Based

2024

Penny

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<p class="has-drop-cap">Like altcoins against Bitcoin, <a href="https://tokenist.com/investing/what-are-penny-stocks/" rel="noopener noreferrer nofollow" class="deco-link">penny stocks</a> can offer greater gains than <a href="https://tokenist.com/investing/blue-chip-stocks/" rel="noopener noreferrer nofollow" class="deco-link">blue-chip stocks</a>. Due to their low market cap weight, penny stocks have a low investment barrier to entry and the potential to grow much higher.&nbsp;</p>
<p>But the question is, which ultra-cheap stocks under $5 align with growth trends from which they can benefit?</p>
<h3 id="global-self-storage-inc-nasdaq-self">Global Self Storage, Inc. (NASDAQ: SELF)</h3>
<p>Since the beginning of the Industrial Revolution, a singular trend has been consistent across the global population: urbanization. According to the UN, the percentage of city dwellers should increase to 80% by 2050 from the present 55%.&nbsp;</p>
<p>The urbanization trend infers greater demand for self-storage facilities due to limited space for personal belongings. Additionally, the digital era enables a more mobile lifestyle, leading to a greater need for temporary storage solutions. The downsizing of living spaces from older generations, according to <a aria-label=" (opens in a new tab)" href="https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">NAR</a>, is another self storage demand pressure.</p>
<p>Per Mordor Intelligence report, the self-storage market size should reach $72.15 billion by 2029 from the present $58.26 billion, growing at a CAGR of 4.37%. As a real estate investment trust (REIT), Global Self Storage provides such services for commercial and residential needs.&nbsp;</p>
<p>At 6.68% dividend yield and annual dividend payout of $0.29 per share, SELF has had a steady payout growth since 2016. As of the latest <a aria-label=" (opens in a new tab)" href="https://ir.globalselfstorage.us/news-events/press-releases/detail/145/global-self-storage-reports-third-quarter-2023-results" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Q3 2023 earnings report</a>, SELF delivered a 3.7% increase in total revenue of $9.2 million going back nine months. During that period, funds from operations (FFO) decreased by 5.4%.</p>
<p>Compared to Q2, the company’s same-store occupancy remained largely flat (89.8% – 90.4%), as did the same-store average tenant duration, which remained at 3.3 years. Earnings per share decreased from $0.08 in a year-ago quarter to $0.02 in Q3. At a present price of $4.33 per SELF share, the company offers a cheap entry into the REIT dividend payout stream.&nbsp;</p>
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<h3 id="compass-inc-nasdaq-comp">Compass, Inc. (NASDAQ: COMP)</h3>
<p>Over the last three months, COMP shares went up 101%. The real estate brokerage provides residential real estate agents an end-to-end service, including cloud-based software, marketing, and customer relationship management. In the latest <a aria-label=" (opens in a new tab)" href="https://investors.compass.com/financials/quarterly-results/default.aspx" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Q3 2023 earnings</a>, Compass agents completed 12% fewer transactions from a year-ago quarter.</p>
<p>Likewise, the company suffered an 11% gross transaction value (GTV) decline, delivering a 10% year-over-year revenue decrease and a net loss of $39 million. However, this is a significant improvement from the net loss of $154 million from a year-ago quarter. Despite the worsening of the market, Compass achieved positive free cash flow for the second quarter in a row.&nbsp;</p>
<p>In numbers, that means a $235 million free cash flow improvement for the first nine months of 2023 despite a revenue decline of $1.1 billion. With lower costs and better agent retention, Q4 2023 outlook forecasts adjusted EBITDA of negative $35 million to negative $20 million.</p>
<p>Based on nine analyst inputs pulled by Nasdaq, COMP stock is a “buy.” The average COMP price target is $4.23 vs the current $3.95. The high estimate is $5, while the low forecast is $2.7 per share.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<h3 id="rackspace-technology-inc-nasdaq-rxt">Rackspace Technology, Inc. (NASDAQ: RXT)</h3>
<p>Over the last three months, RXT shares are up 48%. The multi-cloud company provides end-to-end cloud solutions agnostic to technology stacks in place, making it a cost-saving measure for businesses.&nbsp;</p>
<p>However, Rackspace reported a 7% year-over-year revenue decline in Q3 2023 earnings, at $732 million. The company cut its net loss significantly from a year-ago quarter, from $512 million to $227 million. With cash and cash equivalents of $278 million, Rackspace picked a new executive board member on February 8th.&nbsp;</p>
<p>Following Thomas Cole’s unexpected death, Mark Gross, a 25-year veteran of grocery wholesalers, banking, and retail technology systems, will replace him. The news boosted RXT stock by 23% over the week.&nbsp;</p>
<p>Based on eight analyst inputs pulled by Nasdaq, RXT stock is a “hold.” The average RXT price target is $1.25 vs the current $1.89. The high estimate is $1.5, while the low forecast is $1. With a newly launched AI Anywhere offering private cloud solutions in January, it is yet to be shown if the company’s leadership change will turn the boat.</p>
<p>The company first shifted focus from competing against AWS to designing app environments. The latest shift to generative AI, by collaborating with <a aria-label=" (opens in a new tab)" href="https://ir.rackspace.com/news-releases/news-release-details/rackspace-launches-hosted-private-cloud-generative-ai-solution" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Nvidia and Dell</a>, could be the winning ticket for renewed growth.&nbsp;</p>
<p><strong><em>Have you had penny stock turnarounds before? Let us know in the comments below.</em></strong></p>
<p><em>Disclaimer: The author does not hold or have a position in any securities/assets discussed in the article.</em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/three-penny-stocks-to-look-into-in-february-2024/">Three Penny Stocks to Look Into in February 2024</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Three Penny Stocks to Look Into in February 2024

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