After a year of significant volatility, 2024 is shaping up to be promising for penny stocks. While the Nasdaq saw a small cooldown recently alongside other cyclical assets as investors took profits, I believe the stock market will rebound in the coming weeks and reach new highs. The S&P 500 closed just shy of its record last week, and the Nasdaq wasn’t far off its peak either, only 6% off its highs.
Though some concerns remain around the stance of monetary policy, a market crash seems unlikely in the first half of 2024, given solid economic expansion and a healthy job market. That makes now an opportune time to buy into startups before rate cuts amplify their ability to borrow and grow. Let’s dive in!
Talkspace (TALK)
As technology permeates deeper into our lives, one of the most glaring issues arising is increased isolation and lack of human interaction. That’s especially true among younger generations that are glued to their phones and laptops. This has fueled a surge in mental health issues, with nearly 20% of adults now facing mental health challenges. This concerning trend is only expected to intensify going forward.
One way to capitalize on this megatrend is through Talkspace (NASDAQ:TALK), an online therapy platform matching users to licensed therapists for mental health support. While AI and automation are disrupting many services, nothing can replicate person-to-person therapy. At the same time, Talkspace incorporates AI via an automated tool checking for signs of suicide risk.
Talkspace is now approaching profitability, with Q3 revenue up 32% year-over-year. Analysts forecast the company could reach profitability as early as Q3 2024, with an average annual revenue growth of around 23% in the years ahead. For a stock trading at just 2.7-times forward sales despite the vast addressable market for online mental healthcare, Talkspace presents tremendous upside potential.
D-Market (HEPS)
For investors monitoring global economic developments, Turkey’s runaway inflation likely caught your eye last year. After dangerously-loose monetary policy fueled inflation to a record high, Turkey executed jumbo rate hikes to curb price growth. This policy shift appears successful so far in slowing inflation.
A prime beneficiary for investors looking to take advantage of this turbulence is D-Market (NASDAQ:HEPS), a fast-scaling Turkish e-commerce company. As Turkey’s inflation outlook improves amid tighter policy, D-Market looks poised to follow the playbook of Latin American e-commerce peers like MercadoLibre (NASDAQ:MELI) and reward early backers with triple-digit returns.
Analysts forecast D-Market’s first-ever profits in Q4 2023, with additional growth expected in 2024. Despite nearly 100% top-line growth anticipated from 2023 to 2025, the stock trades at a mere 0.6-times sales today. Once Turkey’s economic situation steadies, I expect this deeply-undervalued stock to soar.
Ammo Inc (POWW)
With geopolitical tensions escalating over the past two years, global weapons demand has skyrocketed. Defense contractors across the board are seeing record backlogs and blockbuster sales. Yet oddly enough, ammunition manufacturer Ammo Inc. (NASDAQ:POWW) has headed in the opposite direction, despite still-elevated military spending.
After a four-fold revenue expansion in 2022 and over $33 million in profits, Ammo Inc. saw its financials crater last year. But this looks like nothing more than a temporary setback before strong growth resumes. Ammunition remains heavily depleted worldwide, leaving no shortage of restocking demand. Though Ammo Inc. has not reported its backlog in over two years, I suspect it remains very substantial.
With limited downside from current levels, I agree with analysts expecting a return to profitability and renewed growth in 2024. Ammo shortages will persist for years, even if conflicts cease immediately.
Penny Stocks
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Omor Ibne Ehsan 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.
