7 Multibagger Penny Stocks to Buy in November
In my view, it’s a good time to aggressively shop some potential multibagger penny stocks.
The market meltdown in 2020 rewarded brave investors with multibagger returns in growth and penny stocks in the subsequent rally. The markets face another period of uncertainty and dozens of attractive stocks have plunged.
Of course, I would still not go overweight on growth stocks and penny stocks. Blue-chip stocks will continue to protect the portfolio. However, it’s growth and penny stocks that will deliver returns that comfortably beat inflation.
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I would also refrain from getting into highly-speculative penny stocks. There are fundamentally sound businesses that are trading at attractive levels. These potential multibagger penny stocks are worth holding for the long term.
The reason to look at an extended time horizon is to be in sync with reality. In current market conditions, it’s unlikely that penny stocks will deliver multibagger returns in days or months. I would be more than happy with multibagger returns over the next three to five years.
Let’s discuss in detail seven multibagger penny stocks to buy in November.
Polestar Automotive | $4.37 | |
Canopy Growth | $3.08 | |
Transocean | $3.79 | |
Kinross Gold | $3.74 | |
Bitfarms | $1.05 | |
Hecla Mining | $4.82 | |
Mullen Automotive | $0.57 |
Polestar Automotive (PSNY)
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After trading at highs above $13, Polestar Automotive (NASDAQ:PSNY) stock has slumped. This seems like a golden opportunity to accumulate it.
For year-to-date 2022, Polestar has delivered 30,400 cars, which is higher by 100% on a year-on-year basis. The company has also reaffirmed its guidance to deliver 50,000 cars this year. Recently, the company also unveiled Polestar 3, which is a 5-seat SUV.
Amidst these positives, the company’s operating losses expanded to $885 million for the first half of 2022. With widening losses, equity dilution seems likely. However, with the sharp correction, this factor is discounted in the stock.
With new models and expansion in global markets, the company is poised for robust growth. Vehicle level margin will improve with economies of scale. The potential easing of supply chain concerns for the industry is also a stock upside catalyst in 2023.
Canopy Growth (CGC)
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Canopy Growth (NASDAQ:CGC) stock is among the top cannabis names to consider after a correction of nearly 68% so far this year.
Canopy Growth recently announced the creation of a U.S. holding company and the acquisition of Acreage Holdings. Canopy believes that the U.S. market size is likely to be $50 billion by 2026.
It’s worth noting that Germany has recently legalized the purchase of up to 30 grams of cannabis. This might set the stage for more European countries to legalize cannabis for recreational and medicinal use. Therefore, the addressable market is significant and Canopy Growth is positioned to benefit.
Overall, CGC stock seems to have found a bottom. As regulatory headwinds wane, there is visibility for significant acceleration in revenue coupled with margin improvement.
Transocean (RIG)
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The International Energy Agency chief recently opined that the world is in its “first truly global energy crisis.” Saudi has also warned that depleting oil reserves is likely to be a major concern in the foreseeable future.
Given this scenario coupled with geopolitical tensions, oil is likely to remain above $80 per barrel. Transocean (NYSE:RIG) is one of the beneficiaries of higher oil prices. The offshore drilling rig services provider is poised to benefit as exploration activity accelerates.
As of September, Transocean reported an order backlog of $7.4 billion. There has been an increase in order intake in the last few months. Further, new rig contracts are at a higher day rate. Transocean is therefore positioned for EBITDA margin expansion in 2023 and beyond.
It’s also worth noting that Transocean still has 12 cold-stacked rigs with another two under construction. As the market outlook continues to improve, these rigs are likely to be operational. This provides revenue upside visibility.
Kinross Gold (KGC)
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Among penny stocks, Kinross Gold (NYSE:KGC) seems deeply undervalued. The stock trades at a forward price-earnings ratio of 15.5 and offers a dividend yield of 3.3%.
Recently, Kinross also announced $300 million in buyback in 2022. Additionally, the company plans to deploy 75% of excess cash in the next two years for buybacks. This is a potential catalyst for KGC stock trending higher.
For the current year, Kinross has guided for two million ounces of gold production. The company expects production to increase to 2.3 million ounces in 2023. With an investment-grade balance sheet, the company can potentially pursue inorganic growth to boost production. This will offset the production visibility losses due to asset sales in Russia and Ghana.
Bitfarms (BITF)
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It would be criminal to talk about potential multibagger penny stocks without talking about crypto stocks. It’s true that sentiments are down and it’s impossible to predict the timeline for Bitcoin (BTC-USD). However, if there is a reversal, crypto stocks can deliver multibagger returns.
Bitfarms (NASDAQ:BITF) stock is down by more than 80% over the last year. The stock seems seriously undervalued considering positive business developments. The company’s hashing capacity has increased by 180% in the last four quarters. As of Q3 2022, the company’s hashing capacity was 4.2EH/s. Bitfarms expects to add more capacity in 2023.
Even with the low Bitcoin price, the company has continued to generate positive cash from mining operations. For Q2 2022, the company reported an adjusted EBITDA margin of 45%. Once Bitcoin trends higher, EBITDA margin is likely to be well over 60%.
Bitfarms is also well-positioned from a financial perspective. As of Q2 2022, the company reported $46 million in cash. Additionally, the company had $62 million in digital assets. Therefore, there is flexibility to sustain expansion activities through 2023.
Hecla Mining (HL)
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Hecla Mining (NYSE:HL) stock has trended higher by 25% in the last month. The upside has come in a scenario where precious metals have been under pressure due to a strong dollar.
I believe that the upside momentum is likely to sustain for HL stock backed by a solid quarterly performance.
As an overview, Hecla is the largest silver production company in the U.S. Additionally, the company has gold assets. For the first half of 2022, gold mining contributed to 39% of revenue.
Besides a robust asset base, a low-break-even asset is another reason to like Hecla. On a sustained basis, the company has reported positive free cash flows. This has translated into strong financial flexibility for pursuing growth and sustaining dividends.
With Hecla mining increasing its production guidance for 2022, it’s likely that strong quarterly results will follow. HL stock is worth adding to the list of multibagger penny stocks even after the recent surge.
Mullen Automotive (MULN)
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With a flurry of good news, Mullen Automotive (NASDAQ:MULN) stock has surged by 50% in the last month. I believe that the rally from significantly oversold levels is likely to sustain.
Mullen recently announced that the company has “secured exclusive sales, distribution and branding rights” for I-GO. The commercial EV is certified for sale in Germany, France, Ireland, Spain and the UK.
In another good news, Mullen announced the appointment of John Schwegman as its chief commercial officer. John was associated with General Motors (NYSE:GM) for 35 years. This will significantly add to the management team’s strength.
It’s worth noting that the company has completed the acquisition of assets of Electric Last Mile Solutions. This acquisition provides Mullen with the capacity to produce 50,000 EVs on an annual basis.
With these developments, MULN stock looks attractive. Once sentiments reverse for EV stocks, multibagger returns seem likely.
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.
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