In this article, we will look at the 10 Hot Penny Stocks On the Move.
Interest Rate Cuts and The Stock Market
The economy of the United States has stabilized, the risks of a recession have been delayed, and inflation continues to cool down. On August 30, Reuters reported that the Federal Reserve received a fresh confirmation regarding inflation continuing to ease. The personal consumption expenditure price index rose 2.5% year-over-year in July and inflation has stayed within the 2% goal set by the Fed. Fed Chairman has indicated that the “time has come to cut rates”.
Moreover, in another report by Reuters on the same day there were reports of the US dollar gaining as another key inflation measure fell in line with the forecasts. The Fed is expected to cut rates by 25 basis points this month. Moving forward markets have forecasted 100 bps of cuts by the end of 2024.
The stock market is already riding the tide of expected interest rate cuts. On August 20, CNBC reported that the stock market was climbing yet again, putting the S&P 500 and NASDAQ on track for their eighth positive session in a row, marking their longest winning streak this year.
Nick Colas, DataTrek Research co-founder in a CNBC interview indicated a few more positive points for even more upside for the stock market. He expressed that he feels positive about the market and the slight shuffle that caused some volatility a few weeks ago is now over. He sees the market getting back to July levels.
Colas also pointed out that the small caps and cyclicals lead the market. We have covered Chris Retzler, Needham’s small-cap growth portfolio manager’s bull case for small caps in 10 Best Penny Stocks To Buy According to the Media. Here’s an excerpt from the piece:
“On July 17, Chris Retzler, Needham’s small-cap growth portfolio manager, appeared on CNBC where he expressed optimism for the small-cap companies and suggested that we are in a cycle that will be good for many small-cap companies. The Russell 2000 index jumped 3.5% higher on July 16, hitting the highest levels since January 2022, and was up more than 10% in the previous week. This was one of the biggest rallies investors have seen in the past 4 years.
Retzler believes that small-cap stocks have been waiting for a drop in inflation and interest rate cuts. With inflation easing, interest rates are expected to go down as well. He also sees the market broadening, with small companies that have underperformed benefiting from a drop in inflation.”
Similar to Retzler, Colas is also vouching for small caps to continue outperforming the market. He believes that the market has high expectations from the Fed and the current upside is a result of the news. Moreover, he also mentioned that the stock market tends to react both before and after the cuts have been made and believes that the same pattern of growth will follow if not more after the rate cut.
With that, let’s look at the 10 hot penny stocks on the move.
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Our Methodology
To compile the list of 10 hot penny stocks on the move we used the Finviz stock screener. We set the price filter to under $5, current and average stock volume to over 750,000 and the performance filter to positive 30% during the last month. Using these filters we were able to accumulate a list of hot penny stocks on the move. Next we ranked these stocks based on their one month performance, as of August 30 2024. We have also added number of hedge funds that held the stock in Q2 2024.
Why do we care about what hedge funds do? 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 Hot Penny Stocks On the Move
10. Digital Turbine, Inc. (NASDAQ:APPS)
Share Price as of August 30: $3.22
Current Volume as of August 30: 2.7 million
Number of Hedge Fund Holders: 15
1-Month Performance as of August 30: 45.70%
Digital Turbine, Inc. (NASDAQ:APPS) is a leading mobile growth platform where advertisers, carriers, and OEMs succeed in the mobile market. In simple terms, it helps wireless carriers and device manufacturers manage and monetize devices.
The solutions provided by the company also enable app installation at the time of activation of mobile phones through its partnership with carriers and OEMs.
Though it is a small-cap company, Digital Turbine, Inc. (NASDAQ:APPS) has substantially expanded its offerings by a series of strategic acquisitions. It has acquired companies including AdColony, Mobile Poss, and Appreciate to unlock greater monetization for its services. In addition, it has more than 40 partnerships with major mobile phone manufacturers such as Samsung. Thereby, giving it a strategic edge over the market.
In terms of financial progress, the company returned to quarter-over-quarter revenue growth during the fiscal Q1 2025. It reported a 5% increase in revenue subsequently, reaching $25.2 million. App growth revenue was a major contributor to the overall progress and increased 11% subsequently.
Higher-performance brands of Digital Turbine, Inc. (NASDAQ:APPS) experienced strong demand and its expense discipline contributed to higher profit margins. Its EBITDA margins witnessed a gain of 135 basis points when compared to the previous quarter.
While it is true that the company faces headwinds due to slower mobile phone sales and other macroeconomic pressures, the company has demonstrated its robust fundamentals and profitable business model over its 5-year performance. During the past 5 years, Digital Turbine, Inc. (NASDAQ:APPS) has grown its top line by 35% and levered free cash flow by 78%.
Thereby analysts expect the company to bounce back stronger as soon as the macroeconomic environment gets better. The stock is undervalued as it is trading at only 9 times its forward earnings, which is a 62% discount to its sector. It was held by 15 hedge funds in Q2 2024, with total stakes worth $20.45 million. D E Shaw is the top shareholder of the company, with a position worth $7.79 million.
Greenhaven Road Capital made the following comment about Digital Turbine, Inc. (NASDAQ:APPS) in its second quarter 2023 investor letter:
“It is an understatement to say that the past year-plus has been frustrating for Digital Turbine, Inc. (NASDAQ:APPS) shareholders (us). It has become a smaller position through price declines and sales of shares as uncertainty increased on both the potential for new initiatives as well as their timing.
I often reflect on what went wrong. How did this go from a growth stock to a value stock? There have been two causes, in my opinion. The first is that their product delivering content (not apps) on phones lost T-Mobile as a customer – sometimes we are one day closer to a bad outcome: the loss of a customer. The second, and bigger issue was with their SingleTap product. SingleTap is a technology that “enables smartphone users to instantly install an app to their Android device with a single tap…bypassing the noise of the app store environment, and dramatically increasing conversions.” The higher conversion rates mean lower costs per app install or app opening…” (Click here to read the full text)
9. Eos Energy Enterprises, Inc. (NASDAQ:EOSE)
Share Price as of August 30: $2.67
Current Volume as of August 30: 11 million
Number of Hedge Fund Holders: 18
1-Month Performance as of August 30: 46.70%
Eos Energy Enterprises, Inc.. (NASDAQ:EOSE) is an industrial equipment company that specializes in energy storage solutions, specifically zinc-based batteries. Its flagship Znyth Technology Battery Energy Storage System (BESS) helps manage energy supply and demand. Moreover, its Z3 Battery Module offers longer battery timing and also acts as an alternative to lithium-ion batteries.
In addition to zinc-based batteries, the company also provides battery management systems and maintenance services. The competitive edge that allows Eos Energy Enterprises, Inc.. (NASDAQ:EOSE) to grow its revenue substantially stems from its addressable market that comprises utility-scale projects, microgrids, and industrial use.
EOS Energy Enterprises, Inc. (NASDAQ: EOSE) reported encouraging financial results for the second quarter of 2024, which led to its stock soaring more than 46% during the past 30 days.
The company revealed a significant boost of $13.8 million to its commercial pipeline and achieved 4-gigawatt hours of discharge energy. As a result, its revenue for the quarter reached $900,000.
The company booked orders worth more than $133 million and has a strong order backlog of $586.8 million, indicating long-term growth prospects. Moreover, it was able to secure a strategic investment from Cerberus Capital Management, which has boosted investor confidence in the future profitability of EOS Energy Enterprises, Inc. (NASDAQ: EOSE). The impact of the investment has already started to influence the company’s business as it signed a letter of intent for a 960 megawatt-hour deal with a new customer introduced by Cerberus.
The company has shown its ability to grow its revenue during the past 3 years by improving its top line by 146%. Moreover, the stock is popular among hedge funds and was held by 18 hedge funds in Q2 2024, with total stakes worth $98.34 million. Electron Capital Partners is the top shareholder of the company, with a position worth $9.74 million.
8. Red Cat Holdings, Inc. (NASDAQ:RCAT)
Share Price as of August 30: $3.11
Current Volume as of August 30: 674,000
Number of Hedge Fund Holders: 3
1-Month Performance as of August 30: 47.39%
Red Cat Holdings, Inc. (NASDAQ:RCAT) operates in the drone technology industry. Through its subsidiaries, the company integrates robotic hardware and software technologies to deliver actionable intelligence. It also provides data storage and analytic services for the drone industry. The company sells its products and technologies to military, government, and commercial customers.
The technology portfolio of the company ranges from its flagship Teal Drones (approved by the U.S. Department of Defense), Skypersonic technology that enables drones to complete inspections in GPS-denied environments, Fat Shark which provides first-person view for drone pilots, and much more.
Fiscal 2024 proved to be a record-breaking year for Red Cat Holdings, Inc. (NASDAQ:RCAT). During the year, the company grew its revenue by 286% to reach $17.8 million. The latest quarter was the most successful quarter as revenue doubled year-over-year to $6.4 million.
Two major factors contributed to the company’s growth, one being its strong organic growth and the other being its expanded drone portfolio topped with key acquisitions of companies such as FlightWave Aerospace and Sentien Robotics. The acquisition of FlightWave Aerospace alone is expected to add around $10 million to $20 million in revenue next year.
The strategic edge of Red Cat Holdings, Inc. (NASDAQ:RCAT) stems from its operating industry. As the company sells its products and technologies to the government, a hike in defense spending improves its revenue and order volumes.
Management is confident that the defense budget spending trends will continue to drive growth for the company. Moreover, its Teal 2 drones are setting the company apart from its competitors based on its strong performance. Red Cat Holdings, Inc. (NASDAQ:RCAT) has resumed its guidance for the next quarter and anticipates another record year moving to 2025.
RCAT was held by 3 hedge funds in Q2 2024, with total stakes worth $5.97 million. AIGH Investment Partners is the top shareholder of the company, with a position worth $5.65 million.
7. Clover Health Investments, Corp. (NASDAQ:CLOV)
Share Price as of August 30: $2.82
Current Volume as of August 30: 7.7 million
Number of Hedge Fund Holders: 9
1-Month Performance as of August 30: 59.32%
Clover Health Investments, Corp. (NASDAQ:CLOV) is a healthcare insurance company that provides Medicare Advantage insurance plans to beneficiaries in multiple states in the US. It also runs a proprietary software platform called the Clover Assistant that helps improve healthcare outcomes and reduces costs.
Two main business segments of the company include Insurance and Non-Insurance services. The Insurance segment provides Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) Medicare Advantage plans in 11 states.
Its Non-Insurance services segment includes the Clover Assistant platform that helps doctors detect and manage chronic diseases earlier by providing personalized data-driven insights for their patients.
The company’s ability to leverage artificial intelligence and data-driven technology into its assistant platform has provided a strategic edge over the market. It is differentiated in managing the clinical outcomes and the total cost of care for people with chronic diseases.
Moreover, Clover Health Investments, Corp. (NASDAQ:CLOV) allows its customers to choose between HMO and PPO insurance, with PPO customers having the leverage to choose their doctor. The company has grown its PPO plan insurance base considerably, with 95% of the members opting for the plan.
The Medicare Advantage (MA) segment has been a key contributor to the company’s growth and its organic insurance revenue grew 11% year-over-year. The strong MA momentum marked the first year of positive net income for the company. The Q2 2024, GAAP net income was $7.2 million after improving $36.1 million year-over-year.
The adjusted EBITDA also improved by $26.3 million year-over-year and management is now aiming for a meaningful adjusted EBITDA profitability for the year. It has also positioned itself in a position to self-fund its future business growth.
CLOV was held by 9 hedge fund holders in Q2 2024, with total stakes worth $18.94 million. Renaissance Technologies is the top shareholder with a position worth $13.86 million. Moreover, the stock has gained more than 59% over the past month, which is impressive for a penny stock.
6. Origin Materials, Inc. (NASDAQ:ORGN)
Share Price as of August 30: $1.49
Current Volume as of August 30: 1.5 million
Number of Hedge Fund Holders: 14
1-Month Performance as of August 30: 63.74%
Origin Materials, Inc. (NASDAQ:ORGN) is a sustainable material company that focuses on developing and commercializing sustainable materials derived from biomass. The company employs a patented technology platform that converts biomass to a variety of useful products such as packaging, clothing, automotive parts, and other consumer goods.
One of the notable products by Origin Materials, Inc. (NASDAQ:ORGN) includes 100% Polyethylene Terephthalate (PET) circular caps that enhance the recyclability of PET containers. During the Q2 2024 financial update, management announced signing its first customer for its PET caps business and anticipates generating over $100 million in revenue during the two-year contract.
Origin Materials, Inc. (NASDAQ:ORGN) is a fairly new company that went public in 2021. However, it has already developed a robust pipeline of potential customers and licensing partners. The total addressable market it is operating in is greater than $1 trillion with considerably less competition, thereby presenting a robust growth opportunity.
It achieved a significant milestone of producing over 1 million caps to date and tested its manufacturing unit by successfully running it at full speed while maintaining industry-high standards.
Moreover, to ensure successful delivery to its customers, management has entered into two strategic partnerships with Bachmann Group and Reed City Group. The Bachmann Group will assist in the end-to-end operation and automation of its production line, whereas the partnership with Reed City Group will open new opportunities for geographic expansion.
Origin Materials, Inc. (NASDAQ:ORGN) ended the second quarter with $132 million in cash and cash equivalents and generated $7 million in revenue slightly above the previous quarter’s performance.
Management expects strong revenue generation from Q1 2025 and investors have shown confidence in their guidance. The stock was up more than 63% over the past month. Moreover, 14 hedge funds held ORGN in 2024, with total stakes worth $3.25 million.
5. VOXX International Corporation (NASDAQ:VOXX)
Share Price as of August 30: $4.87
Current Volume as of August 30: 12 million
Number of Hedge Fund Holders: 10
1-Month Performance as of August 30: 76.45%
VOXX International Corporation (NASDAQ:VOXX) manufactures and distributes various electronic products mainly serving automotive, consumer electronics, and biometric product markets, which are also its main business segments.
Its product portfolio ranges from vehicle security systems and rear-seat entertainment systems to speakers, audio systems, and sophisticated iris identification technologies for biometric security.
The company announced its earnings results for FQ1 2025. Although the sales went down 18% year-over-year to $91.7 million. However, management has taken aggressive steps to improve margins and is working on restructuring to optimize the supply chain.
Despite facing serious global challenges VOXX International Corporation (NASDAQ:VOXX) was able to improve its gross margins to 27.7% on the back of its Premium Audio and Automotive segments demonstrating significant increase.
Management remains confident that the restructuring will result in profitability initiatives and has assured its investors that return to profitability in the second half of the fiscal year. The confidence in restructuring stems from the last round in fiscal 2019 which resulted in two profitable years with strong cash flow generation and stock price trading over $20 per share.
Should you invest in VOXX International Corporation (NASDAQ:VOXX)?
The company has not only maintained positive gross margins but has improved them by 310 basis points during the quarter. Moreover, with the restructuring underway 5% reduction in overhead is anticipated and management remains confident to become profitable. VOXX is also popular among hedge funds and was held by 10 hedge funds in Q2 2024, with total stakes worth $7.89 million. Kahn Brothers is the top shareholder with a position worth $5.56 million.
2 analysts have a strong Buy rating on the stock, with their median price target of $11 presenting a 100% upside from the current level.
4. CommScope Holding Company, Inc. (NASDAQ:COMM)
Share Price as of August 30: $4.22
Current Volume as of August 30: 2.5 million
Number of Hedge Fund Holders: 28
1-Month Performance as of August 30: 82.68%
CommScope Holding Company, Inc. (NASDAQ:COMM) is a technology company that provides the infrastructure and equipment needed to build and maintain communication networks, data centers, and entertainment systems.
The company operates through three main business segments including Connectivity and Cable Solutions (CCS), Networking, Intelligent Cellular and Security Solutions, and Access Network Solutions. It was held by 28 hedge funds in Q2 2024, with total stakes worth $65.19 million. FPR Partners is the top shareholder of the company, with a position worth $23.89 million.
The CCS segment of CommScope Holding Company, Inc. (NASDAQ:COMM) was a success and drove the overall performance of the company. The segment net sales were up 5% year-over-year to $728 million due to continued improvement in order rates and a strong performance in data center revenue. As a result of strong growth the adjusted EBITDA skyrocketed to $171 million posting a 107% increase year-over-year.
Management has been constantly evaluating to achieve cost efficiency and has decided to divest its Outdoor Wireless Networks (OWN) and Distributed Antenna Systems (DAS) businesses for $2.1 billion. The diversification will allow the company to effectively manage its cost structure and improve profitability.
CommScope Holding Company, Inc. (NASDAQ:COMM) remains focused on its profitable business segments. It announced acquiring Casa Systems during the second quarter for $45 million adding to the product and service portfolio of the company.
The company was able to bring its adjusted free cash flow of $69 million to positive figures when compared to the last quarter. Moreover, it has more than $543 million in cash and cash equivalents.
3. Sequans Communications S.A. (NASDAQ:SQNS)
Share Price as of August 30: $0.96
Current Volume as of August 30: 2 million
Number of Hedge Fund Holders: 8
1-Month Performance as of August 30: 92.28%
Sequans Communications S.A. (NASDAQ:SQNS) designs, manufactures, and supplies cellular semiconductor solutions primarily for the Internet of Things (IoT) markets. It provides 4G and 5G chips and modules for non-smartphone devices including RF Transceivers, System-on-Chip (SoC) Solutions, and LTE Modules.
The company’s semiconductor solutions have applications in smart mobility, logistics, smart cities, E-health, and more. It is based in Paris, France.
Sequans Communications S.A. (NASDAQ:SQNS) has gained significant investor attention since its latest earnings quarter, FQ2 2024 release. It has jumped up 92.28% during the past 30 days. A significant reason behind investors’ interest stems from Qualcomm Technologies acquiring Sequans’ 4G IoT technologies.
The company gets to maintain full ownership of the 5G intellectual properties and also retains the right to sell and enhance its existing 4G product portfolio. Management believes the transaction will enable the company to advance its Monarch, Calliope, and Cassiopeia 4G lines along with significant development to its 5G portfolio.
Moreover, it will also add significantly to the company’s balance sheet, providing it significant room for future growth. The quarter itself was encouraging as well. Sequans Communications S.A. (NASDAQ:SQNS) improved its revenue by 5.4% year-over-year, with License and services revenue accounting for 75% growth.
In addition, the gross profits of the company also grew from $7.5 million a year ago to $8.1 million, with operating loss decreasing significantly by around 31% year-over-year.
Moving forward management anticipates modest growth in the third quarter and much stronger growth in FQ4, due to the anticipated increase in products moving into mass production over the coming quarters.
The stock was held by 8 hedge funds in the second quarter of 2024, with total stakes worth $7.14 million. Lynrock Lake is the top shareholder with a position worth $4.36 million.
2. GeoVax Labs, Inc. (NASDAQ:GOVX)
Share Price as of August 30: $4.95
Current Volume as of August 30: 5.1 million
Number of Hedge Fund Holders: 1
1-Month Performance as of August 30: 115.22%
GeoVax Labs, Inc. (NASDAQ:GOVX) operates in the biotechnology industry and focuses on developing vaccines and therapies for infectious diseases and cancers. One of the major focuses of the company has been on COVID-19 vaccines, it is working on developing a next-generation vaccine called GEO-CM04S1, which is currently under trial to assess effectiveness.
Its operations are not limited to COVID-19 only, but is also working on developing treatments for tumors, cancer therapy, and other diseases such as Ebola and Zika.
The first half of fiscal 2024 was marked by numerous business wins for the company. GeoVax Labs, Inc. (NASDAQ:GOVX) received the BARDA Project NextGen award to advance the development of its dual-antigen next-generation COVID-19 vaccine. The initial award amounts to $24.4 million but has the potential to increase as much as $45 million.
Moreover, management also announced its Project NextGen CRO partnership with Allucent to conduct the Phase 2b clinical trial of GEO-CM04S1, with the award value of $367 million to $388 million.
These new awards not only add to the financials of the company but also have the potential to significantly boost the vaccine portfolio. Over the past quarter i.e. FQ2 2024, the company was able to reduce its net loss by around 14.5% indicating its progress towards profitability.
The company was held by 1 hedge fund, Armistice Capital, with a position worth $254,800, in Q2 2024.
1. Applied DNA Sciences, Inc. (NASDAQ:APDN)
Share Price as of August 30: $2.21
Current Volume as of August 30: 13 million
Number of Hedge Fund Holders: 2
1-Month Performance as of August 30: 402.63%
Applied DNA Sciences, Inc. (NASDAQ:APDN) is a biotechnology company that specializes in the development and commercialization of DNA and RNA detection. The company utilizes polymerase chain reaction (PCR) technology to detect genetic elements.
The three core segments of the company include Therapeutic DNA Production Services, MDx Testing Services, DNA Tagging, and Security Products and Services. With a commitment to innovate and enhance healthcare and security through DNA technologies, Applied DNA Sciences, Inc. (NASDAQ:APDN) has positioned itself for the growing demand for therapeutics and diagnostics.
The company faced a $2 million decline in revenue during the FQ3 2024 due to an expected decline in COVID-19 testing service revenue. However, it achieved significant steps against its commercial roadmap that ensures strong revenue generation for the coming quarters.
Applied DNA Sciences, Inc. (NASDAQ:APDN) is on track to launch a GMP facility for LineaTM IVT templates by September 30. The facility will have the capacity to produce up to 15 million doses of mRNA vaccines. Moreover, the company has also received full approval from the New York State Department of Health for a laboratory-developed test and launched its TR8 PGx pharmacogenomic testing service.
Management also announced a multi-year agreement with a group (whose name was not disclosed) that has the potential to substantially expand its cotton tagging addressable market. CEO, Dr. James Hayward is confident that these developments will result in a positive year-over-year revenue growth starting from fiscal year 2025.
Applied DNA Sciences, Inc. (NASDAQ:APDN) was held by 2 hedge funds in Q2 2024, with total stakes worth $64,000. Altium Capital is the top shareholder, with a position worth $35,184. Moreover, the stock has soared over 402.63% during the last 30 days, making it one of the hot penny stocks on the move.
While we acknowledge the potential of Applied DNA Sciences, Inc. (NASDAQ:APDN) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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