Markets

Insider Trading

Hedge Funds

Retirement

Opinion

13 Penny Stocks that Captured the Attention of Billionaires

In this article, we will take a detailed look at the 13 Penny Stocks that Captured the Attention of Billionaires. For a quick overview of such stocks, read our article 5 Penny Stocks that Captured the Attention of Billionaires.

Investors are jubilant after the Fed’s clear signal that it would begin cutting interest rates in 2024. Markets have remained under pressure due to uncertainty caused by higher interest rates. While many believe we are still not out of the woods, the Fed’s acknowledgement that its efforts against inflation are working and its readiness to take a dovish stance is enough to soothe investors’ nerves in the short term.

But will stocks keep rebounding in 2024? Will socks rise after the Fed actually starts to cut interest rates? An interesting report from LPL Research takes a look at the behavior of equities during interest rate cuts. The report said that while assessing or predicting stock movements driven by interest rate cuts, it’s extremely important to pay attention to where we actually are in the business cycle. For example, the report said that when the Fed began to cut rates after series of hikes in January 2001 and September 2007, the economy entered recessions. However, rate cuts of 1984, 1987, 1989, 1995, and 1998 saw the S&P 500 significantly rise over the next six to 12 months.

A report by Meeder Investment Management takes an interesting look at the effect of rate cuts on stocks and whether it makes sense to be overly bullish on stocks on expectations of rate cuts next year.

“One common perception among investors is that the stock market will perform well once the Fed starts cutting interest rates. History tells us this is not necessarily always the case. In fact, over the past nine initial interest rate cuts, more than half of the Fed’s first cuts were followed by declines in the S&P 500 Index ranging from -22.6% to -55.5%. The Technology bubble in the early 2000s and the Great Financial Crisis proved to be the worst scenarios, with the Fed cutting interest rates at two different times during the secular bear market of 2000–2009. On the other hand, four of the nine occurrences were followed by minimal weakness and achieved strong 6-month returns. On balance, over the past nine initial interest rate cuts, the S&P 500 Index had an average decline of -20.5% and an average 6-month return of 3.4%. So while the market has experienced both bull markets and bear markets following the first rate cut, history does not indicate that the Fed’s accommodative policy will simply carry the market higher. Valuations matter too. When the market had a decline of at least -20% after the Fed’s first cut, the average S&P 500 trailing PE ratio was 18. On the other hand, when the S&P 500 had a decline of less than -10%, the average PE ratio was 11.4. The current P/E ratio of 22 could be another reason to be more cautious once the Fed makes its first cut.”

Risky stocks were ruthlessly shunned by investors when the inflation storm forced the Fed to take a hawkish stance. The market was more gravitated towards safe stocks like Coca-Cola Co (NYSE:KO), Bank of America Corp (NYSE:BAC) and Kroger Co (NYSE:KR). But as investors begin to look towards the era of rate cuts and monetary ease, small companies might see a rebound in investor interest in the coming weeks and months. In this environment, it makes sense to see which penny stocks are bought by smart money investors.

Photo by Kaleidico on Unsplash

Methodology

For this article we scanned Insider Monkey’s database of billionaire-owed stocks and picked 13 penny stocks (trading under $5) with the highest number of billionaire investors. These penny stocks are popular among smart money investors and thus deserve investor attention.

13. Banco Bradesco SA (NYSE:BBD)

Number of Billionaire Investors: 9

Brazilian financial services company Banco Bradesco SA (NYSE:BBD) ranks 13th in our list of the best penny stocks to buy now according to billionaire investors.

A total of 9 billionaires tracked by Insider Monkey had stakes in Banco Bradesco SA (NYSE:BBD) as of the end of September this year. Some notable shareholders of Banco Bradesco SA (NYSE:BBD) included hedge funds of Ken Fisher, Howard S. Marks, Israel Englander and Ken Griffin.

12. Medical Properties Trust Inc (NYSE:MPW)

Number of Billionaire Investors: 9

Medical Properties Trust Inc (NYSE:MPW) is a REIT focused on healthcare facilities. The stock is down by over 50% year to date through December 12. The stock has a dividend yield of over 12%. In November, Stifel downgraded the stock to Hold from Buy amid concerns that Medical Properties Trust Inc’s (NYSE:MPW) problems would increase in a high interest rate environment.

“The higher for longer interest rate environment and the overall difficulty in getting credit is increasing the likelihood of additional tenant credit issues,” Stifel analyst Stephen Manaker wrote in a note.

As of the end of the third quarter of 2023, some notable billionaires having stakes in Medical Properties Trust Inc (NYSE:MPW) are Philippe Laffont, Israel Englander and Cliff Asness. Unlike Coca-Cola Co (NYSE:KO), Bank of America Corp (NYSE:BAC) and Kroger Co (NYSE:KR), Medical Properties is a small company with some risks involved.

Miller Value Income Strategy made the following comment about Medical Properties Trust, Inc. (NYSE:MPW) in its Q3 2023 investor letter:

“Medical Properties Trust, Inc. (NYSE:MPW) was the top detractor during the quarter. The health care real estate investment trust (REIT) reported 2Q23 revenue of $337.4MM, -15.7% Y/Y, below consensus of $351.3M, and Normalized Funds from Operations (FFO) per share of $0.48, +4.3% Y/Y, ahead of consensus of $0.38. The company ended the quarter with total debt of $10.3B and an Adjusted Net Debt to Adjusted Annualized Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (EBITDAre) ratio of 6.8x, compared to 6.3x at the end of 2Q22. The company announced an updated capital allocation strategy going forward, which includes: i) a ~48% quarterly dividend cut to $0.15/share (11.0% annualized yield), ii) the pursuit of refinancing, asset sales, and joint[1]venture opportunities that bolster liquidity and enable the repayment of debt, and iii) a reduction in discretionary operating expenses and other costs for better alignment with the expected decrease in the company’s asset base and near-term acquisition activities. Management also continues to target a long-term Net Debt to Adjusted EBITDAre leverage ratio of 5-6x. Management revised FY23 guidance for normalized FFO/share of $1.55 (vs. prior guidance of $1.58), or a P/FFO of 3.5x.”

11. Opendoor Technologies Inc (NASDAQ:OPEN)

Number of Billionaire Investors: 9

Online real estate platform company Opendoor Technologies Inc (NASDAQ:OPEN) ranks 11th in our list of the penny stocks that captured the attention of billionaires this year. As of the end of the third quarter of 2023, 9 billionaire-led hedge funds reported having stakes in Opendoor Technologies Inc (NASDAQ:OPEN). The biggest stakeholder of Opendoor Technologies Inc (NASDAQ:OPEN) was Daniel Patrick Gibson’s Sylebra Capital Management which owns a $69 million stake in Opendoor Technologies Inc (NASDAQ:OPEN).

Opendoor Technologies Inc (NASDAQ:OPEN) is one of the best-performing stocks in 2023, having gained about 226% year to date.

10. Dish Network Corp (NASDAQ:DISH)

Number of Billionaire Investors: 10

Dish Network Corp (NASDAQ:DISH) fell in November after weak Q3 results and its CEO’s departure. Dish Network Corp (NASDAQ:DISH) recently said it appointed Hamid Akhavan as president and CEO in addition to his current role as CEO and president of EchoStar.

9. Lufax Holding Ltd – ADR (NYSE:LU)

Number of Billionaire Investors: 10

Chinese personal finance services company Lufax Holding Ltd – ADR (NYSE:LU) was in 10 billionaire-led hedge fund portfolios as of the end of the third quarter of 2023.

8. Compass Inc (NYSE:COMP)

Number of Billionaire Investors: 10

Residential real estate brokerage company Compass Inc (NYSE:COMP) ranks 8th in our list of the penny stocks that remained on billionaires’ radar this year. A total of 10 billionaires tracked by Insider Monkey had stakes in Compass Inc (NYSE:COMP).

The company during Q3 earnings call talked about how it’s using AI to optimize its business:

Recently, we’ve further enhanced that offering by integrating the ChatGPT API into Compass AI, which has already proved to be a game changer for our agents. For those of you who have used AI, you know this technology has seemingly unlimited potential. But it is only as good as the data and you want to context from which it draws.

Compass As is custom built to support real estate agents and over time will be supercharged by a vast amount of proprietary Compass data drawn from our hundreds of thousands of transactions, which is a major competitive advantages over other brokerages. Right now, Compass AI is already augmented with smart, real estate-specific system prompts, as well as contacts taking directly from her proprietary platform data set. And in the future, Compass AI is poised to become a personalized solution trained to a proprietary data and customizable by our agent users. This is a significant advantage for Compass agents compared to agents at other brokerages who typically use general purpose solutions or otherwise search public databases for best practices.

Read the entire earnings call transcript here.

7. Altice USA Inc (NYSE:ATUS)

Number of Billionaire Investors: 10

Altice USA Inc (NYSE:ATUS) got hammered this year, losing about 50%. The stock was spotted in 10 billionaire-led hedge fund portfolios. Cliff Asness and Israel Englander were notable billionaires with stakes in Altice USA Inc (NYSE:ATUS) as of the end of the third quarter of 2023. However, the biggest stakeholder of Altice USA Inc (NYSE:ATUS) was Jonathan Kolatch’s Redwood Capital Management which had a $52 million stake in Altice USA Inc (NYSE:ATUS).

6. Petco Health and Wellness Company Inc (NASDAQ:WOOF)

Number of Billionaire Investors: 10

Petco Health and Wellness Company Inc (NASDAQ:WOOF) sells pet food and services. The stock ranks 6th in our list of the penny stocks that captured the attention of billionaires. Recently, Goldman Sachs in its Equity Research report issued a list of out of favor stocks it believes could rebound early next year. Petco Health and Wellness Company Inc (NASDAQ:WOOF) was one of these stocks.

As of the end of the September quarter of 2023, 10 billionaire-led hedge funds reported owning stakes in Petco Health and Wellness Company Inc (NASDAQ:WOOF). Unlike Coca-Cola Co (NYSE:KO), Bank of America Corp (NYSE:BAC) and Kroger Co (NYSE:KR), Petco is a risky stock with growth catalysts.

Click to continue reading and see 5 Penny Stocks that Captured the Attention of Billionaires.

Suggested Articles:

Disclosure. None. 13 Penny Stocks that Captured the Attention of Billionaires was initially published on Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 70%.

For a ridiculously low price of just $29, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

 

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $29.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!


No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a year later!

China’s terrifying internet “Master Key”… and the one microcap that could stop them

In August 2024, news outlets around the world revealed one of the most shocking data breaches in recent history.

Approximately 2.9 billion records, including names, email addresses, phone numbers, mailing addresses, financial data and, distressingly, Social Security numbers, were stolen when Coral Springs, Florida, firm National Public Data (NPD) suffered a massive cyberattack. The company confirmed that the breach, which happened in December 2023, resulted in the potential leaks of data in the summer of 2024.

Nearly every day in the news, we hear about yet another damaging data breach or ransomware attack that puts valuable data — including yours — into the hands of hackers. And the number of attacks is soaring — up 30% year over year according to the latest numbers.

As bad as this is, it’s a day at the beach compared to what’s coming.

That’s because hostile nations across the globe — including Iran, North Korea, Russia and Communist China are going all-out to develop a breakthrough technology that will unlock what I call the “Master Key” to the Internet.

If they succeed in harnessing this groundbreaking “Master Key” technology, the consequences could be catastrophic.

Click to continue reading…