In general, investors look at penny stocks for trading and speculation. Quick gains are an opportunity for exit and entry into another potentially speculative name. However, not all penny stocks are purely speculative or solely for short term trades. I see some millionaire-maker penny stocks that are worth buying and holding for the long term.
It’s important to note that these millionaire-maker penny stocks represent companies that are at an early growth stage. These companies have ambitious plans and if the execution is good, sky is the limit for the stock.
Of course, these stocks have high-risk and portfolio exposure must be restricted. However, even a limited exposure of 15% can change the shape of the portfolio.
This column discusses seven millionaire-maker penny stocks that represents companies with good fundamentals. While it’s important to carefully monitor business developments, these stocks are worth holding for the next five years for millionaire-maker potential.
Bitfarms (BITF)
Bitcoin and crypto mining farm. Big data center. High tech server computers at work. Bitfarms (BITF) mines crypto.
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With Bitcoin (BTC-USD) surging past $50,000, it’s difficult to ignore crypto stocks.
Further, with Bitcoin halving due, it’s likely that the momentum for the cryptocurrency will sustain. The long-term outlook is equally promising with Cathie Wood expecting Bitcoin to touch $1.5 million by 2030.
I am therefore bullish on multi-bagger returns for some of the best Bitcoin mining stocks.
Bitfarms (NASDAQ:BITF) is an attractive bet among potential millionaire-maker penny stocks. Besides the tailwinds in the form of Bitcoin surging higher, the company has a strong balance sheet and aggressive growth plans.
As of January, Bitfarms reported hash rate capacity of 6.5EH/s. By the end of the year, the company is targeting capacity of 21EH/s.
This will translate into stellar revenue and cash flow upside. I must add here that Bitfarms has a debt-free balance sheet with a liquidity buffer of $118 million as of December 2023. Therefore, there is ample financial flexibility for investment in expansion.
Tilray Brands (TLRY)
Tilray (TLRY) logo on a web browser.
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Tilray Brands (NASDAQ:TLRY) is another name among millionaire-maker penny stocks.
After an extended period of downturn for cannabis stocks, I am bullish on the sector for the coming years. Assuming that cannabis is legalized at the federal level, TLRY stock can be an easy 10-bagger in the next 24 months.
I must add that even without legalization, the U.S. cannabis market is likely to be worth $71 billion by 2030. Further, the European medicinal cannabis market is likely to be big in the coming years. Therefore, there is ample headroom for growth and value creation.
Tilray Brands was focused on diversification in 2023. The company is now the fifth largest craft beer brewer in the U.S. because of acquisitions.
The acquisitions have improved the company’s strategic infrastructure in the country, in addition to diversifying its operations. This will enable aggressive expansion if cannabis is legalized at the federal level.
For Q2 2024, Tilray reported record net revenue and a year-on-year growth of 34%. Further, the company has also guided for positive adjusted free cash flow in the current financial year. With all these positives, TLRY stock is likely to go ballistic.
Lithium Americas (LAC)
Person holding smartphone with logo of Canadian company Lithium Americas Corp (LAC) on screen in front of website Focus on phone display.
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Lithium stocks have been depressed and looks undervalued after a big correction. It’s likely that lithium price recovery will be gradual. However, the long-term outlook is positive with a significant impending supply-gap.
It’s therefore a good time to invest in some of the best lithium stocks with millionaire-maker potential. Lithium Americas (NYSE:LAC) looks attractive at a current market valuation of $743 million. I would bet on 10x to 20x returns for this stock in the next five years.
For Lithium Americas, the Thacker Pass project is a value creator. The asset has a mine life of 40-years with the company expecting an average annual EBITDA of $1.1 billion. With an after-tax net present value of $5.7 billion, the deep valuation gap is clear.
The Thacker Pass project funding seems secure with General Motors (NYSE:GM) committing to invest $650 million in two tranches. GM also has an offtake agreement for 10 years from phase one of production.
Blink Charging (BLNK)
a blink charging station, BLNK stock
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Blink Charging (NASDAQ:BLNK) is among the few emerging names in the EV charging industry that’s likely to create massive value. An important point to note is that investments in charging infrastructure needs to accelerate to achieve the target of 30–42 million EVs on U.S. roads. Therefore, there is ample scope for growth through the decade.
Specific to Blink Charging, the revenue growth trajectory has been stellar. For Q3 2023, the company reported revenue growth of 152% on a year-on-year basis to $43.4 million.
Recently, the company announced preliminary numbers for Q4 2023 and it has exceeded the guidance. Blink expects full-year revenue to surpass $140 million. The company has reaffirmed the guidance for positive Adjusted EBITDA run rate by December 2024.
Considering the revenue growth trajectory, it’s likely that EBITDA margin expansion will be significant in the next 24 to 36 months. A sustained increase in service revenue will also support margin expansion. Overall, the worst seems to be over for BLNK stock and I expect multi-bagger returns from current levels.
Yatra Online (YTRA)
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Yatra Online (NASDAQ:YTRA) is an online travel company with a focus on the Indian markets. The company is a provider of air ticketing, hotel packages, and related services.
With a big addressable market in an emerging economy, I am bullish on YTRA stock creating immense value.
The company has differentiated itself from competition to emerge as the largest corporate travel player in India. Yatra has a customer base of 800 corporates with an addressable employee base of more than seven million.
Yatra is also scaling-up its business-to-consumer segment. In terms of consumer brand awareness, Yatra is only behind MakeMyTrip (NASDAQ:MMYT) in India. With the economy growing at a healthy pace and with a swelling middle-class, there is ample scope for growth.
For Q3 2024, Yatra reported 23% year-on-year growth in revenue to $13.4 million. For the same period, the company achieved positive adjusted EBITDA. With a robust growth outlook, I expect meaningful EBITDA margin expansion in the coming quarters.
Blade Air Mobility (BLDE)
The Blade Air Mobility (BLDE) logo displayed on a smartphone screen.
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Blade Air Mobility (NASDAQ:BLDE) stock is among the under-the-radar penny stocks that seems poised for multibagger returns.
The company is a provider of air transport alternatives to congested ground routes in the United States. These services are provided through charter flights, helicopters, and seaplanes. However, Blade Air has an asset-light business model.
The company is on a high-growth trajectory. For Q3 2023, Blade Air reported 56% growth in revenue on a year-on-year basis to $71.4 million. It was also the first quarter where the company reported positive adjusted EBITDA and free cash flows.
Besides providing air transport to customers, Blade Air is also involved in the transportation of human organs for transplant in the United States. The company recently launched its new organ matching service.
With cost efficiencies coupled with a focus on the organ transportation segment, the company expects “significant year-over-year improvement in Adjusted EBITDA.” As margin expands in the coming quarters coupled with strong revenue growth, I expect BLDE stock to surge higher.
IAMGOLD (IAG)
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I am bullish on gold considering the factors of geopolitical tensions, inflation, and the likelihood of expansionary monetary policies. Among penny gold mining stocks, IAMGOLD (NYSE:IAG) stock looks attractive and is poised for multi-bagger returns.
An important catalyst for IAMGOLD in 2024 and beyond is the commencement of production from the Cote gold mine. For 2023, the company reported attributable gold production from continuing operations of 465,000 ounces.
Excluding Cote, IAMGOLD has guided for attributable gold production (mid-range) of 460,000 ounces this year. However, if Cote production is included, the attributable production for the year is likely to increase to 715,000 ounces.
Clearly, IAMGOLD is positioned for stellar production growth. If this is associated with higher realized gold price, I expect a strong jump in revenue, EBITDA, and free cash flows. I must add that IAMGOLD has a strong liquidity buffer of $755 million as of December 2023.
With visibility for healthy cash flows, financial flexibility remains high for aggressive exploration activity and potential acquisitions.
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.
