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The best penny stocks on the ASX in 2024 (updated monthly)

Our proprietary algorithm picked 10 penny stocks that are worth watching in the year ahead.

Important note

Unfortunately there's no one magic stock or ETF that's 'best' for everyone. Instead, you should look at your own individual needs and investment strategy to decide what stock is right for you. Further, nobody can say for certain which direction a share will go as past performance is no guarantee of future results. So keep in mind these are stock ideas only and should not be taken as personal financial advice.

It has been a turbulent time for markets, with many of the pressures from 2023 remaining in 2024. Today's share market is still dominated by rising interest rates, stubbornly high inflation and the possibility of a recession. In this current market there has been nowhere to hide with commodities, bonds and shares all falling in recent times.

But as Warren Buffett famously said, "Be fearful when others are greedy and greedy when others are fearful." With markets focusing on the profitable big end of town, this could be an opportunity to snap up some penny stocks at a bargain price.

As such, Finder has come up with a few penny stocks that are worth adding to your watchlist in 2024.

Our best penny stocks methodology

To help you identify the latest penny stocks, we used Finder's proprietary algorithm to find ASX-listed companies that have strong fundamentals based on price performance, profit, revenue and dividends.

We also used filters to exclude companies that did not meet the following requirements:

  • Listed on the ASX for 5 years or more
  • A share price of under $1

Important: Our list of highlighted stocks aren't necessarily the best penny stocks for you or your personal situation. Investing in penny stocks is typically highly speculative and can be very risky. We do not guarantee the performance or returns of any investment. You should do your own research and consult an industry professional when in doubt.

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You could save $1,046 a year on average in brokerage fees by switching to a more suitable online broker, according to Finder research. You might even save money by having more than one platform, especially if you are investing both in Australia and internationally.

The algorithm was last updated on 1 April 2024.


DroneShield (DRO.AU)

DroneShield Limited engages in the development, commercialization, and sale of hardware and software technology for drone detection and security in Australia and the United States. It offers DroneGun Tactical, a portable rifle shape drone disruptor, causing the drone to safely land, or fly back to the starting point; DroneGun Mk4, a rugged handheld counter-unmanned aircraft system (UAS) effector; DroneGun Mk3, a pistol shaped compact drone disruptor; RfPatrol Mk2, a wearable AI-enabled multi-mission detection tool; DroneSentry-X, a cross-vehicle compatible automated 360° detect and defeat device; and DroneSentry-X Mk2 is a software-defined detection and adaptive disruption system.
  • Market cap: A$511.699 million
  • YTD performance: 350.01%
  • 1-year performance: 276.75%
  • 5-year performance: 831.04%
  • P/E ratio: 41.5
  • Headquarters: Australia

4DS Memory (4DS.AU)

4DS Memory Limited, a semiconductor company, engages in the research and development of non-volatile memory technology in Australia. The company develops interface switching ReRAM technology for gigabyte storage class memory in mobile and cloud.
  • Market cap: A$176.344 million
  • YTD performance: -16%
  • 1-year performance: 303.85%
  • 5-year performance: 337.5%
  • P/E ratio: N/A
  • Headquarters: Australia

Connexion Media (CXZ.AU)

Connexion Mobility Ltd develops and commercializes fleet management software for the automotive industry in Australia, the United States, Canada, and Mexico. Its product portfolio includes OnTRAC, which manages the courtesy transportation program; and the Connexion platform designed with OEM-agnostic functionality to franchise and multi-franchise.
  • Market cap: A$26.189 million
  • YTD performance: 81.25%
  • 1-year performance: 52.64%
  • 5-year performance: 262.5%
  • Headquarters: Australia

Dropsuite Limited (DSE.AU)

Dropsuite Limited, together with its subsidiaries, operates a cloud-based software platform worldwide. It offers Dropsuite Website Backup, a cloud-based website and database backup, and monitoring service that allows website owners to automatically backup their website files and databases, monitor website availability and performance, and restore lost; Dropsuite Email Backup and Archiving, a cloud-based email backup and archiving solution that helps organizations to securely backup, manage, recover, comply, and protect their email data; and Dropsuite for Microsoft Office 365, a backup and archiving solution for Microsoft's Office 365 suite of products, including email, SharePoint, OneDrive, Groups, and Teams.
  • Market cap: A$205.348 million
  • YTD performance: 103.45%
  • 1-year performance: 40.48%
  • 5-year performance: 1034.62%
  • Headquarters: Australia

Immutep (IMM.AU)

Immutep Limited, a clinical-stage biotechnology company, engages in developing novel LAG-3 Immunotherapy for cancer and autoimmune diseases. The company is involved in advancing therapeutics related to Lymphocyte Activation Gene-3 (LAG-3), a cell surface molecule that plays a vital role in regulating the immune system.
  • Market cap: A$463.644 million
  • YTD performance: -9.63%
  • 1-year performance: 59.58%
  • 5-year performance: 1685.72%
  • P/E ratio: N/A
  • Headquarters: Australia

Marmota Energy (MEU.AU)

Marmota Limited engages in the exploration of mineral properties in Australia. The company explores for gold, copper, and uranium deposits.
  • Market cap: A$48.705 million
  • YTD performance: -8.33%
  • 1-year performance: 57.15%
  • 5-year performance: 214.29%
  • P/E ratio: N/A
  • Headquarters: Australia

Hillgrove Resources (HGO.AU)

Hillgrove Resources Limited operates as a mining company in Australia. It explores for copper, gold, and silver deposits.
  • Market cap: A$162.526 million
  • YTD performance: 143.75%
  • 1-year performance: 73.34%
  • 5-year performance: 160%
  • P/E ratio: N/A
  • Headquarters: Australia

Intelligent Monitoring Group (IMB.AU)

Intelligent Monitoring Group Limited provides security, monitoring, and risk management services for business and individual use in Australia. It also offers high net worth family security solutions, including the development of personal and family safety procedures, ongoing review and assessment to the penetrability of existing residences, evacuation and emergency planning, residential and commercial security systems, phone based duress and location services, customized electronic dashboards, personal safety and travel awareness training services, incident management and response services, close personal protection/personal security drivers, and supplier selection and vetting services.
  • Market cap: A$88.129 million
  • YTD performance: 629.17%
  • 1-year performance: 306.98%
  • 5-year performance: 11566.67%
  • P/E ratio: N/A
  • Headquarters: Australia

KIN Mining NL (KIN.AU)

Kin Mining NL engages in the development and exploration of gold and base metal properties in Australia. Its flagship project is the 100% owned Cardinia Gold Project, which covers an area of approximately 285 square kilometers comprises 139 tenements located in the North-Eastern Goldfields region of Western Australia.
  • Market cap: A$94.252 million
  • YTD performance: -46.87%
  • 1-year performance: 203.58%
  • 5-year performance: 203.58%
  • P/E ratio: N/A
  • Headquarters: Australia

Aeris Environmental (AEI.AU)

Aeris Environmental Ltd, together with its subsidiaries, engages in the research, development, and commercialization of proprietary technologies in Australia and internationally. The company offers heating, ventilation, air-conditioning, and refrigeration (HVAC/R) hygiene and remediation technology, indoor air quality, and corrosion protection services, as well as distributes HVAC/R hygiene, anti-corrosion, and disinfectant products.
  • Market cap: A$16.462 million
  • YTD performance: -77%
  • 1-year performance: 228.58%
  • 5-year performance: 228.58%
  • P/E ratio: N/A
  • Headquarters: Australia

Should you invest in penny stocks in 2024?

Penny stocks are smaller, less established businesses which are often impacted by volatility. In a period like we have today where markets are punishing unprofitable companies with investors fearing a recession, it might seem like it is a bad time to be buying penny stocks.

And for anyone who hasn't got a stomach for volatility this might be true. Although there are a few caveats to this.

Just because a market is volatile, it doesn't necessarily make it a bad time to invest, especially for those who are buying for the long term. After all, the share price and business performance don't always align over the short term.

So over the long term owning shares that are cheaper, in businesses that are growing can be beneficial to your long-term wealth.

If you're looking at investing during a downturn, just look at the global financial crisis (GFC). While many businesses didn't survive, others thrived, taking advantage of a changing landscape. In the US, companies including Netflix, LEGO and Mailchimp took the opportunity to expand and have since become global leaders.

In Australia, the commodity boom off the back of the GFC helped power many of our penny stocks, especially in the mining and resources sector.

Also it's worth pointing out that not all shares follow the market. In fact many businesses can have differing performance to how the market is going. Again though, this will rely on buying the right business.

Finally some businesses perform stronger in a recessionary period. Service providers, repair services, small luxury items, consumer staples and commodities can be recession resistant.

How penny stocks perform in a bear market

Penny stocks are highly volatile and are often seen as riskier investments. But that doesn't mean all penny stocks fall in a bear market.

Historically, penny stocks have larger swings in both bull and bear markets. This means that when times are good, investors increase their holdings. However, when the market turns and the sentiment is low, these investments fall further than blue chip shares do.

But just like large caps, how the business performs and its share price vary based on its own circumstances and the sector it is in.

I’ll trade in things I believe have a lot of hype… I’ll have a very firm stop loss and a price I take a profit at. And once I take the profit, I take it and move on. I’m done. I’m not re-entering… Or if it hits my stop loss, I sell and take the loss. I’ve taken lots of losses and I’ve taken lots of profits.

Fred Schebesta

Fred Schebesta
Founder, Author

Type of investor suited to penny stocks

Penny stocks are highly speculative investments. The odds of you losing all your money are greater than gaining multi-bagger returns.

As such, these investments usually are tailored towards the following:

  1. Experienced investors
  2. Investors with high risk tolerance
  3. Hedge funds and other professional investors
  4. Those with a long-term horizon who are willing to ride out short-term volatility
  5. Investors who are happy to take a bit of a gamble for potential extra reward

Pros

  • Lower share price
  • Today's penny stock could be tomorrow's winner
  • Potential for multi-year returns as the company grows
  • Not necessarily riskier businesses, just smaller companies

Cons

  • Higher risk especially compared to blue chips
  • Liquidity issues
  • Increasing volatility
  • Prone to scams
  • On average have more losers than winners
  • The business might have a short history

None of us can see into the future. What happens next is anyone's guess. However, we do know some big themes that currently drive the market:

  1. Technological innovation impact
  2. Global economic recovery dynamics
  3. Stable interest rates

Technological innovation impact

In 2024, penny stock trends are likely to be influenced by advancements in technology. Companies focusing on innovative solutions, such as artificial intelligence, clean energy, and biotechnology have attracted attention from investors seeking growth opportunities. Australian market could see increased volatility as these sectors continue to evolve.

Global economic recovery dynamics

As the world navigates through significant developments (geographical tensions), penny stocks may be influenced by the global economic landscape. Sectors tied to recovery efforts, such as travel, hospitality, and infrastructure have experienced shifts in demand in 2024. Investors closely monitor these trends, looking for penny stocks positioned to benefit from the broader economic resurgence.

Stable interest rates

Finder's outlook for 2024 suggests that interest rates remain stable. While this provides a sense of predictability, it also presents a mixed signal for penny stocks. On one hand, the lack of rate cuts may limit some potential market stimulus, but on the other, stability can be reassuring for investors looking for a predictable environment.

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FAQs

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances and obtain your own advice before making any trades.

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