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Highlights
- The ASX Small Ordinaries index tumbled over 2.1% to 3228 by 12:30 PM AEST.
- E33 and RAB are two ASX penny stock that have more than doubled today.
- Investing in penny stocks is risky, therefore, while investing in this space, one should do a proper due diligence.
Australian shares are having a rough Monday as investors are trying to move to sidelines by lightening their portfolios ahead of the RBA meeting on Tuesday, expecting a potential rate hike to curb soaring inflation.
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The benchmark ASX 200 index plunged over 1.55%, erasing all the gains from Friday’s strong session. Small caps are also having a choppy ride today with the ASX Small Ordinaries (ASX:XSO) having tumbled over 2.1% to 3228 by 12:30 PM AEST. However, some ASX penny stocks have managed to remain in their own league and are delivering massive gains today. Let us have a look at two such stocks.
Read More: ASX 200 plunges 1% as investors brace for potential RBA rate hike
- East 33 Limited (ASX:E33)
East 33 is one of the leading companies in Australia that sells high-quality oysters. The company’s Sydney Rock Oysters are amongst the very best oysters in the world. The company has a market capitalisation of a mere AU$6.94 million with a total of 277.65 million issued shares.
E33 shares more than doubled in today’s session, gaining 122.5% to AU$0.089 by 12:30 PM AEST after the company announced its geographic diversification enabled harvest despite enormous disruptions due to continued rain in April 2022. In April alone, the company clocked a harvest volume of499K, generating AU$344K of the AU$1.6 million low season revenue, contributing 21.5% of entire outlook to the end of September 2022. These results put the company significantly ahead of expectations.
- AdRabbit Limited (ASX:RAB)
AdRabbit is a Software-as-a-Software (SaaS) company, which designs and creates various templates for social media ads and marketing based on their AI platform. The company has a market capitalisation of a miniscule AU$4.6 million with 185.8 million issued shares. Today, AdRabbit released its March quarterly update, reporting a revenue of AU$67,398.
During the quarter, the company also completed a dual listing (second one on the TSX) and raised US$2.5 million. The company has reduced its quarterly expenditure on promotional activities, from AU$125K in Q1 CY21 to AU$71K in Q1 CY22, to focus on further improving and developing its next generation platform.
After the update, RAB shares more than doubled in today’s session, skyrocketing 139.1% to AU$0.055 by 12:30 PM AEST, clocking a volume of 1.88 million shares.
Bottom Line
Looking at such lucrative returns from penny stocks in a single session might give the impression of ‘easy money’. However, for every penny stock that becomes multi-bagger, there are several stocks that might have eroded investors’ capital. Therefore, while investing in this space, one should do a proper due diligence.
Read More: Three top hedges to shield your portfolio against inflation
