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Best Penny Stocks to Buy Now? 3 To Watch Under $4

3 hot penny stocks to watch right now.

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If you’re looking for penny stocks to buy today, chances are you feel the bullish sentiment buzzing about. Thanks to the latest CPI inflation data for October showing lower-than-expected results, investors are taking a risk-on approach. If you’re unfamiliar with these cheap stocks, there’s a lot to consider before making a move.

Unlike larger stocks, penny stocks are more heavily influenced by speculation and sentiment trading than fundamentals. Needless to say, whether you’re trading low-priced stocks or stocks over $100, having a strategy matters. Learning how to navigate volatility and managing risk plays an important role.

Small Cap Stocks Are On Fire Right Now

Why would anyone want to buy penny stocks or trade the with such high risk? Simply put, the reward potential can far supersede those risks. If you look at the index for small-cap stocks, for example, the Russell 2000 (NYSEAMERICAN: IWM), you’ll see explosive moves. The index ETF is up more than 4.5% in a single day. Other major index ETFs like the S&P 500 (NYSEARCA: SPY) and Nasdaq (NASDAQ: QQQ) are trading significantly higher. However, their percentage gains pale in comparison.

​This increase comes against the backdrop of a rough year for small-cap stocks, which constitute the Russell 2000. Over the last year, the index has experienced a nearly 10% decrease, contrasting with the S&P 500’s 10% increase in the same period.

However, the third quarter (Q3) earnings season for the Russell 2000 has been relatively positive. About 63.4% of the index constituents beat analyst expectations, marking the highest earnings beat rate in two years. Despite initial forecasts of a -14.2% earnings growth, the actual growth improved to -8.9%, and net profit margin expectations are on the rise.

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This improvement in Q3 comes amidst an earnings recession expected to last until the fourth quarter (Q4) of this year. Nevertheless, concerns persist around pricing power and net profit margins, with Q4 estimates being downgraded and year-over-year growth expectations for the quarter turning negative.

Penny Stocks To Watch

Blink Charging Co. (NASDAQ: BLNK)

Petco Health & Wellness (NASDAQ: WOOF)

Luminar Technologies (NASDAQ: LAZR)

Blink Charging Co. is a provider of electric vehicle (EV) charging equipment and services. They manufacture, own, and operate EV charging stations.

Earlier this month the company announced a record third quarter in 2023, with a 152% revenue increase to $43.4 million. This growth is attributed to a 167% increase in gross profit and 162% rise in product sales. Service revenues increased by 119%, contributing to the overall performance. The company has also raised its 2023 revenue target to $128 – $133 million.

They aim for a positive adjusted EBITDA run rate by December 2024. Despite these gains, Blink reported a significant net loss of $112.7 million, primarily due to a non-cash goodwill and intangible assets impairment charge. The adjusted EBITDA loss for the quarter was $11.7 million, an improvement over the previous year.

BLNK Stock Forecast Sentiment

This financial performance could impact Blink Charging’s prospects. The revenue growth and gross profit increase have attracted attention. However, the substantial net loss and non-cash impairment charges may raise concerns down the road. The bullish case would highlight the revenue growth and expanding market presence. The bearish case might focus on the net losses and challenges in achieving profitability. A balanced case would weigh the company’s growth potential against the financial risks and market competition

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2. Petco Health & Wellness (NASDAQ: WOOF)

Petco Health and Wellness Company, Inc. is a comprehensive partner in pet health and wellness. They offer a range of pet care products and services. The company was founded in 1965 and operates over 1,500 pet care centers.

Earnings will come into focus this month after the company announced that it will release its third quarter 2023 earnings on November 29, 2023. The results will be available at 7:00 a.m. Eastern. Following the release, Petco executives will host a conference call at 8:00 a.m. Eastern to discuss the financial and operational performance.

Petco is known for setting standards in pet care, offering wellness products, services, and solutions. Their operations span the U.S., Mexico, and Puerto Rico. These include merchandise, companion animals, grooming, training, veterinary hospitals, and mobile clinics. Petco also engages in animal welfare through Petco Love, supporting thousands of local groups and facilitating pet adoptions.

WOOF Stock Forecast Sentiment

Could this upcoming earnings report impact Petco’s stock? Investors will likely focus on revenue growth, profit margins, and operational efficiencies. The bullish case may highlight the company’s market presence and expansion in services. The bearish case could focus on competitive pressures and operational costs. A balanced view would consider Petco’s market position and growth potential against industry trends and economic factors. One thing is certain, retail sales data coming out this week could be a canary in the cole mine when it comes to companies across the sector, including Petco.

3. Luminar Technologies (LAZR)

Luminar, a global automotive technology company, focuses on advanced vehicle technologies. They are known for their LiDAR and related software products.

In Q3 2023, Luminar reported significant advancements and financial results. The company highlighted progress in industrialization, product development, and business growth. They achieved key milestones, including the successful installation of their Iris product on Volvo cars and developing a next-generation LiDAR prototype. Financially, Q3 revenue reached $17 million, a 33% increase from Q3 2022. However, the company reported a substantial GAAP net loss of $134.3 million. Despite this, Luminar maintains a strong cash position, with expectations to achieve gross margin profitability and reduce free cash flow spending significantly.

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LAZR Stock Forecast Sentiment

The financial results and business updates from Luminar have influenced sentiment. The revenue growth and progress in product development might be seen positively, indicating potential for future profitability.

However, the significant net losses might raise concerns about the company’s current financial stability. Bullish investors might focus on the company’s technological advancements and market potential. Bearish investors may emphasize the financial losses and challenges in achieving profitability. A balanced view would consider both the potential growth from Luminar’s technology and the current financial risks.

By J. Phillip

I stay on the cutting edge of industry and enjoy finding out about new companies that major outlets and funds haven't heard of (yet). Most of the time you can find me deep in the corporate filings, focusing on fundamentals that could be behind the next big move in certain stock.

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