Seeking to strike gold with explosive returns, investors are turning their attention to penny growth stocks. As the market landscape shifts and the Federal Reserve hints at multiple interest rate cuts, the stage is set for the emergence of overlooked penny stocks ready to skyrocket.
Historical data shows recessions tend to rear their heads more frequently after elections, but the current robust labor market offers optimism for a recession-free horizon. Additionally, many penny stocks are already trading at bargain basement prices, making their growth potential outweigh the downside risks.
All signals point towards a meteoric rise in penny growth stocks. In this journey, I’ve unveiled seven hidden gems in the stock market that are poised to deliver significant returns. These stocks are currently trading at around $5 or less per share but are showing early signs of a big upward swing. Let’s dive into these promising penny growth stocks!
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The semiconductor sector has been a high flyer in the market, surpassing broader indices with ease. While Nvidia (NASDAQ:NVDA) has led the way, the overall semiconductor industry’s future looks bright. Enter Navitas Semiconductor (NASDAQ:NVTS), a key player in gallium nitride (GaN) integrated circuits.
Navitas pioneers in GaN technology, encapsulating drive, control, and protection in one user-friendly integrated circuit. Their GaNFast ICs promise 100 times faster switching speeds while reducing energy consumption by 40%. Despite these strong fundamentals, Navitas’ stock has struggled to soar, fluctuating between $3.50 and $10.50. Recently, it slipped below the $5 mark to a mere $4.40, edging close to the $3.50 floor.
This dip signals an entry point before a potential rebound, supported by robust financials. Navitas recorded a remarkable 111% growth in Q4 revenue to $26 million, topping estimates by over 2%. While the company posted losses of $32.6 million, translating to a -125% net margin, the robust $153 million cash reserve with minimal debt sets the stage for bridging the profitability gap. Analysts foresee profits by 2026, expanding significantly by 2027 to yield a modest P/(2027)E ratio of 9x. With projected sales tripling from $113 million in 2024 to $450 million in 2027, Navitas appears significantly undervalued.
Taseko Mines (TGB)
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Taseko Mines (NYSEMKT:TGB) is a Canadian copper miner riding high on the wave of robust commodity prices. With 2023 revenue hitting CAD 525 million, a 34% year-over-year increase, Taseko’s strengthened position in the Gibraltar Mine at 87.5% contributed to this growth. The company posted a net income of CAD 83 million (CAD 0.29 per share), with adjusted net earnings at CAD 44 million (CAD 0.15 per share).
In addition to its operations at Gibraltar, Taseko is progressing with the Florence Copper Project, a significant copper asset in Arizona. Amid copper prices hovering near $4, significantly higher than the pre-pandemic sub-$2.50 figures, the outlook for the commodity remains optimistic for the foreseeable future.
Taseko is expected to clock in 9 cents per share in EPS for 2024, with a potential surge to 40 cents by 2026. During this period, revenue may leap from $388 million to $617 million. At current share prices, Taseko boasts a modest 5x 2026 EPS multiple, signaling an attractive risk-reward ratio for potential robust returns.
