A snapshot of ASX penny stocks that posted return of over 10% in 2022

Highlights:

• In Australian stock market, those stocks are penny stocks which have small market capitalisation.
• ASX 200 dropped by almost 7.91% in the past one year.

Australian stock market has witnessed a lot of ups and downs in 2022 as the mortgage rates tripled, the Russia-Ukraine war broke out, the global supply chain tightened, and central banks hiked the interest rates globally.

In Australia, the cash rate is 3.10%. In December 2022, the Reserve Bank of Australia announced an increase of 25 basis points.

Almost all the asset classes reported a fall in 2022. For instance, in one year, S&P/ASX 200, a benchmark index for equity performance, posted a drop of 7.91% (as of 3 January 2023). Moving to the bond market, SPDR S&P/ASX Australian Bond (ASX:BOND) dropped by 11.44%. Australian property index, S&P/ASX 200 Real Estate (INDEXASX:XRE) registered a drop of 25.61%.

Penny stocks are simply stocks that have a small market capitalisation in the Australian stock market. Worth mentioning here is that the share price of the stock does not tell whether the stock is a penny stock or not, unlike the US stock market, where penny stocks stand for those stocks which have share prices under US$5 per share.

This piece talks about those ASX-listed penny stocks which have delivered substantial returns in 2022. The stocks discussed in this piece are Ensurance Limited, MSL Solutions Limited, Advanced Banking Technology Limited and Duketon Mining Limited.

Ensurance Limited (ASX:ENA)

Ensurance is an insurance underwriting organisation with operations in the UK and Australia. In the annual general meeting 2022 (AGM22), the company informed the market that it launched its Australian operations with the acquisition of TK Specialty Risks Pty Ltd.

As reported as of 23 November 2022, the company deals with over 200 broking businesses and more than 1200 individual brokers across Australia.

In the financial year 2022 (FY22), the company recorded a surge of 61% in revenue and an increase in gross written premium under management to AU$57 million. Also, the company became debt-free after paying a loan of AU$2.5 million.

Looking at the stock performance of Ensurance, the shares last traded at AU$0.245 per share with a market capitalisation of AU$22.52 million. In one month, the share price has increased by 2.08% and by 11.36% in the last six months. In one year, the share price has surged by 11.36%. However, the share price has dropped by 65% in the last five years.

MSL Solutions Limited (ASX:MSL)

MSL offers SaaS technology to the hospitality, leisure and sports sectors. The company assists these sectors in delivering significant customer experiences at every engagement. Three core pillars of MSL are Point of Sale, Golf and digital solutions. The company provides its services in five continents with offices in the Philippines, the United Kingdom, Denmark and Australia.  

In FY22, the company received an acquisition offer at an equity value of AU$119 million which implies that over AU$100 million of value was created in the last three years. The company reported SwiftPOS plus strategic enterprise wins in key markets during the year. Revenue surged by 38%, and recurring revenue increased by 18%. Organic revenue grew by 16%. EBITDA increased by 70% with 300 basis points increase in EBITDA margin. In 12 months, the cash balance grew by 72%, with the group having no interest-bearing debt.  

The acquisition of OrderMate in September 2021 contributed AU$1.2 million in EBITDA and AU$5.3 million in revenue in the span of nine months.

Moving to the stock performance of MSL Solutions, the shares were last spotted trading at AU$0.29 per share (at 10:20 AM AEDT) with a market capitalisation of AU$108.89 million. In one year, the share price has increased by 12.31%. In the last six months, the share price has zoomed up by 82.50% and recorded a rise of 4.29% in a month. In the last five years, the stock price has grown by 16.80%.

Advanced Banking Technology Limited (ASX:ABV)

Advanced Braking Technology is a supplier of the advanced brake system to all seven continents. The company offers its products to recreational off-road vehicles, agriculture, freight, military, civil construction and mining industries. According to the company’s official website, the company invests in research and development by collaborating with a range of industry sectors to customise its technology.

In FY22, the company said that EBITDA and net profit positive trend continued. Operating sales grew by 12.5% over the previous year, and the product sales margin reached 45.1%. At the end of the year, the cash balance was AU$1.739 million. Total revenue grew by 12%, and EBITDA increased by 6%.

In the AGM 2022, Advanced Braking said that the underground mining market is expected to grow by around 18% CAGR 2022 – 2023 globally. Also, the company expects rapid industrialisation in developing nations.

Shares of Advanced Braking last traded at AU$0.040 apiece with a market capitalisation of AU$15.16 million. In a year, the share price has zoomed up by 33.33%. In the past five years, the share price has fallen by 33.33%.

Duketon Mining Limited (ASX:DKM)

Duketon is a mineral exploration company that visions building a mining and exploration company via considered use of funds. The company is focused on exploring nickel deposits in the Duketon greenstone belt. The flagship project of the organisation is its 100% owned Duketon project, that has a prospective for base metal mineralisation, PGE and nickel.

In FY22, the company recorded a net loss after tax of AU$9 million with an exploration expenditure of AU$3 million. As of 30 September 2022, the cash and liquids were AU$18.7 million.

Shares of Duketon last traded at AU$0.41 per share with a market capitalisation of AU$50.05 million. In one year, the share price has increased by 13.89%. In the last six months, the share price has zoomed up by 64% and by 17.14% in a month.