Penny stocks, loosely defined as stocks that trade for under $5 per share, have drawn renewed interest from traders and investors ever since the election of Donald Trump as president of the United States. The idea is that the incoming administration will enact tax policies and lower regulatory barriers that will work to the advantage of these companies whose stocks underperformed the S&P 500 in 2024.
That’s not to say that all small-cap stocks performed poorly in 2024. The Russell 2000 index, considered a proxy for small-cap stocks, was up approximately 16%. That’s a good year, but it was about 68% lower than the S&P 500, which closed the year with a gain of approximately 27%.
But you still want to look for companies that offer a strong fundamental case to own the stock in 2025. And while these stocks may make interesting trade candidates, we’re viewing these stocks as three of the best penny stocks to buy for long-term gains.
Strong Partnerships Outweigh Short-Term Risks to Globalstar
Globalstar Inc. (NYSEARCA: GSAT) provides mobile satellite services that play an essential role in Low-Earth Orbit (LEO) communications. The company’s Always On and Always Reliable proprietary satellites allow connectivity in remote areas.
GSAT stock climbed sharply in November 2024 when the company announced a strategic partnership with Apple Inc. (NASDAQ: AAPL). This will provide Globalstar access to $1.5 billion in Apple funding, which the company will use to buy new satellites, nearly double its existing network.
Globalstar also recently announced a partnership with Peiker Holding Gmbh to bring the company’s satellite-based emergency service and telematics capabilities to automotive OEMs.
The company is already well-capitalized due to its business model, which provides recurring revenue. In its most recent quarter, Globalstar generated $72.3 million in revenue, which beat expectations by 19.5%. The company is not yet profitable, but it’s moving closer to that milestone.
Despite a healthy balance sheet, investors will have to endure a reverse stock split sometime in 2025. The board of directors has announced it will be anywhere from a 1-for-10 to a 1-for-25 split. The split is scheduled to coincide with the company’s relisting from the NYSE to the NASDAQ. That is supposed to happen sometime in the first quarter of 2025.
Continued Strength for Gold Should Boost This Mining Stock
Gold was one of the strongest asset classes in 2024 and 2025, posting a gain of around 28%, which just surpassed the gains in the S&P 500. Some analysts are forecasting that the yellow metal may reach the $3,000 mark at some point in 2025.
That would be bullish for mining stocks, and B2Gold Corp. (NYSEAMERICAN: BTG)is one of the more intriguing names risk-tolerant investors should consider. The majority of the company’s mining operations are in geopolitically unstable areas.
The commissioning of its Goose project in Canada is driving the company’s forecast for a 30% year-over-year (YoY) increase in gold-equivalent ounces at the midpoint of its guidance. Strengthening the bullish outlook is a solid balance sheet, featuring $430 million in cash and only $201 million in debt.
The stock trades at a forward price-to-earnings (P/E) of around 10x, and that solid balance sheet covers the company’s dividend, which has an attractive 6.18% yield.
ChargePoint Is a Long-Term Contrarian Bet That Could Pay Off
ChargePoint Holdings Inc. (NYSE: CHPT) went public in 2021 as part of a special purpose acquisition company (SPAC). To be fair, they were one of a number of companies that went public in this fashion. At the time, the company looked like one of the better investments among automotive stocks.
The United States had an electric vehicle (EV) friendly administration that was creating incentives for consumers to own EVs. At the same time, the country needed the charging station infrastructure of the kind that ChargePoint provides.
However, the headwinds have been almost too numerous to count. Demand for EVs has grown sharply but is still below forecasts. At the same time, the buildout of charging stations has been slow to develop in an environment of higher interest rates. Plus, ChargePoint faces competition from Tesla Inc. (NASDAQ: TSLA)and EVgo Inc. (NYSE: EVGO), both of which manufacture the Level 3 superchargers that are becoming the industry standard.
Still, ChargePoint is well-capitalized, meaning the bankruptcy risk is low. And suppose you have a tolerance for risk and a long time horizon. In that case, CHPT stock may look attractive, particularly after the company announced it was partnering with General Motors (NYSE: GM) to develop 500 high-speed charging stations.
