There are a lot of variables to consider when looking at penny stocks. Many traders believe that finding the most successful penny stocks is about weeding the bad ones and focusing on the good.
We will look at some of the most successful penny stocks and see what makes them so successful. By understanding what these stocks have in common, you may be able to apply their strategies to your trading portfolio.
What penny stocks are and how they work
Penny stocks are shares that trade for less than $5 per share and are usually found on over-the-counter (OTC) exchanges or pink sheet companies. While penny stocks may seem like a great way to get rich quickly, they are also very risky. Many of these companies are new and small, with little financial history, making them more volatile and subject to price manipulation.
Penny stocks are bought and sold the same way as any other stock, and you can buy them through a brokerage firm or online trading platform. When you purchase penny stocks, you become a shareholder in the company and have a claim on its assets and profits. However, there are some critical differences between penny stocks and blue-chip stocks. For example, penny stocks generally have a lower market capitalisation and are less liquid, which means they are more volatile and may be more challenging to sell.
The Most Successful Penny Stocks of 2024
With a deeper understanding of penny stocks, let’s explore some of the most successful ones for 2024.
Crox Inc. (CROX)
Crox Inc. is a footwear company that designs, manufactures, and markets shoes and related apparel worldwide. Founded in 1992 and headquartered in Santa Barbara, California, Crox Inc. went public in 2003. The company’s stock has experienced significant growth recently, doubling in value over the past year. In March, Crox Inc. reported impressive fiscal fourth-quarter results, with revenue and earnings surpassing analysts’ expectations.
Plug Power Inc. (PLUG)
Plug Power Inc. is a fuel cell company that designs, develops, manufactures, and markets hydrogen fuel cells for forklifts, automobiles, and other industrial applications. Founded in 1997 and headquartered in Latham, New York, Plug Power Inc. has been one of the hottest penny stocks over the past year, more than quadrupling in value. The company has gained from the growing interest in fuel cells as a clean energy alternative to fossil fuels.
Carbonite Inc. (CARB)
Carbonite Inc. is a cloud-based data backup and recovery company. Established in 2005 and headquartered in Boston, Massachusetts, Carbonite Inc. went public in 2011 and has been one of the best-performing IPO stocks over the past decade. The company has thrived due to the expansion of cloud-based data storage and the increasing demand for data protection among businesses.
Omnicell Inc. (OMCL)
Omnicell Inc. is a healthcare technology company that designs, manufactures, and markets products and services for hospitals and other healthcare facilities. Founded in 1992 and headquartered in Mountain View, California, Omnicell Inc. has shown strong performance in recent years, doubling in value over the past five years. The company’s products are widely used in healthcare applications such as medication management, infection control, and patient safety.
Why penny stocks can be an excellent investment
Despite the risks, there are some excellent reasons to invest in penny stocks.
They offer the potential for high returns
Penny stocks offer the potential for high returns, but they are also very risky. If you’re willing to take on the risk, you could see huge profits. For example, if a company trading at $0.50 per share doubles in price, you’ve made a 100% return on your investment.
They can be very volatile
Penny stocks are often more volatile than blue-chip stocks, which means they can go up and down in price quickly. It can be great to buy when the stock is low and sell when it’s high. However, it can also be hazardous if you’re not able to time the market correctly.
They can be easily traded
Penny stocks are generally easier to trade than blue-chip stocks, and this is because they have a lower market capitalisation and are less liquid. It means they can be bought and sold more quickly, which can be helpful if you need to get in or out of a position quickly.
You don’t need much money to get started
Another advantage of penny stocks is that you don’t need much money to start. Since they trade for less than $5 per share, you can buy a large number of shares with a small amount of capital, making them a great way to start investing with little money.
