CRON - 3 Penny Stocks That Will Blast Higher on Meme Euphoria
2024-06-05 07:00:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The meme stock euphoria of 2021 created immense wealth for retail investors. Of course, the key was to enter potential meme stocks at the right time. Buying at the peak of the euphoria resulted in wealth destruction. With early signs of another frenzy, it’s a good time to consider exposure to meme penny stocks that have not witnessed a big move.
I had said in the past and I maintain my view that multiple rate cuts are due in the next 12 months. Further, the first-rate cut is likely before the Presidential elections. This is a potential catalyst for speculation in equities and a big meme rally.
While I expect speculative activity to rise, I am cautious on choosing the penny stocks to buy. I would stay away from ideas that represent weak business fundamentals. Therefore, the penny stocks discussed have reasonable fundamentals and few catalysts that can support the rally.
Let’s discuss the reasons to be bullish on these meme penny stocks.
Cronos Group (CRON)
Cronos Group (NASDAQ: CRON ) stock has trended higher by 20% for year-to-date. However, I wouldn’t be surprised if the stock doubles or triples within six months on meme euphoria.
Speculative rally aside, I am bullish on Cronos for multiple reasons. First, the stock is undervalued with the cannabis company holding a cash buffer of $855 million.
Further, there is likely to be multiple news on the regulatory front related to cannabis. The most imminent is the reclassification of cannabis as a Schedule III drug.
I must add that an overwhelming majority of Americans support the federal level legalization of cannabis. That’s likely to be a key point to debate in the upcoming Presidential elections.
Coming back to Cronos Group, geographic expansion is a key reason to believe that revenue growth will accelerate. In the last six months, the company has entered new geographies of Germany, Australia and the U.K. Therefore, with multiple catalysts, CRON stock is likely to go ballistic on meme euphoria.
Nio (NIO)
During the meme euphoria of 2021, Nio (NYSE: NIO ) stock traded above $60. It’s been a meltdown from those levels with the Chinese EV maker’s stock trading just above $5. Without doubt, there have been negative factors on the business front like slowing deliveries growth and a high level of cash burn.
However, NIO stock seems deeply oversold, and I would bet on a sharp rally from current levels. There are some positives to note from a business perspective. First, Nio delivered 30,053 vehicles for Q1 of 2024 as compared to a guidance of 30,000. With enhanced features, the 2024 version of ES7, ET7 and ET5 was launched in Q2 of 2024 and will have a positive impact on deliveries growth in the coming quarters.
Further, Nio received a capital infusion of $2.2 billion for CYVN in December 2023. The focus has been on cutting cost and minimizing the cash burn. With Q1 of 2024 numbers due, narrowing of operating level losses can translate into a significant rally.
Archer Aviation (ACHR)
Archer Aviation (NYSE: ACHR ) stock has corrected sharply by 46% year-to-date ( YTD ). It’s a good time to accumulate this flying car stock with multibagger returns potential. Notably, ACHR is among the early-movers in an industry that’s at a nascent stage. If the business execution is good, the stock is a potential millionaire-maker.
For now, there are multiple catalysts that can trigger a big rally. First, the flying car company is on-track to commercialize operations in the U.S. next year. Further, Archer Aviation has stitched local partnerships in UAE and India for expansion in the next 24 months.
Recently, the company partnered with KakaoMobility for commercialization of eVTOL in the country. The key point is that Archer is already pursuing aggressive geographic expansion. This will translate into stellar growth in the next few years. Therefore, with positive business developments and with a swelling order backlog, ACHR stock is poised to skyrocket.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Faisal Humayun did not hold (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 .
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
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