Do you have any penny stocks in your portfolio? If you don’t, you might want to consider it with any speculative money sitting on the sidelines. Penny stocks are usually those of small-cap, or even micro-cap companies with little revenue and are frequently not profitable.
That’s enough to steer away many investors. But a little research can help you sort out the companies with little hope of growth versus those that may be a diamond in the rough. Remember, companies such as Amazon (NASDAQ:AMZN) were once penny stocks. Someone believed in them. And since many penny stocks are ignored by institutional investors until they start generating profit, those people were likely retail investors like you.
This article focuses on three penny stocks that may look down and out right now but do business in areas of the economy forecasting strong growth over the next decade. That means taking a small position today could have you sitting on a sizable gain by the time Wall Street starts to pile in.
Microvast (MVST)
If you’re a penny stock investor, you’re familiar with the phrase “hurry up and wait.” That’s the phrase surrounding Microvast (NASDAQ:MVST). The company is a leader in the development of lithium-ion battery solutions for energy storage, transportation and heavy equipment.
Microvast went public as part of a special purpose acquisition company (SPAC) merger. That put some meme stock shine on MVST stock, which shot as high as $25.20 in February 2021.
It’s been downhill since then. MVST stock has been a poor performer over the last 12 months. It’s down 69% in that time and 67% in 2024. That correlates with the performance of many electric vehicle (EV) companies in that time.
The company is not profitable yet but is guiding to be profitable in 2024. And revenue is increasing at an impressive pace. The stock doesn’t get much analyst attention, but the four analysts that have issued a rating give MVST a consensus price target of $4.50, an 857% gain from its closing price on June 12, 2024.
Gossamer Bio (GOSS)
If you’re looking for penny stocks that could be showstoppers on Wall Street, the biotech space is a good place to look. Many of these companies do not have commercially available products. That means not only are they not profitable, but they don’t have any revenue coming in. That’s the case with Gossamer Bio (NASDAQ:GOSS).
But all it takes is one. And that’s also the number of candidates in Gossamer Bio’s pipeline. The company has a candidate, Seralutinib (GB002), in a Phase 3 clinical trial for treating Pulmonary Arterial Hypertension (PAH). The disease affects approximately 15 to 50 individuals per million in the United States and Europe. About 500 to 1000 new cases are diagnosed in the U.S. annually.
Results from the Phase 3 trial aren’t due until the end of 2025. Fortunately, the company appears to be funded into 2027. GOSS stock is down 43% in 2024, but the consensus 12-month price target of 5 analysts is $7.65, a 1,371% potential gain for risk-tolerant investors.
Vista Gold (VGZ)
Another area to look for penny stocks with the potential for a show-stopping upside in 2024 is precious metals. You could buy gold bars at Costco (NASDAQ:COST) or look at stocks like Vista Gold (NYSE:VGZ). Vista isn’t a gold miner but a development company that helps acquire, explore, evaluate and advance gold exploration and development projects in Australia.
It’s a risky business, but gold looks like a good bet right now. With global government spending still at record levels, the percentage of budgets that go to service that debt is becoming unsustainable. That means inflation will have to run hot. That’s good news for gold, which is at record highs and likely to move higher.
The company has no revenue, but it also operates with no debt. There’s a substantial risk, but if you’re looking for penny stocks with the possibility of life-changing returns, VGZ stock could be one to watch.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Chris Markoch did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.