that supported the use of ultrafiltration with Aquadex FlexFlow System in high-risk postoperative coronary artery bypass grafting patients.
Overall, 2 hedge funds held a stake in Nuwellis, Inc. (NASDAQ:NUWE) at the end of Q2 2022.
6. Summit Therapeutics Inc. (NASDAQ:SMMT)
Number of Hedge Fund Holders: 5
Summit Therapeutics Inc. (NASDAQ:SMMT) has the sixth position on our list of the ten best penny stocks to buy in September. It is a Cambridge, Massachusetts-based clinical-stage drug discovery and development company that is working on promoting innovative treatments for diseases.
Ridinilazole is the main drug candidate in Summit Therapeutics Inc.’s (NASDAQ:SMMT) portfolio. The antibiotic is at the preclinical stage and is used to treat Enterobacteriaceae. It is a pathogen that is resistant to the impact of conventional antibiotics. According to the estimates presented by the company, one million people are infected by the disease annually. The Center for Disease Control (CDC) has highlighted the disease as an urgent matter.
Summit Therapeutics Inc. (NASDAQ:SMMT) has also diversified its operations to focus on the human gut microbiome and oncology segment. Moving towards a niche in the biotech sector is considered a prudent move by observers as the economics related to the development and commercialization of antibiotics is unfavorable for corporations.
Penny stocks aren’t as popular amongst the hedge funds as notable companies like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT). Nevertheless, 5 hedge funds reported owning a stake in Summit Therapeutics Inc. (NASDAQ:SMMT) as of Q2 2022.
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Disclose. None. 10 Best Penny Stocks to Buy in September is originally published on Insider Monkey.
