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One of the best penny stocks today has been called the "Tesla of Penny Stocks." Ideanomics Inc. (NASDAQ: IDEX) popped 438% since May 29.
That made IDEX one of the top gainers in May. But a money-doubling trend says another stock could be our best penny stock to buy now…
Penny stock investing is a speculative process where you look at stocks trading under $5 a share. Because of their low share price, penny stocks have the potential to make huge percentage moves when a catalyst hits.
That's what penny stock investors often look for: a big, short-term profit.
And they got exactly that from IDEX last month. The company had opened its Mobile Energy Global (MEG) electric vehicle (EV) facility in Qingdao, China. The center reported selling 2,139 EVs in May.
This pumped the stock, also spelling promise for the future of the Ideanomics enterprise. But if you're a penny stock investor looking for maximal gain in the shortest amount of time, we have better opportunity for you in the short run.
First, here's why IDEX is making so much noise right now…
Why IDEX Might Be a Top Penny Stock
IDEX is a special case when you compare it to other top penny stocks on the market. Often, you'll find penny stock prices soaring on some pretty uninteresting bits of news.
For example, Senmiao Technology Ltd. (NASDAQ: AIHS) soared 268% last year after a major university adopted its technology.
What makes Ideanomics different is that it's at the center of an important technological revolution taking place over the next few years. Electric vehicles are taking the world by storm. And Ideanomics is well-positioned to benefit from the surge.
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By 2030, we are supposed to see $26.9 million electric vehicles sold. That would be a 715% spike from 3.3 million in 2019.
Big-name auto manufacturers are staying ahead of the curve with their production lines. Fiat Chrysler Automobiles NV (NYSE: FCAU) expects to have an electric option for all its Jeep models by 2022. And Ford Motor Co. (NYSE: F) could have 16 fully electric vehicles by 2022.
All of this points to a growing EV industry and the potential that cars may be almost exclusively EVs in the long run.
IDEX is capitalizing on this trend in a unique way. It is a New York City-based financial technology (FinTech) company. But its primary function is broader than ushering in new FinTech products. It is also "facilitating the adoption of commercial electric vehicles."
It's doing this through its electric vehicle division, Mobile Energy Global (MEG). The division provides solutions for financing and charging EVs. It's succeeded doing this in Qingdao and Beijing, China, where tax incentives for EV-driving are much greater. Lately, it's sold EV taxis and buses in various Chinese provinces.
When electric vehicles grow in popularity in the United States, IDEX will have an opportunity to do the same thing it's doing in China. This could be great for buy-and-hold investors.
But as for any big short-term gains, IDEX's giant bounce is already past.
That doesn't mean you should avoid a cheap stock with great potential. But if penny stock investors are looking for big upside over the next few months, they should buy this other penny stock instead…
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.