Invest in what you know; that’s a well-known and straightforward strategy some use to find stocks to buy. The idea is that if you purchase something frequently, you might want to invest in that store’s stock. If you fly a particular airline because you enjoy the product, you might choose to buy that airline’s stock. Drink Starbucks every day?
The company is publicly traded and sells hot liquid at a higher price per ounce than record-high gas prices. Famous billionaire investor Warren Buffett is a supporter of this type of ideology. Is it the best way to identify penny stocks to buy? The jury is out on that verdict. But it might be worth mentioning, especially during times like these when the stock market is down.
As much as you might think your favorite brands are worth hundreds or thousands of dollars per share, many are actually trading as penny stocks right now. Today we look at five household name penny stocks that can be bought for less than that Starbucks coffee.
Top Penny Stocks To Watch (household names)
- Oatly Group (NASDAQ: OTLY)
- Mesa Air Group Inc. (NASDAQ: MESA)
- BurgerFi International Inc. (NASDAQ: BFI)
- Trivago (NASDAQ: TRVG)
- Bark Inc. (NYSE: BARK)
Oatly Group (NASDAQ: OTLY)
Got milk? Oatly went public to spearhead the alternative milk revolution in 2021. Shares ultimately reached highs of $29 but have been falling since. As the largest oat milk company, it’s hard to miss their brand on store shelves. The Swedish company also offers various dairy product alternatives, including cooking creams, ice cream, yogurt, and spreads.
What To Watch With OTLY Stock
The company’s latest round of earnings has brought mixed reactions to the market. Oatly recorded a wider loss in Q4 compared to 2020’s similar period. Meanwhile, revenue beat analysts’ expectations and came in much higher than its previous year’s Q4. This year the oat product company expects to hit $880 million to $920 million in revenue, a year-over-year jump of 37%-43%.
Like other global brands, Oatly hit some hurdles with supply chain and inflationary pressures. However, management appears confident in overcoming these near-term headwinds. Toni Petersson, Oatly’s CEO, commented in a March update, “While we experienced inflationary cost pressures and supply chain challenges in certain areas of our business during the fourth quarter, we continue to believe that by having more localized self-manufacturing production, we can achieve much better production economics and operating efficiencies, reduce our environmental impact, and increase profitability over the next several years.”
Mesa Air Group Inc. (NASDAQ: MESA)
High-flying airline stocks have been on the radar this week. Earnings reports from Delta Airlines (NYSE: DAL) and American (NYSE: AAL) kicked off a bullish start for the sector. Meanwhile, M&A speculation circling Spirit Airlines (NYSE: SAVE) and JetBlue Airways (NASDAQ: JBLU) has brought a focus to lower-priced airline stocks.
Mesa Air Group is one of these well-known brands if you travel frequently. The Arizona-based company provides regional air service in 41 states and the District of Columbia. It also services the Bahamas and Mexico.
What To Watch With MESA Stock
While M&A speculation has become apparent, it hasn’t necessarily trickled down to MESA stock so far. Regardless, traders with MESA stock on their watch list are likely focused on what’s to come on May 9th. This is when the airline is expected to report its second-quarter earnings for fiscal 2022.
BurgerFi International Inc. (NASDAQ: BFI)
Do you ever go out to eat? Whether it’s a family affair or a quick stop, burger joints are a frequent go-to for consumers. While companies like Shake Shack (NYSE: SHAK) are trading well into the $60 range, other famous burger joint brands are actually hovering in penny stock range.
BurgerFi is one of these brands. The company went public via a SPAC merger with OPES Acquisition Corp. Like many de-SPAC deals, retail investors haven’t necessarily been eating up gains in the stock market. But will this year be different? BurgerFi has over 100 restaurants specializing in burgers. It’s also the owner of Anthony’s premium pizza brands operating 61 corporate-owned locations.
What To Watch With BFI Stock
Like OTLY, BFI stock could be a point of interest for those looking for low-priced companies that just reported earnings. The company reported 261% growth in the fourth quarter with an increase in systemwide same-store sales of 7%. Full-year results showed a more than 100% jump in revenue, with same-store sales climbing 14%. This year, the company expects annual revenues of $180-$190 million with mid-single-digit same-store sales growth. BurgerFi also plans on 15-20 new BurgerFi brand franchise openings.
Trivago (NASDAQ: TRVG)
“Hotel, Trivago” is probably something you’ve heard before. The hotel-booking website has a simple message offering discounted rates for hotel stays. Obviously, the travel sector was hit hard during the pandemic, and companies like Trivago saw their valuations plummet.
What To Watch With TRVG Stock
Like most travel stocks, pandemic concerns remain a sticking point. However, mask mandates lifting in the US has helped bolster sentiment for now. Last year, Trivago saw strong sales growth and positive EBITDA. Shortly after, analysts, including UBS, bumped up price targets ($2.65 to $2.80). Traders are likely searching for continued growth and a full recovery of the travel & hospitality sectors. While time will surely tell, it will be interesting to see if companies like Trivago can rebound in the stock market.
Bark Inc. (NYSE: BARK)
If you’ve got a dog, Barkbox is probably something you’ve been advertised. According to data from Rover, the average annual expenditure on dogs can be between $480 and $3,470 per year. Everything from pet insurance and veterinary bills to pet food and even extra apartment deposit costs are factored in. Bark Inc. has targeted this niche by providing a solution to undecided consumers looking to spoil their pets.
Bark provides themed toy and treat subscription services specifically for pets. Its BarkBox, Bark Eats, and Bark Bright are a few brands under Bark’s umbrella. Like Oatly, Bark did its IPO via a SPAC merger with Northern Star Acquisition Corp., in a deal valued at $1.6 billion. Since the public debut, however, BARK stock has been a bit chewier than investors would have liked.
What To Watch With BARK Stock
Consumer products and discretionary spending-focused companies are weathering the pandemic and inflationary storm. Earlier this year, Bark announced its fiscal Q3 2022 results showing a slight EPS beat (loss of $0.12 vs. a loss of $0.13 per share) on $140.8 million in revenue. This revenue jump was 33.9% higher than the same quarter in the previous year.
The company also added 371,000 active subscriptions for a total of 2.3 million at the end of the quarter. New partnerships with Walmart and Walmart’s website have also become a potential catalyst for 2022. Looking ahead, the company expects total revenues of over half a billion dollars this year but slightly lower than its original guidance given on its Q2 earnings call.
Are Penny Stocks Worth It?
Investors tend to think of penny stocks as fly-by-night companies worth a trade here and there. However, with the stock market down, many well-known brands are trading at depressed prices. Are penny stocks worth it? That’s something I’ll leave up to you to decide. But if you’re hunting for lower-priced household stocks, these are a few that have firmly breached the $5 penny stock threshold.
