KGC - 3 Cheap Penny Stocks to Buy Before They Bounce Back

2023-07-07 09:16:00 ET

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The Supreme Court recently nullified the Biden administration’s proposed student loan forgiveness program in a 6-3 ruling. Seen as overreaching the authority of the executive branch, this program intended to forgive nearly $430 billion in loans. This heavily political issue also carries major financial consequences, contributing to the emergence of cheap penny stocks .

Economist Bernard Yaros forecasts this ruling might introduce a “modest headwind” for the current economic growth. The program could have assisted approximately 43 million people, enhancing their disposable income and potentially boosting GDP. With the ruling in effect, this economic stimulation now stands blocked. Current predictions suggest a possible 2% decrease in non-essential consumer spending, already suppressed due to the pandemic.

Nevertheless, it’s not all gloomy skies; Biden has put forth an alternate proposal aiming to buffer any adverse effects. As we wait to see this new proposal unfold, let’s explore some cheap penny stocks to invest in, considering these circumstances.

With these facts in mind, here are some cheap penny stocks to buy to take advantage of these headwinds.

Kinross Gold Corporation (KGC)

Kinross Gold Corporation (NYSE: KGC ), a global gold and silver mining company, grew its stock by 33.24% YoY. It outperformed expectations in Q1 with GAAP EPS of $0.07, beating consensus by $0.02. Additionally, revenue surged 32.6% YoY to $929.3 million, providing $1.7 billion in total liquidity.

Looking forward, the company projects to reach 2.1 million ounces by year’s end, building on its Q1 production of 466,000 ounces. Furthermore, a 6.1% CAGR in the global gold market from 2022 to 2030 will likely amplify this growth. A projected 6.8% CAGR in the jewelry market fuels this prediction.

Unique growth catalysts abound for Kinross. One significant driver is the Round Mountain project , which is transitioning from open pit to underground mining. The company expects to begin definition drilling in 2024, enabling it to mine higher-margin ounces over the long term. A preliminary view indicates the potential for high productivity and low cost.

Another promising venture is at Manh Choh, where production is set to commence in the second half of 2024. This project ensures multiple years of high-margin production.

Lastly, 15 analysts reported by Yahoo Finance predict a mean 1-year price target of $6.09 for Kinross, ranging from $3.50 to $7.54. The company’s diverse profile and ongoing growth in mining projects provide a competitive edge, positioning Kinross for future success in the global gold market.

Rocket Lab USA Incorporated (RKLB)

Rocket Lab USA Incorporated (NASDAQ: RKLB ) excels in designing and launching spacecraft, satellite parts, and flight software. It serves various customers from private firms to government entities like NASA and falls into the affordable penny stocks category.

RKLB stock showed robust growth with a 165.2% revenue CAGR last year. In Q1 2023, it posted $54.9 million in revenue, topping estimates by $2 million and surpassing Normalized EPS expectations by $0.02. Moreover, its CAPEX grew 75.10% YoY, demonstrating astute investments in development.

Launching satellites for clients forms the main revenue stream for Rocket Lab. With a stellar record of over 50 successful missions in the last six years, including six this year, the company is a reliable choice. To manage its mission increase, it launched a second site in Wallops Island, Virginia, earlier this year.

Recently, Rocket Lab inked a multi-launch deal with Capella Space for launching a satellite constellation in late 2023. This commitment to enhance space access and foster customer relationships indicates future revenue growth.

With a YTD stock rise of 59.15% and a projected 12-month upside of 58.5% from analysts, Rocket Lab is an enticing investment. Its solid financials, growing missions, multi-launch contracts, and R&D efforts promise a bright future.

Assertio Holdings Incorporated (ASRT)

Assertio Holdings Incorporated (NASDAQ: ASRT ) is a specialized pharmaceutical company focused on marketing treatments for neurology, pain, and central nervous system disorders.

ASRT stock is up 83.73% over the past year, with analysts predicting a 12-month price range of $9 to10$, representing an 84.50% median price increase.

The global pharmaceutical market size was valued at $1,482.4 million in 2021 and is expected to reach $2,067.36 million by 2028 at a 5.70% CAGR . The pharmaceutical industry is projected to experience growth driven by the rising preponderance of chronic diseases such as diabetes, arthritis, and cancer.

Assertio Holdings is poised to establish itself as a significant player in the pharmaceutical industry, evident from its impressive revenue growth of 34.34% YoY , which is substantial in comparison to the sector median—a percent difference of 341.14% from the sector median of 7.78% . The thriving performance of Assertio is further demonstrated by its robust operating cash flow growth of 98.76% YoY , highlighting the company’s success in contrast to the sector median of -7.51% . These remarkable financial indicators indicate Assertio Holdings’ strong potential for growth and success in the pharmaceutical sector.

Assertio has experienced significant growth due to strategic changes implemented by CEO Dan Peisert and the new leadership team. The changes reflect a vision focused on low-cost, data-driven, digital, and non-personal marketing cost savings, revenue increases, and more acquisitions.

For all these reasons and more, Assertio’s impressive financial performance and promising market expansion opportunities positions itself as a cheap and promising investment opportunity in the pharmaceutical sector.

On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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