As I talk about the penny stocks for the next decade, the following point is worth mentioning. In the 1950s, the holding period of stocks was around eight years. There has been a phenomenal change over the decades with the average holding period as of June 2020 declining to 5.5 months.
One factor behind this change is a dynamic world in terms of technological advancement. Investment themes therefore change relatively quick. However, another big reason is the loss of patience to buy and hold. Investors are seeking quick returns and when they come, profit is booked.
However, if the ambition is to create millions from the market, the holding period must be more than five years. It’s relatively easy to hold blue-chip stocks for five years or more. However, the same is not true for penny stocks. It’s largely viewed as a trading or speculative bet.
That’s not always true. There are penny stocks for the next decade that represent promising companies with positive industry tailwinds. If business developments remain good, these penny stocks can be massive value creators.
Let’s discuss seven penny stocks to buy and hold for the next decade.
Archer Aviation (ACHR)
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The market for flying cars is likely to witness stellar growth in the coming decades. To put things into perspective, the market size is expected to hit $1 trillion in 2040 and $9 trillion by 2050. Clearly, companies are in a nascent stage and there can be billion-dollar entities in the next decade. Archer Aviation (NYSE:ACHR) is one stock that looks promising and can deliver multibagger returns.
Archer Aviation is on-track for commercialization of eVTOL aircraft in the United States in 2025. The progress has been smooth in relation to the certifications from the U.S. Federal Aviation Authority.
It’s also worth noting that business developments have been encouraging. The Company already has an indicative order book that’s worth $3.5 billion. The backlog is from the United States, UAE, and India. Therefore, Archer is already spreading its wings globally.
The Company has also guided for completion of the manufacturing facility this year. The annual eVTOL production will be 650. This sets stage for revenue recognition in 2025 and beyond.
Standard Lithium (SLI)
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The big correction in lithium has translated into deep undervaluation for lithium stocks. I believe that this is a good opportunity to accumulate for the long term. Standard Lithium (NYSE:SLI) looks attractive among penny stocks with a correction of almost 70% in the last 12 months.
It’s worth noting that the Company currently commands a market valuation of $210 million. As compared to this, Standard Lithium’s key asset (South West Arkansas Project) has an after-tax net present value of $4.5 billion. If other assets are included, the NPV will be more than $5 billion. This puts into perspective the extent of undervaluation.
Of course, these assets make sense only when commercialized. I am optimistic on the financing front once the trend for lithium reverses. The Company has already advanced the South West Arkansas Project with the selection of selection of Ausenco Engineering Canada for definitive feasibility study and front-end engineering and design services.
Cronos Group (CRON)
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Among cannabis penny stocks for the next decade, Cronos Group (NASDAQ:CRON) looks attractive. CRON stock has been sideways in the last 12 months and I believe that a breakout on the upside is likely after consolidation.
Further, regulatory headwinds can potentially wane in Europe and the United States. Germany has already legalized recreational cannabis and other European countries might follow suit. I must mention that even without legalization, the U.S. cannabis market is expected to swell to $71 billion by 2030. The growth in medicinal cannabis adds to the attractiveness of the industry.
A key reason to like Cronos is the financial flexibility. As of Q4 2023, Cronos reported cash and equivalents of $862 million. That’s higher than the Company’s current market valuation. A strong cash buffer provides flexibility for organic and acquisition driven growth. Cronos has also guided for net change in cash to be positive this year.
I also like the fact that the Company is expanding presence in the medicinal cannabis market. In Germany, the Company is supplying to Cansativa GmbH, a leading medical cannabis distributor. The Company has commenced shipments to Vitura Health Limited for the Australian cannabis market.
Blink Charging (BLNK)
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It’s estimated that an investment of $31 to $55 billion will be required in the U.S. by 2030 towards EV charging infrastructure. For Europe, an investment of 40 billion euros is estimated towards public EV charging infrastructure. Clearly, the addressable market is significant and it implies healthy growth for some of the best EV charging companies.
Blink Charging (NASDAQ:BLNK) is an attractive name among emerging players. BLNK stock has stabilized in the last few months after a big correction. With positive business news, I am optimistic on a strong reversal from current levels.
Specific to Blink, there are two reasons to be positive. First, the Company is on a stellar growth trajectory. For Q3 2023, revenue growth was 152% on a year-on-year basis to $43.4 million. The Company has also exceeded its full year revenue guidance. Considering the addressable market, I expect this growth momentum to sustain.
Further, Blink Charging was depressed primarily due to cash burn. However, the Company has guided for positive adjusted EBITDA by December 2024. It’s likely that EBITDA margin expansion will sustain in the coming years. This is likely to be a big catalyst for BLNK stock trending higher.
Ring Energy (REI)
Oil. 3D Illustration. Oil stocks are up.
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While there is significant focus on green energy themes, I believe that oil and gas stocks will continue to create value. The shift towards renewable energy will be gradual in the coming decades. Ring Energy (NYSE:REI) is an undervalued penny stock to buy from the oil and gas sector.
As an overview, Ring Energy has operational focused on the Permian Basin. The Company reported proved reserves of 138.1MMboe with proved developed reserves of 65%. It’s worth noting that the Company’s PV10 (present value of estimated future oil and gas revenues at 10% discount rate) is $2.77 billion. Currently, Ring Energy has a market valuation of $273 million. This is indicative of the level of undervaluation.
Another point to note is that Ring Energy has continued to deleverage. As of Q3 2023, the Company reported leverage of 1.69. Possible expansionary policy in the second half of 2024 is likely to translate into higher oil price. With possibility of cash flow upside, Ring Energy will be positioned to accelerate deleveraging. Improvement in credit metrics will boost REI stock.
Solid Power (SLDP)
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For year-to-date 2023, Solid Power (NASDAQ:SLDP) stock has remained sideways. The stock seems to be in a consolidation phase after a big correction. With positive business news, I believe that SLDP stock is poised for a big reversal rally.
As an overview, Solid Power is working towards the commercialization of solid-state batteries. The Company’s ambitions are backed by automotive majors that include BMW (OTCMKTS:BMWYY) and Ford (NYSE:F). Solid Power has also deepened its partnership with SK On for R&D and expansion in Korea.
In terms of business progress, Solid Power delivered A-1 Sample cells in October 2023 to enter the automotive qualification process. The Company is targeting to focus on A-2 Sample cells this year.
With $415 million in cash and equivalents, Solid Power has high financial flexibility to continue investing in R&D. At the same time, the Company has licensed its technology and manufacturing process to BMW for parallel research and development. Assuming that the Company commercializes solid-state batteries, 20x to 30x returns from current levels would not be a steep target.
Aker Carbon Capture (AKCCF)
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As a carbon capture company providing products, services, and technology, Aker Carbon Capture (OTCMKTS:AKCCF) is an attractive investment. The focus on global decarbonisation is likely to last for the coming decades.
This makes Aker Carbon attractive with a proven technology and an early-mover advantage. The Company already has 60,000 operating hours of proprietary patented technology use and has delivered seven carbon capture units.
It’s worth noting that Aker Carbon has a strong order backlog of 2.6 billion Norwegian krone. The Company is targeting to capture 10 million tons of CO2 per annum by 2025. This will imply healthy revenue growth. As revenue growth accelerates with robust order intake, I expect AKCCF stock to trend higher.
Recently, Aker was awarded a milestone project in the United States. It’s estimates that the U.S. market will reach a total volume of 200 million tons of CO2 by 2030. Therefore, the market is big and Aker has made inroads. This makes it one of those penny stocks for the next decade.
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.
