Investing in penny stocks can reward bold, patient investors. But patience can be in short supply when you can just buy NVIDIA (NASDAQ:NVDA) and sleep well at night. Nevertheless, if you’re looking for penny stocks to buy, you’ve come to the right place.
The allure of penny stocks is the ability to accumulate a significant volume of shares for a modest investment. While many of these stocks won’t pan out, all it takes is to be right on one to benefit from lifechanging gains.
However, many of these stocks don’t generate significant interest from institutional investors because they’re not generating positive earnings. That doesn’t mean you shouldn’t invest in them, but it does mean they may take a long time to pay off.
Another risk in investing in these stocks in 2024 is that high-speed trading programs can target small, unprofitable companies. That doesn’t mean that some of the companies don’t deserve that. Sometimes there are good reasons a stock is cheap. But it can paint all stocks with a broad brush. Here are three penny stocks to buy.
Archer Aviation (ACHR)
One of the most intriguing investment ideas for the next five years and beyond is flying cars. That’s why many investors continue to buy Joby Aviation (NYSE:JOBY), which is considered to be the leader in the electric vertical take-off and landing, or eVTOL, space. However, Archer Aviation (NYSE:ACHR) is another name to consider.
First things first. In June, Archer was certified by the U.S. Federal Aviation Authority to commence commercial operations in 2025. And once Archer begins operations the memorandum of understanding it signed with Signature Aviation gives Archer access to the world’s largest network of private aviation terminals.
Now investors don’t have to worry about the “if” but the “when” of the company’s growth. Archer is well underway with its manufacturing plant in Georgia. At full capacity, the company will be able to build 650 aircraft annually.
For all the positives, investors have been pumping the brakes on ACHR stock in 2024. However, with the stock down 46% year-to-date, the sell-off is starting to look overdone.
Gingko Bioworks (DNA)
Many penny stocks to buy promise to disrupt industry norms. That’s the premise for owning Gingko Bioworks (NYSE:DNA). The company essentially acts as a foundry for the biotech industry. The idea is that Gingko can take a company’s blueprints for things such as biomolecules and cost-effectively mass produce them.
However, a couple of slides in the company’s investor presentation outlines the fundamental problem for the stock.
According to the company, customers choose its platform “because of the scale of data Gingko can offer.” However, it then says it’s having problems realizing revenue because it takes the company time to develop large-scale data generation.
That’s creating a situation where the company’s revenue is declining, which is increasing the company’s losses. And to make investors even more cautious, DNA stock has received a delisting warning.
So what’s the case for buying? It is adding customers and programs. For now, that’s enough for Cathie Wood who continues to buy shares. Wood is known for taking big swings, and this is one of them.
Rocket Lab USA (RKLB)
With a closing stock price of $4.91 on June 18, 2024, Rocket Lab USA (NASDAQ:RKLB) just fell into the penny stock category. RKLB stock is up 5% in the last three months. RKLB stock jumped 7% alone on the June 18 announcement that the company has the first launch agreement for its Electron rocket.
This is the company’s “large” rocket that delivers a larger payload — and more revenue — than its Neutron rockets. The deal is for 10 launches with the Japanese Earth observation company Synspective. Rocket Lab and Synspective have already partnered on four launches.
Investors have been wisely cautious about RKLB stock as the company has had a string of delayed launches that have weighed on an otherwise bright future. The company is not expected to turn a profit until 2026. That means investors may still have to deal with some volatility. But this may be the last time RKLB stock will be on a list of penny stocks to buy.
On the date of publication, Chris Markoch 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.
