Full disclosure: I hate penny stocks.
Most of the time, they pose as “get-rich-quick” opportunities when, in reality, they are often just really poorly run companies, with structurally flawed business models, shoddy management teams, and zero hope of unlocking real economic value for shareholders in the long run.
Most of the time, penny stocks stay penny stocks forever – or end up collapsing to zero.
That’s why, in my mind, penny stocks are “fool’s gold.” They offer the prospect to get rich quick, but they rarely deliver.
But you know what I hate more than penny stocks? Blanket statements.
No two people are the same. No two companies are the same. And no two stocks are the same. Therefore, although I generally dislike penny stocks, I also acknowledge that there are some high-quality penny stocks out there that do offer investors a real opportunity at getting rich quick.
I may have just found one of those legitimate penny stocks.
It’s a company at the epicenter of the “Buy Now, Pay Later” market, or BNPL for short. For those who are unaware, BNPL is a relatively new type of digital fintech product that allows folks to buy a product today, and pay for it through regularly scheduled installments in the future. It’s basically a credit card, except BNPL services normally don’t charge interest, because BNPL service providers don’t make their money off those interest payments – rather, they make their money through a commission fee on the initial transaction.
Because they don’t charge interest – and are essentially free to use for consumers – the bull thesis on BNPL products is that they are going to eventually replace your credit card.
So far, the numbers are working in favor of that bull thesis. In 2019, U.S. payment volume through BNPL services measured just $20 billion. In 2020, that number jumped to $24 billion. In 2021, it is on track to rise to $100 billion.
Yep. You read that right. U.S. BNPL payment volume has grown about 5X in just two years…
Now, to be sure, there are some concerns with the industry. As you would presume, the lack of interest payments has attracted overly greedy consumers who overspend on BNPL services, and as a result, are now falling behind on payments. One study estimates that about 34% of consumers who use BNPL services are behind on one or more payments.
This has prompted regulatory scrutiny. Just yesterday, the Consumer Financial Protection Bureau issued a series of orders to five BNPL companies, including Affirm, Afterpay, Klarna, PayPal, and Zip. The stocks got crushed on the news.
But we see this as a necessary step in the journey of BNPL services toward global ubiquity.
The basic reality here is that BNPL is a breakthrough innovation in the way consumers pay for things that makes it cheaper for them. That’s a huge win. Since when did innovations that offer huge wins to consumers fail because of regulatory scrutiny?
It doesn’t happen. Rather, all this scrutiny will do is enhance the laws and structures around the BNPL market to make it healthier and stronger – and ultimately prep it for bigger long-term growth.
It remains our staunch belief that BNPL services will ultimately replace credit cards. When they do, the likes of Visa and Mastercard will be replaced by the likes of Affirm and PayPal.
But that’s not all that will happen…
Underneath the headline behemoths, innovative new BNPL startups will emerge and craft niches for themselves in this booming industry – and along the way, grow like wildfire while scoring bold early investors enormous returns.
And guess what? We may have just discovered the most interesting BNPL startup in the world right now.
It’s a tiny company, with a 20-cent stock, that virtually no one is talking about right now… but which, in the long run, could easily soar 10X or more from current levels.
That’s why this stock was recently highlighted in my ultra-exclusive research advisory service, The Daily 10X Stock Report, which is dedicated to picking one explosive, hypergrowth stock pick, every single the day stock market is open, with the potential to soar 10X in value.
I started this service just over a year ago – and in that short time, I’ve already scored my readers over 100 triple-digit winners and six different stocks that have soared 10X or more in value.
This tiny BNPL stock could be my next 10X winner.
To find out more about this explosive opportunity – and learn about how to identify small stocks with huge upside potential – click here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
