Investors looking into penny stocks tend to see small companies with low stock prices. Nevertheless, there are large-cap stocks that trade below $5 capable of offering the best of both worlds: stability and growth potential. Such is the case with Grab Holdings Limited, the leader in the super-app market of Southeast Asia. In this article, we shall see the investment rationale behind Grab’s growing appeal and how it stands above other large-cap penny stocks.
Market Condition and Tariffs: Causation Behind Investor Decision-Making
Before embarking on a discussion about GrabHoldings, it is good to check how the general market is behaving. On February 4, Brian Jacobs, chief economist at Annex Wealth, had an interview on CNBC’s Power Lunch concerning the effects of tariff threats upon markets and supply chains. Jacobs states that if any category will be able to ride out the storms of tariff discussions, it would be the larger-cap names, as opposed to smaller ones.
But in terms of long-term reality manifesting in data, that would take time. Jacobsen asserted that large-cap equities, among others in the S&P 500 index, are thus far able to maintain healthy profit margins. How long before the higher costs of tariffs start to impact their profitability?
Small caps are disadvantaged in this regard. Not only do they have weak profit margins, but they also carry even lesser ability to absorb the costs of tariffs. Traditionally, during periods of trade unrest similar to those from 2018 through 2019, large-cap stocks kept the upper hand on value because many were either excluded from tariffs or drying up under the scrutiny of arguments against China. If ever tariffs would come up yet again, it might pan out similarly.
So the bottom line? An uncertain cloud of tariffs is starting to affect the market, but based on precedent, larger companies will continue moving up, especially as long as tariffs pose a minor effect on their margins. Investors should look at the fundamentals of the companies rather than overreacting in the short run.
How We Screen Large-Cap Penny Stocks
To recognize the most-promising large-cap penny stocks, we turned to the Finviz stock screener. The focus was on companies that have a capitalization range of $10-200 billion, and with share prices below $5. From there, we looked at the stocks that have gained the most interest from the elite hedge funds, along with analysts.
The reason we follow hedge funds is quite simple: our research has shown that following the highest picks of hedge funds leads to rewarding investments. In fact, fund performance measured over the time of our quarterly newsletter has returned an impressive 275 percent since May 2014, beating the benchmark by 150 percentage points. Anyone paying attention to hedge funds and backing trade will make their own opinions worthwhile.
Now, why Grab Holdings for the public and their hedge funds?
Reason It is Being Watched
Grab Holdings Limited (NASDAQ: GRAB) offers a super-app platform throughout Southeast Asia performing mobility, delivery services, digital financial services, and other enterprise solutions. Grab, with a market cap of $19.64 billion and a share price of $4.96 as of February 14, has entered an interesting niche within Southeast Asia, comprising countries of operation, such as Indonesia, Malaysia, Thailand, and Vietnam.
Impressive growth has marked it, especially with its Deliveries segment. By Q3 2024, Grab’s gross merchandise value in deliveries reached $2.97 billion-an increase of 16% from the previous year, up from a slower growth rate of 14% in the last quarter and pointing to a very strong momentum for this segment.
The success of it is in GrabUnlimited. Those people that subscribe to GrabUnlimited who buy from Grab spend 4 times more than those who are not members, and 3 times more often. This brings what they call loyalty that should bring loads of business to Grab consistently, and already, the company is harvesting from this investment in the provision of what customers value.
What up there is GrabFood and GrabMart, which also are offering the platform of growth. For instance, GrabMart is growing at 1.7 times the rate of GrabFood, and those people who use both services order 5 times higher with 2 times better retention.
Grab also provides its service for merchants. Dine-in options for restaurants, advertising solutions all add more benefits to users and merchants. All these further strengthen the platform and lead to further growth in the Deliveries segment.
Why Grab is Top of the Pops in Terms of Pick From the Investor’s Lids
Grab has shown the strongest growth trends which thus make it one of the best large-cap penny stocks available for investing in your portfolio. Diverse platforms that boast of a larger number of customers and merchant services further stand in their good position as investment in the fast-growing Southeast Asia developing market.
However, while Grab is definitely a hot stock, AI stocks are also creating quite a buzz lately since they are claimed to provide handsome returns in a shorter time. There are stocks available for people interested in the AI phenomena currently trading at less than 5 times earnings; for those zeroed in on finding that more stable growth-driven penny stock with future potential, Grab certainly shines.
Conclusion: Grab Holdings in the Limelight
Grab Holdings is undoubtedly one of the most exciting large-cap penny stocks at present. With a good business model, rapid growth in its deliveries segment, and a unique position in Southeast Asia, Grab combines for an investment opportunity of safety and growth potential.
However, as with every investment, one must look at the wider economic picture-the tariffs that will make any decision spurious. Resilience has developed among the markets to the threats posed by tariffs, but we will not see the profits margins most affected until they are clearly defined.
At the end of the day, whether you select Grab or another potential high flyer, the focus should be on long-term fundamentals and not be blown off course by the short-term fluctuations of the market. For those searching for a good growth penny stock, Grab might just be the investment opportunity they’ve been waiting for.
Disclaimer: The views and opinions expressed in this article are for informational purposes only. The content does not constitute financial, legal, or investment advice. Readers are encouraged to conduct their own research and consult with a professional before making any financial or legal decisions.
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