As a new year approaches, now may be the time to pounce on the best penny stocks to buy and hold throughout 2024. It’s safe to say that “penny stock territory,” is well-populated.
According to Finviz, there are nearly 1900 stocks listed on major U.S. exchanges that trade for $5 per share or less, thousands more trade in the over-the-counter market.
However, among the scores and scores of penny stocks out there, the vast majority of them are too risky/speculative to make them investment-worthy.
Out of the shortlist of investable penny stocks, just a fraction of them stand out as stocks with a strong chance of performing well over the next twelve months, thanks to near-term catalysts.
While the pool of high-potential penny stocks may not number in the thousands, or even hundreds, you still have plenty of great choices.
That’s the story here, with these seven best penny stocks. A mix of growth and value plays, each one could really “crush it” in terms of performance during 2024.
Brandywine Realty Trust (BDN)
At first glance, office-focused real estate investment trust (or REIT) Brandywine Realty Trust (NYSE:BDN) may not seem like a top penny stock right now. The commercial real estate (or CRE) market is still well in “crisis mode.” Economic experts like Gary Shilling argue that the worst has yet to come.
But with BDN stock, this high level of risk and uncertainty may already be well priced-in. Brandywine trades at a price-to-funds-from-operations of just 4.1. This is toward the low end of current office REIT valuations. BDN also trades at a more than 40% discount to its book value.
With all this doom-and-gloom baked-in already, it may take just a small amount of bullish news for the CRE space to send shares sharply back in the right direction.
Exro Technologies (EXROF)
My bullishness for Exro Technologies (OTCMKTS:EXROF) over the past few months has yet to translate into higher prices for shares in this Canada-based developer of components for electric vehicles and battery storage systems.
Yet while shares have, instead of tripling in price, slid considerably as of late, don’t assume that 2024 will be another disappointing year for EXROF stock investors.
Yes, despite the company recently entering the commercialization stage, revenue currently generated still falls far short of Exro’s operating expenses. High quarterly losses point to future dilutive capital raises.
But while commercialization is progressing slowly, it hasn’t slowed down. For instance, the company just recently received its first pilot order for its battery storage system.
Across its three product lines, the total addressable market is in the hundreds of billions. Further progress with commercializing its technology during 2024 may be sufficient to shift sentiment for EXROF back to bullish.
Overseas Shipholding Group (OSG)
Overseas Shipholding Group (NYSE:OSG) is another name that I’ve previously said is one of the top penny stocks to buy ahead of the new year.
Back in October, I argued that OSG, a U.S.-based owner of oil tankers, was benefiting from a favorable environment for the industry.
Continued high earnings could enable the company to keep on buying back shares, giving OSG stock an additional boost.
However, a recent geopolitical event in the Middle East may just well bolster the bull case. While not for certain, this recent attack could be a prelude to further escalating tensions/conflict that may impact a key maritime trade route.
This may help counter negative developments for the tanker industry, like OPEC+ production cuts. With this in mind, now may be the time to consider scooping up OSG, before the stock breaks through the penny stock ceiling ($5 per share).
Pitney Bowes (PBI)
As I’ve pointed out previously, Pitney Bowes (NYSE:PBI) is one of the best penny stocks, but the biggest catalyst for shares in this leading mailing/shipping products provider is going to take many years to play out.
Efforts by Pitney Bowes’ activist-led board to turnaround the company (through divestitures and growth investments) likely will not translate into a rapid move for PBI stock to levels near said activist’s estimate of the company’s true value (between $11.34 and $16.33 per share).
Still, the impact of some of these initial changes, plus the fact that PBI maintained its dividend, could keep the stock, which has rallied since October, on an upward trajectory throughout 2024. While a move to double-digit prices may be out of reach for now, a move out of penny stock territory, towards mid-to-high single digits, could be within reach.
Pagaya Technologies (PGY)
Although still up by more than 33.6% year-to-date, Pagaya Technologies (NASDAQ:PGY) has plunged in price since the summer. Fairfeather fans of this fintech have climbed back on the fence. Recent news of now-former Pagaya CFO Michael Kurlander’s abrupt resignation has not helped the situation.
Yet the market is back to a “show me” stance on PGY stock, betting on this provider of AI-powered loan origination software could prove to be a very profitable move in 2024. As seen in other recent news, Pagaya is not only still being successful at scaling up its operations.
Success with securitising loans made through its platform continues as well. With the top end of sell-side forecasts calling for PGY to hit profitability next year, there may be enough in the way of operational improvement to propel this stock back up to its 52-week high ($2.83 per share).
Rush Street Interactive (RSI)
Rush Street Interactive (NYSE:RSI) may be one of the best penny stocks, for investors who missed out on DraftKings’ (NASDAQ:DKNG) stunning rebound during 2023. Rush Street’s BetRivers online sports book and casino platform is a smaller competitor to DraftKings in the U.S. online gambling market.
RSI stock is up just over 20% year-to-date, versus a nearly 253% gain for DKNG during this same time frame. Don’t get me wrong. I’m not saying that RSI could more than triple in price next year. However, the company continues to report double-digit revenue growth. Customer acquisition costs are coming down, and revenue per existing user is rising as well.
All of this points to further narrowing of net losses, and a possible swing to GAAP profitability in the next year or two. This could help drive outsized gains for RSI shares during 2024.
Yatra Online (YTRA)
After looking at several growth-focused penny stock names to buy, let’s look at Yatra Online (NASDAQ:YTRA), which, while a tech/growth stock, is more of a deep value type of opportunity.
This U.S.-listed entity owns a 65% stake in India-based travel marketplace Yatra Online Limited, which in September went public on the Bombay Stock Exchange.
In U.S. dollars Yatra Online Limited’s valuation is worth around $161.5 million. Add in the $57.7 million in cash on hand held by the U.S.-listed parent, and it’s clear that the underlying value of YTRA stock is more than double its current trading price.
As an investment manager recently tweeted, the company is working on a plan to make the YTRA’s U.S. exchangeable for the Indian-listed shares. This may attract arbitrageurs, and help to bridge this very high valuation gap.
On the date of publication, Thomas Niel 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.