11 Best NYSE Penny Stocks to Buy Right Now

In this article we will take a look at 11 Best NYSE Penny Stocks to Buy Right Now.

Small and medium-sized companies are most affected by the direction of the economy and interest rates. With the US Federal Reserve cutting interest rates and the economy steering into a soft landing, the focus is slowly shifting towards penny stocks, which remain well positioned to be buoyed by improving macroeconomics.

It is time to go all in on the small company rotation game after many years of market dominance by large joint stock companies. That’s a sentiment echoed by Citi U.S. equity strategist Scott Chronert, who believes small-cap stocks offer an affordable way to invest in value and are well-positioned to create long-term value.

READ ALSO: 10 worst performing growth stocks in 2024 and 8 Best Micro Cap Stocks to Buy According to Analysts.

“Collectively, investors may pay a much lower multiple for a similar growth profile going forward,” he wrote. “Given post-pandemic idiosyncrasies, the lack of a real cycle and secular trends supporting managers, we still want to own some Large Cap winners, but increasingly see Small/Mid Cap as an attractive alternative to the others 493. Put differently, we’re more comfortable dipping our toes in search of fundamental winners and thematic expressions.”

Although small- and mid-cap stocks have delivered above-average, double-digit gains over the past year, they look increasingly attractive amid a monetary policy shift. The US Federal Reserve, which is beginning its monetary easing cycle, is making it easier for such companies to borrow money to expand their businesses. With their long-term outlook looking positive, investors are slowly taking note of their low valuation.

Similarly, the Russell 2000 ETF, which consists mostly of small and mid-cap companies, is up 13% compared with a 22% gain for the S&P 500, confirming the huge room for gains among penny stocks.

“We continue to believe that these stocks have been unfairly penalized (or ignored) given what we have seen as a mismatch between fundamentals and the group’s relative performance, and nothing has changed in that regard. It is only a matter of time before this group’s fortunes take a turn for the better” now that central banks are cutting interest rates, BMO analysts wrote in research notes to investors.

Likewise, there is an influx of investment in small-cap exchange-traded funds amid growing optimism that the companies are fairly valued with huge upside potential. According to ETF journalist Dave Nadig in an interview on CNBC, cash inflows into penny stocks may not necessarily be a rotation away from winning growth trades. Instead, it is a diversification play as the focus shifts to gaining broader exposure towards the end of the year. The diversification strategy is part of a broader strategy to absorb volatility

″(Investors) are now for the first time in forever buying value, buying some of these defensive sectors, buying small caps. But they haven’t stopped buying the other stuff as well,” Nadig said in an interview on CNBC ETF Edge. “I think it’s money coming in from the giant bucket of money markets that we know is sitting out there.”

Given that large-cap stocks continue to outperform the overall market, the focus of penny stocks is mostly on companies that are profitable. Given that 40% of small caps in the S&P 500 are unprofitable, investors are turning their attention to ETFs that exclude unprofitable companies as they optimize their returns amid the current Bull Run.

The focus on penny stocks in profitable companies stems from the historical thesis that small caps often outperform large caps when the economy is expanding amid solid macroeconomics. As a result, small-cap companies with exposure to new technologies such as artificial intelligence are becoming some of the most sought after due to their huge upside potential.

The best NYSE penny stocks to buy right now also stand out because of their attractive valuations and the fact that they have a narrow expected earnings growth gap compared to large companies. The fact that investors have to pay a much lower multiple for the penny stocks also makes them stand out on the risk-reward front.

Our method

We used the Finviz screener to find NYSE stock listings that trade below $5 a share. 31 October. We then selected stocks that analysts are bullish on and expect to generate significant long-term value due to their solid underlying fundamentals. Finally, we ranked the stocks in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.

At Insider Monkey, we’re obsessed with the stocks that hedge funds are piling into. The reason is simple: Our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Best NYSE Penny Stocks to Buy Right Now

11. ACCO Brands Corporation (NYSE: ACCO)

Price per October 31: $4.97

Number of hedge fund holders: 24

ACCO Brands Corporation (NYSE: ACCO ) is a company that manufactures and sells products for school, office and technology use. They offer things like computer and gaming accessories, planners and cleaning supplies. Although the company remains profitable, it has come under pressure in 2024 and is down 20% year-to-date, underperforming the S&P 500, which is already up more than 22%.

ACCO Brands Corporation (NYSE: ACCO ) sentiment has come under pressure at the company, delivering declining sales, and its core business of selling a variety of office and school supplies hit by inflationary pressures. It delivered mixed results for the third quarter that were in line with expectations supported by improved sales trends. Net sales decreased 6% to $421 million, mainly impacted by currency effects. On the other hand, net income was $9.3 million, or $0.09 per share. stock. the company is on track to achieve $20 million in full-year cost savings as part of its cost-cutting program

Primarily due to working capital management, ACCO Brands’ operating cash flow improved to $95.5 million in the 3rd quarter from $70.7 million a year earlier. At the end of the third quarter last year, the company’s consolidated gearing ratio was 3.8x and fell to 3.5x.

Likewise, ACCO Brands Corporation’s (NYSE:ACCO) long-term outlook remains positive as the economic environment improves as inflation declines and the Fed cuts interest rates. The company has embarked on a cost management strategy backed by strategic improvements in infrastructure and operational efficiencies that are expected to drive bottom line growth and improved cash flow.

It remains one of the best NYSE penny stocks to buy now, as it has increased its dividend payments by an average of 4.9% over the past three years. ACCO Brands Corporation (NYSE: ACCO ) has already confirmed a dividend of $0.075 per share. per share, representing an annual dividend of $0.30 and a yield of 6.24%.

10. Eventbrite Inc. (NYSE:EB)

Price per October 31: $3.16

Number of hedge fund holders: 25

Eventbrite Inc. (NYSE:EB) is a company best known for providing a platform for event management and ticketing services. The company is only starting to pick up its pieces after facing significant challenges at the height of the COVID-19 pandemic, where there were movement restrictions. While the stock is down about 70% from its all-time highs, its outlook is showing signs of improvement amid an increased desire for live experiences and reduced inflation fueling ticket sales.

Last year alone, Eventbrite Inc. sold (NYSE:EB) over 300 million tickets to over five million events while inflation was still high. With inflation falling well below the 4% threshold in major economies, the company is on the cusp of a booming ticketing business. The report for the second quarter was the clearest indicator that the company is back in robust growth.

Net revenue rose 7% in the quarter to $84.6 million, despite gross ticket sales falling from $890 million in the same quarter a year ago to $840 million. While Eventbrite Inc. (NYSE:EB) has lowered its revenue expectations for the full year, it has taken the necessary steps to reduce its operating costs, which is one of the ways to strengthen the profit margin. As a result, it is laying off 11% of its workforce, cutting 8% of its staff in the first half of last year.

In addition, Eventbrite Inc. (NYSE:EB) moved to capitalize on the growing live event market despite a drop in ticket volume in the second quarter. It also remains in robust liquidity, enabling it to invest in technology as it focuses on long-term profitability. Given that the company’s revenue has grown over 18% over the past 12 months, it remains in a phase of robust growth, underscoring why it’s one of the best NYSE penny stocks to buy right now .