SPECIAL REPORT The Top 7 Stocks for 2024

The 7 Best Penny Stocks to Buy Now


  • Acacia Research (ACTG): After a year of sideways price performance, implementing a new strategy could propel ACTG stock to higher prices.
  • Advantage Solutions (ADV): ADV stock performed well in 2023, but don’t assume shares in this in-store marketing company have topped out.
  • Mama’s Creations (MAMA): MAMA stock is another top penny stock performer from last year with additional runway.
  • Keep reading for more of the best penny stocks to buy now!
best penny stocks - The 7 Best Penny Stocks to Buy Now

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The rising tide of the broad market lifted the boats of many penny stocks (or stocks trading for $5 per share or less) during the last two months of 2023. Yet now, as a new year takes shape, what are the best penny stocks to buy now?

Uncertainty remains about the Federal Reserve’s interest rate pivot in 2024. This could benefit many penny stocks.

Lower rates could both help boost stock valuations and boost their underlying operating performance. However, not every promising penny stock play depends on interest rates reversing course in a big way.

There are plenty of stocks in this category that could also rise, thanks to more company-specific catalysts. So, what are currently the seven best penny stocks to buy now? Consider these seven. Each may rally due to improving macro picture or independent factors.

Acacia Research (ACTG)

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Controlled by hedge fund Starboard Value, Acacia Research (NASDAQ:ACTG) is a deep value penny stock I’ve talked about for several years, but admittedly has failed to live up to expectations.

A net operating loss shell, Acacia has long planned to use its accumulated net operating losses, by purchasing profitable businesses/assets.

However, the company has been slow to implement this strategy. This has resulted in underperformance for ACTG stock since 2022. Yet as a Seeking Alpha commentator recently pointed out, execution of this strategy may now be finally in motion. Acacia has started to make acquisitions.

Following a recent asset sale, the company may soon have a $391 million war chest to pursue deals. For reference, this figure represents ACTG’s market cap. Further execution of this strategy could help bridge the valuation gap (ACTG trades at a 21% discount to book value).

Advantage Solutions (ADV)

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Back in August, I named Advantage Solutions (NASDAQ:ADV) one of the best penny stocks, for two reasons. First, shares in this in-store marketing company traded at a very low valuation. Second, there was also strong potential for improved profitability.

Hence, ADV stock appeared poised to make a big leap higher, thanks to both improved results and multiple expansion. More or less, this has played out over the past five months. Trading for around $2.75 per share when I last wrote about it, Advantage Solutions stock now changes hands for around $3.60 per share.

But even after this 31% surge higher, don’t assume that the stock has topped out. The stock remains cheap, at around 8.4 times forward earnings. Factors like easing inflation (which will help normalize labor costs) still point to improved results ahead. Continued insider buying is another bullish signal for ADV shares.

Mama’s Creations (MAMA)

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Mama’s Creations (NASDAQ:MAMA) is another of the penny stocks that performed well in 2023, yet still may have plenty of runway. Sure, in contrast to ADV, MAMA experienced a far greater level of price appreciation last year.

Since last January, MAMA stock has gained by around 166%. This run-up has led to high valuations for shares of this refrigerated food company (30.75 times forward earnings). So, what is going to keep Mama’s Creations stock moving higher, albeit at a slower pace than in the prior year?

Through efforts like its recent expansion into direct-to-consumer online sales, Mama’s Creations could sustain elevated revenue and earnings growth, similar to those seen in its latest fiscal results. While further multiple expansion may be limited, MAMA could keep climbing, in line with incremental increases in profitability.

Pitney Bowes (PBI)

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I have called Pitney Bowes (NYSE:PBI) one of the best penny stocks many times since late 2022. Mainly, because there is currently an activist-led turnaround underway at this business products company.

PBI stock has gained since said activist (Hestia Capital) prevailed in a proxy contest for control of the company’s board last May. Initial signs of success with the turnaround (strong quarterly results) points to more improvements ahead in 2024, which could also drive another moderate boost for shares.

However, the ultimate payoff may take shape over the course of the next several years. As I argued back in November, the full implementation of Hestia’s turnaround game plan may cause shares eventually rising to level three-to-four times that of current prices. In the meantime, investors also continue to collect PBI’s 5 cent per share quarterly dividend (giving the stock a forward yield of 4.6%).

Sachem Capital (SACH)

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If the much-awaited “Fed pivot” on interest rates actually happens in 2024, it could be a boon for real estate stocks.

Yet while there are many vehicles for which to make this wager, purchasing Sachem Capital (NYSEAMERICAN:SACH) may be an interesting (and potentially very profitable) way to do it.

Sachem is a real estate investment trust (or REIT), specializing in making high interest “hard money” loans to investors who buy and renovate residential and commercial properties. The real estate downturn has placed pressure on SACH stock, yet this REIT has continued to provide investors with big dividend payouts.

At current prices, shares have a forward yield of 11.86%. However, alongside these big payouts, SACH stock could make big gains, as lower interest rates could provide a boost to its valuation. A real estate rebound could also help to narrow the stock’s 29% discount to its book value.

Scott’s Liquid Gold (SLGD)

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A recent development makes Scott’s Liquid Gold (OTCMKTS:SLGD) one of the best penny stocks. Formerly a manufacturer of household and beauty products, the company has since sold off its brands, including its eponymous Scott’s Liquid Gold wood and floor care products brand.

As announced on Dec. 26, SLGD is following this restructuring with a transformative merger with asset management firm Horizon Kinetics. Legacy shareholders of SLGD stock are expected to own just 2%-4% of this combined entity.

That said, the pricing terms of this deal (Horizon’s owners swapping the business for SLGD shares at a conversion price of $1.25 per share, versus SLGD’s current 98 cent per share stock price) may be favorable.

While not for certain, given Horizon Kinetics’ past launch of a blockchain-themed ETF, it too may decide to get into the burgeoning crypto ETF space.

Yatra Online (YTRA)

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Last month, I argued the bull case for Yatra Online (NASDAQ:YTRA), a U.S.-listed entity that owns a majority stake in India-based travel marketplace Yatra Online Limited. In a nutshell, you can say this is a deep value, special situation kind of opportunity for those interested in this market niche.

YTRA stock trades at a big discount to its underlying value. With the Indian-listed shares in its subsidiary rising faster than YTRA itself, this valuation gap has widened. Big valuation gaps aren’t rare in the penny stock space. Such discount can persist, as there’s typically a lack of a catalyst to unlock this value.

However, with YTRA, there is a potential catalyst: plans to make the U.S. and Indian-listed shares mutually exchangeable. As mentioned previously, arbitrageurs could start shorting the Indian shares and going long the U.S. shares, reducing this spread.

On the date of publication, Thomas Niel held a long position in ACTG. He 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.

Article printed from InvestorPlace Media, https://investorplace.com/best-penny-stocks/.

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