3 high-growth penny stocks to consider buying for 2024 (2024)

Edward Sheldon’s been scanning the market for penny stocks with significant potential. Here are three he likes for 2024.

The content of this article was relevant at the time of publishing. Circ*mstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Penny stocks can have a place in a well-diversified portfolio. These investments are high-risk. However, on the plus side, they can potentially deliver huge returns.

Here, I’m going to highlight three high-growth penny stocks to consider for 2024 and beyond. All three companies have momentum right now, and I think they’ve a lot of potential from an investment perspective.

Eleco

First up is Eleco (LSE: ELCO). It’s an under-the-radar software company that specialises in solutions for building/project management. It recently won the ‘Project Management Software of the Year’ award for the 10th consecutive year at the annual Construction Computing Awards 2023.

Eleco’s growth has been rather muted in recent years. However, growth now appears to be picking up, thanks to a shift to a recurring revenue or software-as-a service (SaaS) business model.

For 2024, analysts expect the company to generate revenue growth of around 16% and earnings growth of around 25%. That’s a decent level of growth.

One thing that caught my eye here is the fact Eleco recently raised its interim dividend by a whopping 25%. This suggests management is very confident about the future.

Of course, a weak macro environment is a risk with Eleco. This could negatively impact the building industry.

Taking a longer-term view however, I like the look of this software stock. The forward-looking price-to-earnings (P/E) ratio is 19, which is not high for a profitable SaaS company.

hVIVO

Next we have hVIVO (LSE: HVO). It’s a small healthcare company that offers services for clinical trials and lab testing and serves a number of the top 10 global biopharmaceutical companies.

This is a business with a lot of momentum right now. Back in September, it reported revenue growth of 52% for the six-month period ended 30 June. At the time, it also said it intends to start paying annual dividends soon (again, this is a clear sign of confidence from management).

Meanwhile, in December, the company said that recent trading has been ahead of guidance.

I will point out that while the global pharmaceutical industry looks set for long-term growth, there could be ups and downs along the way. So there’s no guarantee the company’s momentum will continue.

At a P/E ratio of 20 however, I think the penny stock has a lot of potential. And it’s worth noting that rival Ergomed recently received a takeover offer.

Creo Medical

Sticking with the healthcare sector, the third stock I want to highlight is Creo Medical (LSE: CREO). It’s a medical device company that specialises in instruments for endoscopic (minimally invasive) surgery.

Creo’s flagship product, Speedboat Inject, looks really interesting. A multimodal endoscopic instrument, it can be used by surgeons to dissect, cut out, inject, and more.

The company is certainly having a lot of success with this product. In the first half of 2023, the company saw a 42% year-on-year increase in the volume of procedures with Speedboat Inject and a 44% increase in its user base from the end of 2022.

Now this is the riskiest of the three penny stocks, to my mind. That’s because the company isn’t yet profitable.

However, with revenues forecast to rise 24% in 2024, I think it’s worth a closer look right now.