Navigating Opportunities in Penny Stocks: A 2024 Guide by Nemo
Welcome to the thrilling world of penny stocks! If you're new to investing or simply seeking to understand more about high risk vs reward opportunities, you've come to the right place. In this guide, we'll explore penny stocks in 2024, making sure all the info is accessible even if you're a novice. Let's dive into some of the opportunities of these higher risk investments, and some investment strategies.
What Are Penny Stocks? 🤔
Penny stocks are shares of companies with a relatively small market cap that trade for less than $10 per share. While they come with higher risk, their low prices mean they might offer substantial returns if you pick the right stocks at the right time.
Why Penny Stocks in 2024? ⏰
Economic Recovery and Market Trends
Many countries’ economies are recovering well post-pandemic.
One example is the U.S. economy which has been on a recovery path in the last few years, with various sectors showing strong signs of growth. U.S. GDP grew by an estimated 2.8% during the second quarter of 2024, showing that the economy has continued, overall, to bounce back. This creates a fertile ground for small-cap companies to expand and thrive, potentially leading to increased stock values.
Countries in the Middle East and North Africa (MENA) region are also predicted to see economic growth in 2024. Economists from the World Bank have forecast an average rate of growth of 2.7% in 2024 in these countries, compared to 1.9% last year.
Innovation and Emerging Industries
2024/2025 is set to be a year of technological advancements and emerging industries. Sectors like renewable energy, biotechnology, and fintech are booming, offering numerous penny stocks with high growth potential. Companies at the forefront of these industries, even if small now, could become major players in the future.
Increased Retail Investor Participation
The rise of trading apps and online platforms like Nemo has made it easier than ever for individual investors to participate in the stock market. This democratisation of trading means more opportunities in the penny stock market, and potentially higher liquidity and trading volumes.
Hot Sectors to Watch 🔥
Renewable Energy
With the global push towards sustainable energy, companies involved in solar, wind, and other renewable energy technologies are expected to see significant growth. Look for penny stocks in this sector that are innovating and expanding their market reach.
Biotechnology
Biotech firms are continuously developing new treatments and technologies. Advances in areas like gene editing, cancer research, and personalised medicine could lead to substantial gains for penny stocks in this sector.
Fintech
Financial technology is transforming how we handle money. From digital wallets to blockchain technology, fintech companies are disrupting traditional financial services. Penny stocks in this sector could benefit greatly from the ongoing digital transformation.
Strategies for Investing in Penny Stocks 💡
Research is Key
Research is crucial when investing in penny stocks. Look into the company's financial health, business model, market potential, and management team. Reliable financial news websites, company reports, and industry analyses are good places to start. This can sometimes be difficult when investing in smaller, younger companies, but any information you can find should help you decide whether you want to invest.
Beginning your penny stocks research is easy with Nemo - on our app, you can use the ‘Penny Stocks’ neme to find a handpicked selection of stocks that fit this description. You can also filter your stocks search to create a list of all the companies with a smaller market cap that you can invest in on Nemo. We currently have over 2000 companies classed as having a ‘micro’ market cap, worth US$250 million or less.
Diversification
Spread your investment across multiple stocks to reduce risk. This way, if one stock underperforms, your overall portfolio isn't significantly impacted.
Set Realistic Expectations
Penny stocks can offer high returns, but they also come with high risk. Set realistic goals and be prepared for volatility. It's important to have an exit strategy in place to protect your investment.
Stay Informed
Market conditions can change rapidly, especially in the penny stock arena. Stay updated with the latest news and trends in the sectors you're invested in. This will help you make informed decisions and adjust your strategy as needed.
Potential Penny Stocks to Consider in 2024 🔍
Ascent Solar Technologies Inc (ASTI)
Ascent Solar Technologies makes thin, flexible solar cells that capture light to turn it into energy. It’s focused on integrating its products into high-value markets, such as aerospace, satellites, and near-earth-orbiting vehicles. One warning about this one: the company is currently considered to be in ‘Below Average’ financial health. Stock is currently priced $0.08, having fallen 89.08% over the last 6 months.
SPI Energy Co Ltd (SPI)
This U.S. based renewable energy company has an electric vehicle division, producing chargers as well as developing vehicles. The stock is currently priced at $0.31 - it has fallen 46.58% in the past 6 months. The stock is currently rated on ‘Nemo’ as a ‘Hold’, but could be one to watch in case analysts’ recommendations change.
Acasti Pharma Inc (ACST)
A Canadian biopharma company developing drugs that address rare conditions. Their current main drug candidate in development is an injectable treatment for a rare type of brain aneurysm, aneurysmal subarachnoid haemorrhage (aSAH). The chart below shows the movement of this stock on Nemo over the past 6 months - having recently fallen, it could rise again. It’s currently valued at $2.52.
iBio, Inc (IBIO)
This biotech company leverages artificial intelligence (AI) for the development of precision antibodies, which could be used to treat hard-to-target cancers, as well as other conditions. This stock has risen 70% in the past 6 months - will it continue to rise? It’s currently valued at $1.87. Analysts have observed that 2 hedge funds have stock in iBio, suggesting that they think it could continue to increase in value.
Mogo Inc. (MOGO)
A fintech company providing digital financial services, including loans and credit score monitoring. As fintech continues to rise, Mogo's innovative solutions could drive its stock upwards. Shares in Mogo are currently priced at $1.27 - the price has dropped by 20.63% in the past 6 months.
Grab Holdings inc (GRAB)
Lastly, Grab Holdings is another fintech company. This Singapore based company offers various services ranging from food delivery to online payment services, and has been compared by analysts from InvestorPlace to global success Uber, but if Uber also had some fintech functionality. It’s currently priced at $3.17 and over the past 6 months, the price has dropped by 4.08%. As the screenshot below shows, the price has fluctuated closer to $4 at times before falling again.
Conclusion: Seize the Penny Stock Opportunity in 2024
Investing in penny stocks requires a blend of research, strategy, and a bit of daring. The opportunities in 2024 are vast, with emerging industries and economic recovery paving the way for significant growth. By staying informed and making strategic choices, you can potentially turn these low-priced stocks into substantial gains.
Happy investing with Nemo!
All stock information is correct at the time of writing.
