5 Best High Risk Penny Stocks to Buy Now

1. The RealReal, Inc. (NASDAQ:REAL)

Number of Hedge Fund Holders: 24

Resale luxury goods marketplace The RealReal, Inc. (NASDAQ:REAL) Inc is one of the best high risk penny stocks to buy now according to hedge funds. The RealReal, Inc. (NASDAQ:REAL)’s management talked about the state of business during RealReal’s latest earnings call and said the following in an answer to a question:

“So we have seen ongoing and continuous improvement in our gross margins primarily due to the change in the mix of our business where we have focused more on the very profitable consigned business and we have deemphasized the direct business. And as you’ve seen from our results, the consigned business generally is about an 85% margin business. And traditionally, the direct business has been more like a 15% business which looks in the first half of the year has been more flat as we’ve been trying to move the inventory sort of less favorably and we’ve had the discount. So what you’ve seen is this change in mix and a significant improvement over 900 basis points again this quarter.

So for the first half of the year, we ended up at about 65% gross margin. We expect that to continue to improve in the second half of the year. I’ve said in the past that the gross margin could reach high 60s, even potentially scare a 7 handle but we haven’t committed to that. But that’s the trend you should expect is continued improvement and get into the very high 60s and that would be sustainable once we get to that rate because we continue to follow this strategy of really focusing on the high-margin consigned business.”

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