As we settle into August, several Reddit penny stocks are generating fresh interest. But many investors are on edge. After all, a majority of people taking their cues from platforms like Reddit are new investors. Going with your gut is an interesting strategy to take. Still, you have to admit that it has paid to follow Reddit stocks.
Several picks emanating from this space have returned triple-digit gains. Now, even institutional investors are keeping an eye on social media when laying out their strategies. Under the circumstances, it just wouldn’t be prudent to ignore the companies generating chatter on such platforms.
As such, the following list contains seven companies that are being actively discussed on sites like Reddit. Moreover, they possess interesting operating models and are currently trading at a discount. These names could be your next bargain buys.
- Grom Social Enterprises (NASDAQ:GROM)
- China Xiangtai Food (NASDAQ:PLIN)
- Iamgold (NYSE:IAG)
- Cinedigm (NASDAQ:CIDM)
- Verb Technology (NASDAQ:VERB)
- Sundial Growers (NASDAQ:SNDL)
- Dynatronics (NASDAQ:DYNT)
Reddit Penny Stocks to Buy: Grom Social Enterprises (GROM)
First up on this list of Reddit penny stocks is GROM. Grom Social Enterprises is a social media platform and original content provider for children under 13 years. Basically, this youth-oriented platform gives children a safe space to enter and explore the world of online media. Grom Social has signed up more than “25 million kids and parents across all of its platforms” since 2015.
According to Entrepreneur, Founder Zach Marks came up with the idea for this company after his own experiences with social media as a kid, when he was forced to delete his Facebook (NASDAQ:FB) account because he was too young. After the incident, Marks started thinking about a platform designed entirely for kids. As a result, Grom now offers a curated selection of kid-friendly shows, a messaging service and photo and video editing. Grom also monitors chats to maintain “Internet etiquette” and reduce cyberbullying. Parents and guardians can also monitor activity.
All in all, this company operates through various units and has acquired studios like Top Draw Animation and Curiosity Ink Media. These segments each provide something unique to the overall user experience.
Lastly, Grom also recently signed a deal with Toon2Tango to develop an animated series as well as other content. This will help increase its popularity and diversify the platform’s offerings. Today, GROM stock trades for around $2.75.
China Xiangtai Food (PLIN)
To me, it seems odd that China Xiangtai Food has sunk about 19% in the past month. When it comes down to it, PLIN stock is one of the better Reddit penny stocks out there.
Essentially, China Xiangtai sells various processed meat products and is quite popular in its home country. Considering the population of China and a middle class that continues to thrive and grow, PLIN should be on everyone’s radar.
Of course, beef, chicken, duck and other meats may not be as exciting as artificial intelligence (AI) or big data analytics. Still, PLIN stock managed to grow sales by 11.6% in 2020. Plus, with the acquisition of Chongqing Ji Mao Cang Feed, the company has also moved into the raw livestock feed market.
All in all, this stock is essentially a Chinese recovery play. The country was able to cope better than others when it came to tackling Covid-19. As a result, concerns regarding the consumer discretionary sector in the U.S. do not apply to PLIN’s market. And even during the pandemic, the meat-processing company still managed to increase its top line quite handsomely.
For 2020, total revenues finished at $110.6 million, an increase from $99.1 million in fiscal-year 2019. However, net loss was $4.9 million, compared to net income of $4.4 million in the year-ago period. That sharp fall in profitability was chiefly due to decreased farmers’ market sales and the increased inventory costs.
With things getting back to normal, though, any supply chain-related costs should decrease. So, PLIN should see a return to profitability in the near future.
Reddit Penny Stocks to Buy: Iamgold (IAG)
Next up on this list of Reddit penny stocks, Iamgold is a “mid-tier” Canadian mining company with three gold mines in North and South America as well as West Africa. Understandably, due to falling gold prices, the stock underperformed the S&P 500 by more than 80% in the past year. But don’t let that turn you away from IAG stock.
Right now, gold prices are increasing once again. As a result, Iamgold is seeing some traction. However, patience is the key with this one. IAG recently announced that its attributable production of 139 koz of gold in the second quarter was lower compared to the year-ago period, mainly due to lower production from the Westwood and Rosebel mines. Additionally, that production has been partly compensated by its higher rates from the Essakane mine.
Because of this, the gold producer reduced its production guidance and raised its per-ounce costs guidance for 2021. Still, if Iamgold can overcome these production issues, the company could stand to gain from a recovery in the price of gold.
With millions of people stuck at home with nothing to do, entertainment companies flourished during the pandemic. That holds true for this next pick of the Reddit penny stocks: CIDM stock.
Cinedigm provides content across several platforms, “including theatrical, digital, cable and satellite VOD, broadcast television, streaming and physical.” The company also recently reported Q4 fiscal 2021 results and hit it out of the park.
For the quarter, Streaming/Digital revenues made up 75% of total revenues compared to 48% in the prior-year period. Additionally, Combined Streaming/Digital revenues increased 66% year-over-year (YOY). Total debt also fell by $37.3 million (or 76%), from $49.1 million to $11.9 million.
But that’s not all. Subscribers to Cinedigm’s video-streaming services grew as well, topping an estimated 683,000 subscribers in June, up 414% over the year-ago period. Plus, total streaming minutes in June reached around 504.1 million, marking the first month that the company surpassed the half-billion minutes-streamed milestone.
Lastly, the company has made a noteworthy announcement as well. That is, three of Cinedigm’s most popular channels are now available on Sling TV. The company’s launch includes its family-oriented Dove Channel, pop culture-focused CONtv and finally its documentary offering called Docurama.
Reddit Penny Stocks to Buy: Verb Technology (VERB)
Verb Technology is a Software-as-a-Service (SaaS) applications platform developer that offers interactive, video-based customer relationship management (CRM) sales and marketing applications. Like other Reddit penny stocks, this company has also generated a lot of positive buzz over the past few weeks.
In particular, this past July has been very kind to VERB stock. For starters, Ascendiant Capital analyst Edward Woo initiated coverage on the company’s shares with a “buy” rating. The company also commercially released “verbMAIL,” a product offering that was developed in collaboration with Microsoft’s (NASDAQ:MSFT) Global Partner Solutions’ U.S. Technical Team. Basically, the collaboration integrated Verb’s interactive video capabilities into Outlook.
And that’s not all. On top of this news, Verb and Shop.com have also joined hands to launch a customized, interactive live-streaming channel, “SHOP LIVE.”
Of course, investors have been kind to Verb as a result of all these positive announcements. For the past month, VERB stock is currently up about 24%. Yet, with its outstanding performance, there should still be more upside here.
Sundial Growers (SNDL)
As you may know, cannabis producers are having a tough time lately. After gaining a head of steam in the runup to the inauguration, marijuana stocks started to lose ground when it became apparent that U.S. federal legalization would take some time. However, many companies got a new lease on life as a result of the rally.
When it comes to the Reddit penny stocks, Canada’s Sundial Growers is one such cannabis enterprise, revitalized due to the help of Redditors. True, SNDL stock has given away some gains over the last month, which is not surprising. Sundial issued a massive amount of stock during this past year to drum up cash for its turnaround. Naturally, some investors are annoyed. Plus, there are several other recovery plays gaining interest.
However, despite the skeptics (and I’ll admit I am one of them), this company has done quite a bit to restructure its operations and develop new revenue streams. With zero debt and roughly $1.1 billion of cash, Sundial invested in several companies through a joint venture with SAF Group, trying to take advantage of global cannabis opportunities. Now, these investments are paying dividends. In recent quarterly results, income from strategic investments outpaced cannabis sales.
For the last month, shares of SNDL stock are down a little over 11%.
Reddit Penny Stocks to Buy: Dynatronics (DYNT)
Last up on this list of Reddit penny stocks is DYNT stock. Dynatronics manufactures rehabilitation and physical therapy products, including therapy devices, medical supplies, treatment tables and rehabilitation equipment. Physical therapists, chiropractors and other medical professionals utilize this company’s products day-to-day.
Of course, because of the Covid-19 pandemic, Dynatronics has suffered badly. For 2020, net sales came in at $53.4 million, a drop of $9.2 million or about 15%. Additionally, gross profit for the year decreased by $4.1 million (21.3%) to $15.1 million. Much of this decline has to do with stay-at-home policies in response to the pandemic. Naturally, those restrictions led to a steep drop in physical therapy.
However, now restrictions are fading and things are getting back to normal, despite fears surrounding the Delta variant. With that in mind, it’s best to think of DYNT stock as a recovery play. If guidance and the last few quarters are any indicator, Dynatronics should be in for a turnaround.
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On the publication date, Faizan Farooque did not have (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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.