In this piece, we will take a look at the fifteen most profitable penny stocks now. For more penny stocks, head on over to 5 Most Profitable Penny Stocks Now.
The stock market is made up of thousands of different stocks. In fact, estimates suggest that there are more than 2,500 stocks listed on the NASDAQ exchange and 2,300 listed on the New York Stock Exchange (NYSE). However, underneath this world of big ticket names such as Apple Inc. (NASDAQ:AAPL), there’s the murky world of penny stocks. Defined by the Securities and Exchange Commission (SEC) as shares that trade lower than $5, most of the time these companies are traded on Over the Counter markets instead of established exchanges. In fact, according to the New York Times, there are more than 10,000 small sized companies whose shares are often priced in cents and not dollars.
Due to the highly unregulated nature of the penny stock sector, it is also rife with scams as fake bubbles designed to lure retail investors with the promise of high returns only to lose their money as the scammers rapidly sell. These scams are often operated from countries that do not have extradition treaties with the United States. One such group of individuals was unearthed by the Securities and Exchange Commission (SEC) in April 2022 when the regulator revealed that it is filing charges against 16 individuals in a variety of jurisdictions such as the Bahamas and Cayman Islands for generating a whopping $194 million in illicit schemes lasting for multiple years in penny stock scams. In a classic pump and dump, once one of the individuals would amass a significant position in the penny stock, others would create false hype around it to boost the price. Then, the big stockholder would sell the shares and deprive innocent investors.
However, not all penny stocks are bad. In fact, some of the best known companies today, such as Amazon.com, Inc. (NASDAQ:AMZN) and Tesla, Inc. (NASDAQ:TSLA) once traded in penny stock territory. For a complete list, do check out 10 Most Successful Penny Stocks That Made It Big.
Today, we’ll take a look at some of the most profitable penny stocks that you’re likely to come across. Out of these, the top picks are Banco Santander, S.A. (NYSE:SAN), Nokia Oyj (NYSE:NOK), and Banco Bradesco S.A. (NYSE:BBD).
Photo by Mohamed Hadji on Unsplash
Our Methodology
Out of the countless penny stocks out there, picking out those that generate the highest profits is no easy task. To achieve our goal, we used a stock screener to sift out penny stocks with the lowest and highest price to earnings ratios, market capitalization, and positive profit margin. Then, a preliminary list of 50 firms was generated. The net income for these firms was calculated next, and the top fifteen were chosen for this list.
15 Most Profitable Penny Stocks Now
15. Telefónica, S.A. (NYSE:TEF)
Trailing Twelve Month Net Income: $288 million (1EUR = 1.07USD)
Number of Hedge Fund Holders in Q3 2022: 5
Telefónica, S.A. (NYSE:TEF) is a Spanish telecommunications service provider. The firm provides wireless and mobile telephony products, broadband internet services, smart televisions, internet of things (IoT) products, and financial services. It is headquartered in Madrid, Spain.
Telefónica, S.A. (NYSE:TEF) made a big announcement in February 2023 when it revealed that it had partnered up with Ericsson to launch mmWave 5G network at the Mobile World Congress in Barcelona. Five of the 920 hedge funds polled by Insider Monkey during Q3 2022 had bought a stake in the firm.
Telefónica, S.A. (NYSE:TEF)’s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 3 million shares that are worth $11 million.
Along with Banco Bradesco S.A. (NYSE:BBD), Banco Santander, S.A. (NYSE:SAN), Nokia Oyj (NYSE:NOK), and Telefónica, S.A. (NYSE:TEF) is a profitable penny stock.
14. Canaan Inc. (NASDAQ:CAN)
Trailing Twelve Month Net Income: $320 million (1CNY = 0.15USD)
Number of Hedge Fund Holders in Q3 2022: 9
Canaan Inc. (NASDAQ:CAN) is a Chinese hardware company that is headquartered in Beijing. The firm makes and sells products for cryptocurrency mining alongside having partnerships for data center operations.
Canaan Inc. (NASDAQ:CAN) is one of the strongest blockchain stocks where analyst sentiment is concerned. As of February 2023, four analysts have a Buy rating on the shares, and by the end of 2022’s September quarter, nine of the 920 hedge funds part of Insider Monkey’s research had invested in the firm.
Canaan Inc. (NASDAQ:CAN)’s largest hedge fund investor is Douglas Harold Hart Polunin’s Polunin Capital which owns 1.3 million shares that are worth $2.8 million.
13. Diversified Healthcare Trust (NASDAQ:DHC)
Trailing Twelve Month Net Income: $415 million
Number of Hedge Fund Holders in Q3 2022: 19
Diversified Healthcare Trust (NASDAQ:DHC) is a real estate investment trust that is headquartered in Newton, Massachusetts. The firm has a variety of properties in its portfolio, such as wellness centers and medical offices.
Diversified Healthcare Trust (NASDAQ:DHC) announced in February 2023 that it has amended a crucial credit facility worth $450 million with an annual spending limit of $400 million at a time when the real estate sector is facing the heat from macroeconomic turbulence. By the end of last year’s third quarter, 19 of the 920 hedge funds surveyed by Insider Monkey had bought a stake in the company.
12. VEON Ltd. (NASDAQ:VEON)
Trailing Twelve Month Net Income: $439 million
Number of Hedge Fund Holders in Q3 2022: 7
VEON Ltd. (NASDAQ:VEON) is a Dutch telecommunications carrier. The company lets its customers make audio and video calls, send short messages, access the Internet, and use value added services. VEON Ltd. (NASDAQ:VEON) has operations in different countries such as Bangladesh, Pakistan, and Uzbekistan, and the firm is headquartered in Amsterdam, the Netherlands.
Like other Western firms, VEON Ltd. (NASDAQ:VEON) is also taking stock of its Russian operations after last year’s brutal Ukraine invasion started. On this front, the firm announced in February 2023 that it has received regulatory approval for the sale of its Russian operations. Seven of the 920 hedge funds polled by Insider Monkey during Q3 2022 had held a stake in the company.
VEON Ltd. (NASDAQ:VEON)’s largest investor is Himanshu H. Shah’s Shah Capital Management which owns 85 million shares that are worth $41 million.
11. Ferroglobe PLC (NASDAQ:GSM)
Trailing Twelve Month Net Income: $485 million
Number of Hedge Fund Holders in Q3 2022: 24
Ferroglobe PLC (NASDAQ:GSM) is a chemicals company that is headquartered in London, United Kingdom. The firm serves the needs of a host of different industries such as semiconductor fabrication, construction, healthcare, and electronics.
Ferroglobe PLC (NASDAQ:GSM)’s share price target was reduced by investment firm B. Riley in November 2022 as it shared that the company can benefit from recent developments in the French power industry. The firm reduced Ferroglobe PLC (NASDAQ:GSM)’s share price target to $10 from $12, while its latest share price is $4.70. Insider Monkey scoured through 920 hedge fund portfolios for last year’s third quarter to find out that 24 had bought Ferroglobe PLC (NASDAQ:GSM)’s shares.
Ferroglobe PLC (NASDAQ:GSM)’s largest hedge fund shareholder in our database is Israel Englander’s Millennium Management which owns 5.4 million shares that are worth $20 million.
10. Altice USA, Inc. (NYSE:ATUS)
Trailing Twelve Month Net Income: $639 million
Number of Hedge Fund Holders in Q3 2022: 42
Altice USA, Inc. (NYSE:ATUS) is an American telecommunications firm headquartered in Long Island, New York. The firm has close to five million customers, and provides internet, mobile, and telephony services.
Altice USA, Inc. (NYSE:ATUS) has actually been the darling of hedge fund investors in the fourth quarter of 2022. Big ticket names such as AQR Capital, Marshall Wace, and Baupost Group have bought large stakes in the firm. Alongside them, 42 of the 920 hedge funds polled by Insider Monkey had invested in the firm during Q3 2022.
Altice USA, Inc. (NYSE:ATUS)’s largest investor is Jonathan Kolatch’s Redwood Capital Management which owns 15.2 million shares that are worth $70 million.
9. Grupo Aval Acciones y Valores S.A. (NYSE:AVAL)
Trailing Twelve Month Net Income: $648 million (1COP = 0.00020USD)
Number of Hedge Fund Holders in Q3 2022: 3
Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is a Colombian bank and financial services company that provides products such as accounts and loans. It is based in Bogota, Colombia.
Grupo Aval Acciones y Valores S.A. (NYSE:AVAL)’s long term currency issuance and viability ratings were reaffirmed by Fitch in December 2022 when the agency rated them at bb+ and BB+. Three of the 920 hedge funds part of Insider Monkey’s third quarter of 2022 survey had bought a stake in the company.
Grupo Aval Acciones y Valores S.A. (NYSE:AVAL)’s largest investor is Jim Simons’ Renaissance Technologies which owns one million shares that are worth $2.6 million.
8. Companhia Energética de Minas Gerais (NYSE:CIG)
Trailing Twelve Month Net Income: $706 million (1BRL = 0.00020USD)
Number of Hedge Fund Holders in Q3 2022: 15
Companhia Energética de Minas Gerais (NYSE:CIG) is a Brazilian power company with an installed capacity of close to 6,000 megawatts. The firm is based in Belo-Horizonte, Brazil.
Insider Monkey took a look at 920 hedge fund holdings for Q4 2022 to discover that 15 had invested in Companhia Energética de Minas Gerais (NYSE:CIG). Out of these, Douglas Harold Hart Polunin’s Polunin Capital is Companhia Energética de Minas Gerais (NYSE:CIG)’s largest shareholder. It owns 12.7 million shares that are worth $25.8 million.
7. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Trailing Twelve Month Net Income: $1.2 billion
Number of Hedge Fund Holders in Q3 2022: 24
Sirius XM Holdings Inc. (NASDAQ:SIRI) is an American entertainment company headquartered in New York. The firm has a satellite radio platform through which it provides a host of different services.
Deutsche Bank has a Buy rating on Sirius XM Holdings Inc. (NASDAQ:SIRI)’s shares even though it reduced the share price target to $6.25 from $7.5 in February 2023, outlining that a slowdown in the auto sector can impact the firm’s subscriptions. Insider Monkey profiled 920 hedge funds for their third quarter of 2022 investments to discover that 24 had bought Sirius XM Holdings Inc. (NASDAQ:SIRI)’s shares.
Stuart J. Zimmer’s Zimmer Partners is Sirius XM Holdings Inc. (NASDAQ:SIRI)’s largest shareholder in our database. It owns 3 million shares that are worth $18 million.
6. Southwestern Energy Company (NYSE:SWN)
Trailing Twelve Month Net Income: $1.3 billion
Number of Hedge Fund Holders in Q3 2022: 51
Southwestern Energy Company (NYSE:SWN) is an oil and gas company headquartered in Spring, Texas. The firm has more than a thousand production wells and billions of cubic feet of natural gas equivalent reserves.
Southwestern Energy Company (NYSE:SWN) is one of the many American gas companies that are facing massive losses after failing to successfully play hide and seek with gas price hedges. With prices dropping, producing gas can become cash flow negative, and during the first three quarters of 2022, Southwestern Energy Company (NYSE:SWN) posted a $6.7 billion derivative loss. 51 of the 920 hedge funds polled by Insider Monkey during Q3 2022 had bought a stake in the firm.
Southwestern Energy Company (NYSE:SWN)’s largest investor is D.E. Shaw’s D E Shaw which owns 19.3 million shares that are worth $113 million.
Banco Santander, S.A. (NYSE:SAN), Southwestern Energy Company (NYSE:SWN), Nokia Oyj (NYSE:NOK), and Banco Bradesco S.A. (NYSE:BBD) are some highly profitable penny stocks.
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Disclosure: None. 15 Most Profitable Penny Stocks Now is originally published on Insider Monkey.