Can these penny stocks also be multi baggers?

Penny stocks also be multi baggers

·         Penny stocks are cheap

·         Investors should look at the Company’s value, growth prospects, rather than share price while investing in penny stocks

·         There are many stocks that are below 1 cent

There are many cheap stocks on the NZX. Companies like Blis Technology (NZX:BLT), which sells probiotic strain across the globe and is growing very fast, but its share is worth less than 5 cents. Similarly, Promisia Healthcare (NZX:PHL), a healthcare company takes the cake at 0.1 c. There are many stocks below 1 cent and many under 10 cents.

While penny investing, investors look at a Company’s value and growth prospects rather than its share price.

In fact, some of the growing companies fall in this space with their stocks priced at less than NZ$1.

Let’s look at five such stocks with good growth potential.

Profitable penny stocks on the NZX

Many NZX Penny stocks have potential to be multibaggers due to their growth plans and other fundamentals.

Blis Technologies Limited (NZX:BLT)

Blis is the producer of the world’s most advanced probiotic products. It faced some short-term challenges in Q3 in its ingredients revenues which dragged the overall revenue down. According to its latest results, the Company is back on track and there is growth in all its product categories.

The Company also entered into a partnership with Probi AB to grow future revenue and its research and development (R&D) efforts.    

NZ Windfarms Limited (NZX:NWF)

NWF is a renewable energy company with wind energy as its focus. Its market cap is around NZ$55 million. In its update, it also provided a lower EBITDAF guidance as lower average wind speeds have impacted the generation. Despite that, on 25 May, it announced an interim dividend for FY2022 of NZ$0.0020. The Company’s dividend policy adopted last year provides for quarterly dividends of 70% to 100% of free cash flow.

Wellington Drive Technologies Limited (NZX:WDT)

WDT is an IoT solutions provider. Recently, it provided its trading results for the quarter ended 31 March 2022. It said the revenue was up 25.8% at NZ$18.4 million, the gross margin was 25.3% and EBITDA was NZ$0.3 million. As reflected in the financial results, the Company has been going through a challenging period on account of supply chain disruptions and component shortages.

Bottom Line: While penny investing, investors must first educate themselves to avoid pitfalls. Some thing that they must know is that penny stocks are speculative, so the portfolio should be diverse. It should not be penny stock heavy. Secondly, investors should also see a company’s fundamentals before investing.

 

 

 

 

Location: New Zealand

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