5 US penny stocks to buy now for short-term gains

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on Apr 22, 2024
Updated: Apr 30, 2024
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  • Penny stocks are often seen as more attractive investments among day traders.
  • They are often riskier assets than big cap companies like Microsoft and Berkshire Hathaway.
  • We uncover some of the top companies like GoPro, EVgo, NYCB, and QuantumScape.

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Penny stocks are among the most popular assets among day traders because of their substantially lower prices compared to big companies like Berkshire Hathaway and Amazon. They are also high-risk investments, as evidenced by the performance of Fisker and Bit Brother. So, here are some penny stocks to buy for short-term gains.

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GoPro

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GoPro (NASDAQ: GPRO) has become one of the biggest fallen angels in the US. Once valued at over $2 billion, it is now a penny stock with a market cap of less than $60 million.

As I wrote in this report, the company’s key challenge is that it is a one-product firm. It specialises on its action cameras and its attempt to diversify into the drone space failed. 

Once a person buys a GoPro camera, chances are that they will take a few years to buy another one. Also, new cameras tend to have similar appearance and functionalities, removing the incentive for people to replace their old devices.

Still, GoPro stock is a good buy for now because it is highly oversold, as shown below. The Relative Strength Index (RSI) has moved to the extreme oversold level of 20 while the Stochastic Oscillator has moved to the negative zone. Therefore, a short-term rebound cannot be ruled out ahead of its earnings.

GoPro stock

GPRO chart by TradingView

EVgo

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EVgo (NASDAQ: EVGO) stock price has also crashed hard in the past few years. It has moved from its all-time high of $24.25 in 2021 to $1.70. Most recently, the stock has dropped for four straight weeks and is now at its lowest level on record.

EVgo shares have crashed because of the ongoing concerns about the electric vehicle industry, which is slowing dramatically. As a result, companies like Tesla and Ford have resulted to cutting prices in a bid to attract more customers.

EVGo’s price action is in line with that of other EV charging companies like ChargePoint and Blink Charging. Still, the company is doing modestly well with its revenue surging. Its annual revenue rose from $54 million in 2022 to $161 million in 2023. 

Its fourth-quarter revenue rose to over $50 million, up from $27.3 million that it made in Q4’22. While its loss almost doubled, the company has a plan to reduce it as it moves from growth to profitability.

Eventbrite

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Eventbrite (NYSE: EB) is another penny stock to buy. It is a leading American company that provides ticketing and events services globally. Using its platform, anyone can create events, market them, and handle the ticketing process easily.

Eventbrite stock price has collapsed hard in the past few years even as the number of events has jumped sharply. It crashed from a record high of $40 in 2019 to about $5. This retreat happened as the company faced substantial competition and its revenue growth slowed.

Eventbrite’s business is still growing, albeit at a slower rate than it did before. Its revenue rose to $87.8 million in the fourth-quarter from $47.3 million a year earlier. However, it moved from a small profit of $4 million to a $0.9 million loss.

Eventbrite stock is also highly oversold, with the Relative Strength Index (RSI) and the Stochastic Oscillator falling to 30 and below 20, respectively.

Eventbrite stock

New York Community Bank

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New York Community Bank (NYSE: NYCB) is another penny stock to consider. The company’s shares collapsed to a low of $1.67 earlier this year as investors worried about its exposure to the commercial real estate industry. Its plunge sent memories of the collapse of other US banks like Signature and Silicon Valley Bank in 2023.

NYCB is still a risky bank but there are signs that it will do well in the long term. For one, unlike companies like First Republic, over 80% of its deposits are insured by the FDIC. Also, the firm received a $1 billion investment from Steven Mnuchin. As such, I believe that the company could stage a comeback in the next few months.

QuantumScape

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QuantumScape (NASDAQ: QS) stock price has been in a strong downtrend in the past few years. It plunged from its all-time high of $132.16 in 2021 to about $5. In this period, its market cap plunged from a high of $29 billion to less than $3 billion today.

Still, the company is in a good shape as it seeks to disrupt the EV battery industry. It has a solid balance sheet with over $1 billion in cash and short-term investments.

Also, it has a partnership with Volkswagen and other large OEMs. Earlier this year, QuantumScape unveiled testing results that showed that its battery could charge to 80% in less than 15 minutes. It can also go for 1,000 charging cycles, enough to take a vehicle for over 500k miles. Therefore, there is a likelihood that the stock will bounce back.

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