If you’re on the search for growth plays that are undiscovered or under-the-radar, you might take a look at the promising penny stocks to watch. Some may consider penny stocks, or stocks trading for under $5 per share, a wide pool of former high-fliers, melting ice cubes, and value traps.
But among the thousands of penny stocks listed on major exchanges or trading the over the counter market, there are plenty that represent great opportunities for risk-tolerant investors. While many of these prime opportunities are of the value variety, there are plenty of promising growth stocks in “penny stock territory” as well.
Below are three of the most promising penny stocks to watch. Interestingly enough, each one is based outside the United States. Under-the-radar at this present time, you want to consider entering positions in them now, before company-specific catalysts begin to play out.
Grab Holdings (GRAB)
Singapore-based Grab Holdings (NASDAQ:GRAB) is a “new economy” powerhouse in its home market of Southeast Asia. As I noted in prior discussion of this company, Grab is very much like Uber Technologies (NASDAQ:UBER), if Uber was also active in the fintech space.
Despite this high exposure to fast-growing industry, however, GRAB stock has thus far not had a successful track record. Since becoming a publicly-traded company in 2021, Grab has tumbled from over $10 per share, to around $3.50 per share. That said, a recovery may still be up for grabs for Grab.
As Seeking Alpha commentator JR Research has argued, sentiment for GRAB could make a hard shift back to bullish, as it becomes more clear to the market that the company is set to experience growth re-acceleration starting in 2025. With this, consider it one of the promising penny stocks to watch.
Lesaka Technologies (LSAK)
Formerly known as Net 1 UEPS Technologies, Lesaka Technologies (NASDAQ:LSAK) fintech and payment technologies firm. While incorporated in the United States, Lesaka is based in South Africa, and operates primarily there and in adjacent markets.
In years past, LSAK experienced steady price declines, because of issues like persistent operating losses. Because of these declines, Lesaka fell into penny stock price levels. More recently, however, shares have been leaving from “penny stock territory.” Largely, because of Lesaka’s recent moves to scale up through acquisition.
In February, the company gained Touchsides, a merchant services company serving South Africa’s tavern market. This month, Lesaka announced plans to acquire another local competitor, Adumo.
These deals could produce material cost and growth synergies. In turn, enabling Lesaka to become a fintech powerhouse in Southern Africa. Before Lesaka’s transformation begins to pay off, consider LSAK a buy.
Niu Technologies (NIU)
Niu Technologies (NASDAQ:NIU) is a China-based manufacturer of electric scooters. During the height of “EV stock mania,” NIU traded for prices nearing $50 per share. Today, shares change hands for around $2.25 per share.
However, unlike before, when NIU stock was perhaps overvalued and overhyped, today you can get into this growth play at a deep value price.
As my InvestorPlace colleague Muslim Farooque argued last month, Niu has been making a comeback, as seen with the improvements in the company’s vehicle delivery numbers. During Q1 2024, scooter deliveries rose by around 36.8%, thanks to the launch of new electric scooter models.
After several years of steep losses, Niu is expected to report earnings of 20 cents per share this year, and 30 cents per share in 2025. Merely hitting these forecasts could send NIU through the “penny stock ceiling,” back to prices above $5 per share.
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.
