In this article, we will explore the top 10 bank penny stocks that are worth considering for investment right now. The US banking sector is facing challenges and opportunities in 2024, with a slower economy, tighter regulations, and the potential for interest rate cuts posing risks for the industry.
While the US banking sector saw the collapse of a few well-known banks last year, the overall number of closures was not as significant as in previous years. Despite this, the closures did highlight the risks associated with banks heavily funded by uninsured deposits. Many bank stocks were able to recover and end the year with positive returns.
Looking ahead, the economic outlook points towards slower growth and the possibility of a rate cut in 2024, which may impact bank profitability. However, overall profitability is expected to remain strong, with asset quality predicted to weaken but remain manageable.
There are economic risks to consider, such as the potential for a recession if the Federal Reserve is not cautious with rate cuts, and the ongoing threat of inflation leading to high rates. Additionally, credit card charge-offs are expected to increase. Banks with diversified deposit bases and fewer uninsured deposits are likely to face lower risks compared to those with more uninsured deposits.
Regulatory changes may also be implemented in 2024 in response to the banking failures of the previous year. Despite these challenges, the banking sector is expected to maintain strong profitability and capital buildup, with potential investment opportunities in undervalued regional banks.
To compile a list of the top 10 bank penny stocks to buy, we conducted a thorough analysis. We identified banks with share prices below $5 and examined the number of hedge fund investors in these banks in Q1 2024. By leveraging Insider Monkey’s database of over 900 hedge funds, we ranked the best bank penny stocks based on hedge fund sentiment.
Investing in stocks that hedge funds are interested in can potentially outperform the market, as shown by our research. Our quarterly newsletter selects 14 small-cap and large-cap stocks each quarter and has delivered a 275% return since May 2014, outperforming its benchmark by 150 percentage points.
Here are the top 10 bank penny stocks to consider investing in now:
10. OptimumBank Holdings, Inc. (NASDAQ:OPHC)
9. AmeriServ Financial, Inc. (NASDAQ:ASRV)
8. SHF Holdings, Inc. (NASDAQ:SHFS)
7. Riverview Bancorp, Inc. (NASDAQ:RVSB)
6. Grupo Aval Acciones Y Valores S.A. (NYSE:AVAL)
5. Mizuho Financial Group, Inc. (NYSE:MFG)
These stocks have shown promise in terms of financial performance and analyst outlook, making them potential candidates for investment in the current market environment.