In this article, we discuss the 10 penny stocks Robinhood traders are buying in 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Penny Stocks Robinhood Traders are Buying in 2021.
Robinhood Markets, the California-based financial technology firm that owns popular stock trading application Robinhood, is expected to debut on the stock market in the coming months, targeting a record market valuation of over $40 billion. Robinhood has gained prominence in the past few months as millions of new investors use the platform, primarily because it offers commission-free stock trading services, does not have a minimum account balance requirement, and has made trading essentially hassle-free.
The application was developed by Vladimir Tenev and Baiju Bhatt to unleash the micro-investor potential that had been bubbling away under the surface of the financial world for years but was held back by exuberant transaction fees and minimum investment requirements on the open market. In 2014, more than 300,000 people signed up for the application before launch. By 2015, this number had more than doubled. In May 2020, the New York Times claimed that Robinhood had 13 million active users. Over the past year, 3 million more have joined.
The average age of these users is around 30 and most bet on penny stocks with explosive growth potential. However, the interest in penny stocks does not hold them back from short-term plays on large-cap or mega-cap growth stocks like Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG). Through the month of May, Tesla, Inc. (NASDAQ: TSLA) was the most popular stock on the application by a country mile with Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG) also featured.
However, penny stocks still remain some of the most traded on the application in terms of volume. The technology, biopharma, and marijuana industries are some of the markets that these retail investors seem most interested in, with most popular penny stocks falling in one of these three categories. Robinhood has been thriving off these trends, generating more than $680 million in revenue last year, a more than 500% increase compared to 2019, as the coronavirus lockdowns dramatically increased interest in digital trading.
The larger trends towards digital and fintech are expected to continue driving market trends in the coming months, further pummeling the traditional finance world that has been hit hard by tech-led disruption. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 penny stocks Robinhood traders are buying in 2021. These stocks were selected keeping in mind their popularity on the Robinhood application and their impressive returns in recent months.
Penny Stocks Robinhood Traders Are Buying in 2021
10. Safe Bulkers, Inc. (NYSE: SB)
Number of Hedge Fund Holders: 8
Safe Bulkers, Inc. (NYSE: SB) is a European transportation company founded in 2007. It is ranked tenth on our list of 10 penny stocks Robinhood traders are buying in 2021. The company’s shares have returned more than 248% to investors over the past year. The vessels owned by the company transport cargo such as coal, grain, and iron ore, among others. The firm owns more than 40 vessels for cargo transport, which include models such as Panamax Kamsarmax, Panamax, and Capesize class vessels.
Safe Bulkers, Inc. (NYSE: SB) posted earnings results for the first three months of 2021 on May 5, reporting earnings per share of $0.14, beating market predictions by $0.03. The revenue for the first quarter of 2021 was over $62 million, up 36% year-on-year.
On May 12, Safe Bulkers, Inc. (NYSE: SB) announced that it had entered into an agreement for the purchase of two new vessels, scheduled to be delivered within two years, and the sale of two older ones for more than $44 million, as part of a fleet renewal strategy.
At the end of the first quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $16.3 million in Safe Bulkers, Inc. (NYSE: SB), up from 5 the preceding quarter worth $6.7 million.
9. Uxin Limited (NASDAQ: UXIN)
Number of Hedge Fund Holders: 3
Uxin Limited (NASDAQ: UXIN) is a Chinese holding company founded in 2011. It is placed ninth on our list of 10 penny stocks Robinhood traders are buying in 2021. The stock has offered investors returns exceeding 246% over the course of the past twelve months. The holding company is the owner of an ecommerce platform for used cars in the Asian country. An application called Uxin Auction facilitates dealings in used cars. The firm also offers other services related to cars, like financing and other value-added auto products.
On April 28, Uxin Limited (NASDAQ: UXIN) stock surged more than 26% on the back of strong earnings reported by the company for the third fiscal quarter. Over the period, the firm also announced that it had transitioned to an inventory model entirely.
In the third fiscal quarter, Uxin Limited (NASDAQ: UXIN) posted gross revenues of over RMB322 million, up more than 30% compared to the gross revenue over the same period last year. The firm also announced that it was expecting a new investment of up to $300 million.
Out of the hedge funds being tracked by Insider Monkey, Hong Kong-based investment firm Hillhouse Capital Management is a leading shareholder in Uxin Limited (NASDAQ: UXIN) with 2.2 million shares worth more than $2.6 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Uxin Limited (NASDAQ: UXIN) is one of the best stocks Robinhood traders are buying in 2021.
8. Abeona Therapeutics Inc. (NASDAQ: ABEO)
Number of Hedge Fund Holders: 7
Abeona Therapeutics Inc. (NASDAQ: ABEO) is a Texas-based biopharma company founded in 1974. It is ranked eighth on our list of 10 penny stocks Robinhood traders are buying in 2021. The company’s shares have returned more than 31% to investors over the past month. The company concentrates on the development of therapies for the treatment of rare genetic diseases that are deemed life-threatening. A leading product that the firm is working on is a cell therapy for recessive dystrophic epidermolysis bullosa named EB-101.
In quarterly earnings results, posted on May 18, Abeona Therapeutics Inc. (NASDAQ: ABEO) reported earnings per share of -$0.17, beating market estimates by $0.02. Cash and short-term investments over the period equaled more than $86 million.
On May 26, Abeona Therapeutics Inc. (NASDAQ: ABEO) stock surged over 6% as the firm announced to shareholders in a letter that it expected to complete patient enrollment for a late stage study on EB-101 and top-line data on the program was expected by the next year.
At the end of the first quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $16.6 million in Abeona Therapeutics Inc. (NASDAQ: ABEO), down from 11 in the previous quarter worth $25.3 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Abeona Therapeutics Inc. (NASDAQ: ABEO) is one of the best stocks Robinhood traders are buying in 2021.
7. Evolving Systems, Inc. (NASDAQ: EVOL)
Number of Hedge Fund Holders: 2
Evolving Systems, Inc. (NASDAQ: EVOL) is a Colorado-based software company founded in 1985. It is placed seventh on our list of 10 penny stocks Robinhood traders are buying in 2021. The company’s shares have offered investors a return of more than 112% over the course of the past twelve months. The firm primarily provides real-time digital engagement solutions. Some of the products marketed by the firm include Smart Dealer, Dynamic Sim Allocation, and Tertio Service Activation, among others.
In earnings results for the first three months of 2021, posted on May 13, Evolving Systems, Inc. (NASDAQ: EVOL) reported a revenue of more than $6.4 million, up 3.2% compared to the revenue over the same period last year.
In the fourth quarter of 2020, Evolving Systems, Inc. (NASDAQ: EVOL) had reported a revenue of $7 million, $0.3 million more than in the preceding quarter. The earnings per share over the period were $0.05, a massive improvement from -$0.11 from the last quarter of 2019.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Evolving Systems, Inc. (NASDAQ: EVOL) with 834,531 shares worth more than $2.2 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), Evolving Systems, Inc. (NASDAQ: EVOL) is one of the best stocks Robinhood traders are buying in 2021.
6. NexGen Energy Ltd. (NYSE: NXE)
Number of Hedge Fund Holders: 13
NexGen Energy Ltd. (NYSE: NXE) is a Canada-based uranium company founded in 2011. It is ranked sixth on our list of 10 penny stocks Robinhood traders are buying in 2021. The stock has returned more than 271% to investors in the past twelve months. Although the company has interests in several uranium-related projects, the premier one is the Rook I project in Saskatchewan that consists of 32 mineral claims in the area.
On April 7, NexGen Energy Ltd. (NYSE: NXE) named Harpreet Dhaliwal, the former CFO of Leagold Mining, as the new chief financial officer. The position had not been filled since the resignation of the previous CFO back in late 2019.
On February 25, NexGen Energy Ltd. (NYSE: NXE) had announced that it had sold more than 33 million shares in a deal and that the proceeds from the deal would be used for general corporate purposes.
At the end of the first quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $40.6 million in NexGen Energy Ltd. (NYSE: NXE), the same as in the previous quarter worth $30.3 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. (NASDAQ: GOOG), NexGen Energy Ltd. (NYSE: NXE) is one of the best stocks Robinhood traders are buying in 2021.
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Disclose. None. 10 Penny Stocks Robinhood Traders are Buying in 2021 is originally published on Insider Monkey.
