In this article, we discuss the 11 popular penny stocks on Robinhood. If you want to skip our detailed analysis of these stocks, go directly to 5 Popular Penny Stocks on Robinhood.
Even though the United States economy has battled recession fears in the past few months, there are many reasons to be optimistic about the future of the market as inflation falls, interest rates stabilize, and investors look towards growth stocks again. The benchmark S&P 500 has returned more than 24% to investors so far this year. The NASDAQ Composite is up more than 44%. Prominent growth stocks like Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG) are all rallying.
This heightened excitement around equities has attracted the attention of retail investors as well. Retail investors, who use digital stock trading platforms like Robinhood Markets, Inc. (NASDAQ:HOOD), have generally favored investments in growth companies that are trading for pennies on the dollar but have tremendous growth potential. Sectors such as cannabis, crypto, and biotech are all hot due to interest from Robinhoood investors. According to data maintained by FINRA, the average daily transactions in OTC Markets were over 300,000 in 2022.
OTC Markets are popular for trades in penny stocks. The rise in trades in penny stocks can be understood in context of these average daily trades. In 2019, before the rise of retail investors at the stock market, the average daily transactions in OTC Markets were just around 180,000. The trade in penny stocks is also important for firms outside the US, since more than three quarters of firms on the OTC are based outside the country. Domestic penny stocks like Barnes & Noble Education, Inc. (NYSE:BNED) have recently started gaining traction on Robinhood as well.
Barnes & Noble Education, Inc. (NYSE:BNED) is a leading solutions provider for the education industry. On December 6, the company posted earnings for the second fiscal quarter, reporting a revenue of more than $610 million, up marginally over the revenue in the same period last year. The firm revealed that retail gross comparable store sales rose more than 3% during the second fiscal quarter. The consolidated GAAP net income from continuing operations increased 2.8% to $24.9 Million, per the firm.
Mike Huseby, the CEO of Barnes & Noble Education, Inc. (NYSE:BNED), during the second quarter earnings call, outlined some of the steps that his company has taken to achieve commendable growth numbers. He underlined that the company had implemented significant cost reduction and operational efficiency initiatives to improve profitability. He also lauded the impact of a subscription-like model that the firm was offering in a business-to-business scenario, noting that it had helped grow revenue visibility.
“Looking ahead, we've identified additional opportunities to improve efficiencies further and reduce operating expenses to continue improving our profitability and cash flow. Importantly, the actions we have taken and continue to take position us to deliver more consistent, sustainable and profitable growth in the years ahead. Shifting to our second quarter performance. Total revenue was $610.4 million, increased by $1.7 million or 0.3% compared to the prior year period. The second quarter sales increase is primarily due to the growth of our First Day programs, which increased 39% to $199 million, partially offset by declines in the à la carte courseware sales, including lower sales from a smaller store footprint as we focused on the profitability of our stores.
Our Methodology
These were selected using the Robinhood Investor Index as well as research using third party tools to identify the most popular penny stocks on trading application Robinhood Markets, Inc. (NASDAQ:HOOD). The analyst ratings of these stocks are also discussed to provide additional context. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the third quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11 Popular Penny Stocks on Robinhood
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Jaguar Health, Inc. (NASDAQ:JAGX) is a commercial stage pharmaceuticals company that focuses on developing prescription medicines for people and animals with gastrointestinal distress, specifically chronic and debilitating diarrhea. In early December, Jaguar Health, Inc. (NASDAQ:JAGX) announced that the FDA had renewed conditional approval of Canalevia-CA1, a drug being developed by the firm for the treatment of diarrhea associated with chemotherapy in dogs.
Unlike pricier options like Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Jaguar Health, Inc. (NASDAQ:JAGX) is one of the most popular penny stocks on Robinhood.
ClearOne, Inc. (NASDAQ:CLRO) designs, develops, and sells conferencing, collaboration, and network streaming solutions for voice and visual communications. On November 9, ClearOne, Inc. (NASDAQ:CLRO) posted earnings for the third quarter of 2023, reporting a revenue of more than $4.8 million.
At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $578 in ClearOne, Inc. (NASDAQ:CLRO), compared to 3 in the previous quarter worth $116,000.
Cybin Inc. (NYSE:CYBN) is a clinical-stage biopharmaceutical company that focuses on developing psychedelic-based therapeutics. On November 20, investment advisory Alliance Global Partners initiated coverage of Cybin Inc. (NYSE:CYBN) stock with a Buy rating and a price target of $6.
At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $10 million in Cybin Inc. (NYSE:CYBN). In the previous quarter, no hedge funds tracked by Insider Monkey held stakes in the firm.
Ideanomics, Inc. (NASDAQ:IDEX) develops zero emission mobility solutions for the off-highway and on-highway commercial vehicle markets. On November 21, Ideanomics, Inc. (NASDAQ: IDEX) posted earnings for the third quarter of 2023, reporting a revenue of more than $0.6 million.
At the end of the third quarter of 2023, 1 hedge fund in the database of Insider Monkey held stakes worth $28,000 in Ideanomics, Inc. (NASDAQ:IDEX). In the previous quarter, no hedge funds tracked by Insider Monkey held stakes in the firm.
Netcapital Inc. (NASDAQ:NCPL) operates as a fintech firm. On December 14, Netcapital Inc. (NASDAQ:NCPL) posted earnings for the second fiscal quarter, reporting earnings per share of $0.04 and a revenue of $2 million, up over 12% compared to the revenue over the same period last year.
At the end of the third quarter of 2023, 2 hedge funds in the database of Insider Monkey held stakes worth $143,000 in Netcapital Inc. (NASDAQ:NCPL), compared to 2 in the previous quarter worth $427,000.
GEE Group Inc. (NYSE:JOB) provides permanent and temporary professional and industrial staffing and placement services. On December 19, GEE Group Inc. (NYSE:JOB) posted earnings for the fourth fiscal quarter, reporting earnings per share of $0.01 and a revenue of more than $34 million.
At the end of the third quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $281,000 in GEE Group Inc. (NYSE:JOB), the same as in the previous quarter worth $148,000.
Unlike pricier options like Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), GEE Group Inc. (NYSE:JOB) is one of the most popular penny stocks on Robinhood.
In its Q3 2023 investor letter, Alluvial Capital Management, an asset management firm, highlighted a few stocks and GEE Group Inc. (NYSE:JOB) was one of them. Here is what the fund said:
“I sold all our shares of GEE Group Inc. (NYSE:JOB) this quarter. In my last letter, I mentioned how GEE Group’s place in our portfolio was dependent on management’s commitment to using the company’s balance sheet cash for the benefit of shareholders. Well, another quarter came and went with zero evidence that management’s promises and assurances were anything but empty words. Despite earlier proclamations of “good things” to come, the company formally dismissed the idea of returning cash to shareholders and again failed to deliver on long-promised profitable acquisitions. I am happy to put our capital to better use elsewhere, and to use our experience with GEE Group as a reminder that a lack of urgency and integrity on the part of company management can negate almost any degree of good economics or valuation.”
