A Penny Stock That Will Make You a Millionaire

We recently compiled a list of the 11 Penny Stocks That Will Make You a Millionaire. In this article, we take a look at how Lantern Pharma Inc. (NASDAQ:LTRN) compares to other penny stocks.

Why should you invest in penny stocks?

Penny stocks are often overlooked by most investors. They are the smallest of the small companies operating in the market, and as such, they typically miss out on the detailed coverage of financial reporters and analysts. However, because of this conundrum, many penny stocks become excellent, under-the-radar investments for those investors who don’t mind a little risk. This is especially true for penny stocks operating in the artificial intelligence sector today. However, this isn’t to say that penny stocks are always a surefire way to make big profits. Because these stocks are from companies that are incredibly small compared to the usual players we hear about in the market news, they are also incredibly risky to invest in – as such, investing in penny stocks is a move that only investors with a tolerance for high-risk, high-return strategies should make.

In the current market landscape, there may be more room to consider investing in smaller companies. This is due to the potential rate cut by the Fed in September. Financial professionals see this potential cut as a catalyst for growth in smaller companies in the market, which have been largely ignored for the past two years due to the Fed’s strict policy. Therefore, a rate cut in September could actually lead to an overall growth cycle for smaller players in the market.

Also read: 7 Most Popular AI Penny Stocks Under $5 and 10 Best Technology Penny Stocks to Invest In Now.

How is the market reacting to smaller stocks today?

On August 21, Tom Lee, co-founder of Fundstrat Global Advisors, appeared on CNBC’s “Closing Bell Overtime” to discuss this development. He noted that as the Fed begins to normalize policy and merger activity in the U.S. begins to accelerate, smaller companies are increasingly likely to benefit. Lee also added that there is a misconception in the market that smaller companies grow, or at least tend to grow more slowly than larger companies. In fact, he noted that the small cap index has a median earnings growth that is almost 700 basis points faster than the broader market index, while top-line growth is almost 400 basis points faster. Lee also said the following:

According to Lee, money that has been sitting on the sidelines in recent years due to the Fed’s interest rate policy could now potentially be redirected to smaller companies, as they now offer a good risk-reward ratio for investors. In light of these developments, we’ve compiled a list of some of the smallest stocks currently trading on the market by combing through five months of articles on Stock Gumshoe, a financial analysis website that offers unique insights into what some call “secret stocks” that have been largely ignored by most investors.

Our methodology

We read Stock Gumshoe articles from April to August 2024 and then selected the penny stocks that have promising futures ahead. The stocks are ranked in ascending order of the number of hedge funds that held stakes in them at the end of the second quarter of 2024, according to hedge fund data from Insider Monkey.

Why are we interested in the stocks that hedge funds are investing in? The reason is simple: our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has delivered a 275% return since May 2014, outperforming its benchmark by 150 percentage points.see more details here).

A researcher stands in a modern laboratory, surrounded by scientific equipment.

Lantern Pharma Inc. (NASDAQ:LTRN)

Number of hedge fund holders: 4

Lantern Pharma Inc. (NASDAQ:LTRN) is a clinical-stage biotech company based in Dallas, Texas that focuses on AI, machine learning and genomic data to streamline the drug development process.

Ray Blanco teased this stock as one of his top three picks in the Catalyst Trader Newsletter. Here’s the pitch for the stock:

Stock Gumshoe seems to think the $45 million company is most likely Lantern Pharma Inc. (NASDAQ:LTRN), which has three drugs in clinical trials: LP-184, 284 and 300. The company has also entered into several beneficial partnerships, one with Oregon Therapeutics and another with Starlight Therapeutics.

With all of this in mind, Lantern Pharma Inc. (NASDAQ:LTRN) appears to be an exceptional penny stock player in the biotech sector, largely because of its focus on AI in drug discovery. In 2023 alone, Lantern Pharma Inc. (NASDAQ:LTRN) has continued to advance its radar AI platform, reaching over 60 billion data points in 2023 and now on track to reach over 100 billion data points in 2024.

Four hedge funds held stakes in Lantern Pharma Inc. (NASDAQ:LTRN) in the second quarter, with a total value of $610,000 in shares. Renaissance Technologies was the most prominent shareholder in the company, with 81,800 shares.

General LTRN is in 10th place on our list of penny stocks that will make you a millionaire. While we recognize LTRN’s potential as an investment, our conviction is based on the belief that AI stocks hold great promise for delivering high returns and in a shorter time frame. If you’re looking for an AI stock that shows more promise than LTRN but is trading at less than 5x earnings, check out our report on the cheapest AI stocks.

READ ALSO: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy, According to Morgan Stanley And Jim Cramer says NVIDIA ‘has become a wasteland’.

Disclosure: None. This article was originally published on Insider Monkey.