Penny stocks generally slip under the radar in conversations around the stock market despite the fact that they have come to command great bearing on the overall dynamics in the finance world. Retail investors, who are pouring hundreds of billions of dollars into equities, generally favor investing in cheap but risky options, a profile that fits penny firms very well. According to industry regulator FIRNA, in February, at the height of the retail investor frenzy at the market, there were 1.9 trillion transactions on the over-the-counter markets, up 2,000% year-on-year.
These markets generally trade in penny stocks. The explosive growth was facilitated by trading applications like Robinhood. Millions of users now have registered accounts with these brokerages. There has also been an increase in the average daily trading volume, attesting to the greater influence of retail investors and penny stocks on the overall market. Business news publication CNBC reported earlier this year that the average daily volume of the market stood at over 14 billion in January this year, up from 7 billion in 2019.
Retail investors often use the Reddit platform to exchange investment ideas. Reddit threads have been choked with discussions related to penny stocks. There are also threads filled with mentions of more expensive and disruptive firms. Some of the stocks presently popular on Reddit include Apple Inc. (NASDAQ: AAPL), Advanced Micro Devices, Inc. (NASDAQ: AMD), Tesla, Inc. (NASDAQ: TSLA), Alibaba Group Holding Limited (NYSE: BABA), and NVIDIA Corporation (NASDAQ: NVDA), among others.
The increased interest in penny stocks has also led to concerns about the rise in pump and dump schemes. In a pump and dump scheme, promoters, who can easily push a stock on investors through blatant manipulation of news on social media, quietly buy the stock and sell it to unsuspecting investors. Since the stock is devoid of any basic business fundamentals, it quickly drops in value, resulting in almost instant losses. It would not be an exaggeration to state that these new market forces are fast transforming the world of finance.
Penny Stocks with Upcoming Growth Catalysts
10. Kontrol Technologies Corp. (NEO: KNR.NE)
Number of Hedge Fund Holders: N/A
Kontrol Technologies Corp. (NEO: KNR.NE) is placed tenth on our list of 10 penny stocks with upcoming growth catalysts. The company provides energy efficiency solutions to commercial consumers and is headquartered in Canada.
Kontrol Technologies Corp. (NEO: KNR.NE) has projected solid growth in the coming months on the back of increasing popularity of Kontrol BioCloud, a real time air quality monitoring and aerosol detection device that has already attracted a lot of enterprise interest. The device can detect COVID at a low particulate level, allowing evacuations in tight spaces before infection.
Kontrol Technologies Corp. (NEO: KNR.NE) has reportedly signed distribution agreements for the new product with Marshall Communications and Steelcase. The firm has said it will produce 20,000 units of the product per month, which, at a price of $12,000 per unit, could equate to $240 million in revenue every thirty days.
9. Patient Access Solutions, Inc. (OTC: PASO)
Number of Hedge Fund Holders: N/A
Patient Access Solutions, Inc. (OTC: PASO) is ranked ninth on our list of 10 penny stocks with upcoming growth catalysts. The firm markets healthcare and financial processing solutions, mostly for the dental industry. It operates from New York.
Patient Access Solutions, Inc. (OTC: PASO) recently announced that it had completed the acquisition of Tela Mental Health, a firm that provides telephonic consultation, online therapy, and referral services for mental health problems.
Patient Access Solutions, Inc. (OTC: PASO) is expected to benefit from the purchase in the coming weeks as it plans to achieve more than 10,000 participants over a period of six months and grow gradually.
8. PowerBand Solutions Inc. (OTC: PWWBF)
Number of Hedge Fund Holders: N/A
PowerBand Solutions Inc. (OTC: PWWBF) is a Canada-based technology firm that provides software and financing services. It is placed eighth on our list of 10 penny stocks with upcoming growth catalysts.
Led by growing lease originations, PowerBand Solutions Inc. (OTC: PWWBF) has recorded a surge in revenue over the past few weeks, reporting a 56% month-on-month increase in revenue at the end of August with a gross margin of 50%.
PowerBand Solutions Inc. (OTC: PWWBF) is expected to continue on this growth trajectory as it adds more dealers to its network. Kelly Jennings, the CEO of the firm, said last month that the market was only waking up to the significant synergies the firm had developed across business segments.
7. Reliq Health Technologies Inc. (TSX: RHT.V)
Number of Hedge Fund Holders: N/A
Reliq Health Technologies Inc. (TSX: RHT.V) is a Canada-based firm that markets healthcare technology solutions and mobile software services. It is ranked seventh on our list of 10 penny stocks with upcoming growth catalysts.
Reliq Health Technologies Inc. (TSX: RHT.V) will likely post the first ever profit in the earnings report due at the end of the third quarter of 2021, according to Lisa Crossley, the CEO of the company. It also expects to enroll 4,000 new chronic disease patients to a remote-monitoring patient platform this year.
Since chronic diseases account for 70 to 80% of US healthcare spending, Reliq Health Technologies Inc. (TSX: RHT.V) stands to benefit from the program in the long run. It has also recently announced the addition of HIV care services to its iUGO care platform.
6. Hydro Power Technologies Inc. (OTC: PYBX)
Number of Hedge Fund Holders: N/A
Hydro Power Technologies Inc. (OTC: PYBX) is placed sixth on our list of 10 penny stocks with upcoming growth catalysts. The firm provides renewable energy solutions to business clients and is headquartered in Canada.
Hydro Power Technologies Inc. (OTC: PYBX) recently revealed that it had signed a joint venture agreement with Middle East Solutions and Technologies for Energy and Environment, a Lebanese renewable energy firm, for three solar projects for the Lebanon government.
The projects will be completed between 2021 and 2026 and are expected to give the share price of Hydro Power Technologies Inc. (OTC: PYBX) a boost in the coming months. Michael Shamber, the president of the Canadian firm, has said he is “very pleased” with the agreement.
5. Adhera Therapeutics, Inc. (OTC: ATRX)
Number of Hedge Fund Holders: N/A
Adhera Therapeutics, Inc. (OTC: ATRX) is ranked fifth on our list of 10 penny stocks with upcoming growth catalysts. The company operates from Louisiana and engages in the marketing of biopharmaceutical products.
Adhera Therapeutics, Inc. (OTC: ATRX) recently announced that it had signed an exclusive license agreement with Melior Pharmaceuticals, a Pennsylvania-based drug firm, for MLR-1023. The agreement will allow the firm to develop a novel therapeutic for Type 1 diabetes.
Earlier this month, Adhera Therapeutics, Inc. (OTC: ATRX) announced the appointment of Andrew Reaume to the Board of Directors at the firm. Reaume, a former top executive at drug giant Pfizer and Cephalon, brings a wealth of experience to the company.
4. Creatd, Inc. (NASDAQ: CRTD)
Number of Hedge Fund Holders: 1
Creatd, Inc. (NASDAQ: CRTD) is a New Jersey-based technology company focusing on the development of digital communities. It is placed fourth on our list of 10 penny stocks with upcoming growth catalysts.
Creatd, Inc. (NASDAQ: CRTD) has several growth catalysts that are expected to drive the share price in the coming months. The company has an expanding user base, growing revenue, it recently paid back a lot of debt, and was also able to raise capital.
At the end of the second quarter of 2021, 1 hedge fund in the database of Insider Monkey held stakes worth $62,000 in Creatd, Inc. (NASDAQ: CRTD), down from 2 in the previous quarter worth $172,000.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Two Sigma Advisors is a leading shareholder in Creatd, Inc. (NASDAQ: CRTD) with 16,600 shares worth more than $62,000.
3. AzurRx BioPharma, Inc. (NASDAQ: AZRX)
Number of Hedge Fund Holders: 4
AzurRx BioPharma, Inc. (NASDAQ: AZRX) is a Florida-based biopharmaceutical company that concentrates on the development of recombinant proteins for the treatment of gastrointestinal diseases. It is ranked third on our list of 10 penny stocks with upcoming growth catalysts.
Earlier this week, AzurRx BioPharma, Inc. (NASDAQ: AZRX) announced that it had agreed to purchase First Wave Bio, a Michigan-based biopharma firm, in a deal worth $229 million. The company will rebrand as First Wave BioPharma and debut on the market in late September.
At the end of the second quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $359,000 in AzurRx BioPharma, Inc. (NASDAQ: AZRX), up from 2 in the preceding quarter worth $143,000.
2. TRACON Pharmaceuticals, Inc. (NASDAQ: TCON)
Number of Hedge Fund Holders: 6
TRACON Pharmaceuticals, Inc. (NASDAQ: TCON) is placed second on our list of 10 penny stocks with upcoming growth catalysts. The firm develops and sells biopharmaceutical products and is headquartered in California.
TRACON Pharmaceuticals, Inc. (NASDAQ: TCON) is slated to present a corporate review at the HC Wainwright 23rd Annual Global Investment Conference, boosting the profile of the firm to investors from around the world by offering a detailed look at the drugs pipeline.
Out of the hedge funds being tracked by Insider Monkey, Texas-based investment firm Ikarian Capital is a leading shareholder in TRACON Pharmaceuticals, Inc. (NASDAQ: TCON) with 2.7 million shares worth more than $17 million.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $37 million in TRACON Pharmaceuticals, Inc. (NASDAQ: TCON), the same as in the preceding quarter worth $48 million.
1. Outlook Therapeutics, Inc. (NASDAQ: OTLK)
Number of Hedge Fund Holders: 7
Outlook Therapeutics, Inc. (NASDAQ: OTLK) is ranked first on our list of 10 penny stocks with upcoming growth catalysts. The firm concentrates on the development of monoclonal antibodies for various ophthalmic indications. It is headquartered in New Jersey.
Outlook Therapeutics, Inc. (NASDAQ: OTLK) recently announced results from ONS-5010, a treatment for neovascular age-related macular degeneration, saying it had met the main and secondary goals in a late-stage study.
At the end of the second quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $2.3 million in Outlook Therapeutics, Inc. (NASDAQ: OTLK).
