Five ASX penny stocks that turned multi-baggers in 2021

Highlights

  • Penny stocks are volatile by nature and carry relatively higher risk than their large cap peers.
  • A very small chunk of penny stocks have the potential to deliver triple-digit returns, while the majority are just junk stocks.
  • SYA, DOR, PRL are some of the penny stocks that turned multi-baggers this year.

The year 2021 has been a great one so far for the Australian equities market. The broader market index, ASX 200 has delivered a decent return of 14.27% on a year-to-date basis (as of 1 September 2021). However, this decent performance of frontline stocks could seem small, compared to the gigantic returns of penny stocks.

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Penny stocks are volatile by nature and have relatively higher risk than their large-cap peers. However, this increased risk also helps to generate higher returns and therefore are preferred by high-risk appetite investors. On that note, let us have a look at five penny stocks that have turned multi-baggers this year. Also, investors should be highly cautious before investing in penny stocks and must do their own due diligence while putting their money on the line.

Related article: Five ASX penny stocks that are in momentum

  1. Sayona Mining Limited (ASX:SYA)

Sayona Mining is a small cap Australian miner, having a market capitalisation of AU$916.9 million. On 30 August 2021, the company announced the completion of the acquisition of North American Lithium, via its subsidiary Sayona Québec. The management is very bullish on lithium demand as this battery metal plays a crucial role in powering EVs.

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The SYA share price has delivered a mind-boggling return of 1558.5% in the calendar year 2021 and is currently trading at AU$0.15.

  1. Future Metals NL (ASX:FME)

Another ASX miner that has delivered an outstanding return this year is Future Metals. This AU$78.4 million company recommenced trading on the ASX on 22 June 2021 following re-compliance with Chapters 1 and 2 of the ASX Listing Rules, after getting suspended earlier this year. In the June 2021 quarter, the company successfully raised AU$10 million and completed the acquisition of Great Northern Palladium Pty Ltd.

The FME share price is trading at AU$0.23 and has delivered a massive return of 1,150% this year.

  1. Renascor Resources Limited (ASX:RNU)

Renascor Resources has been on a tear this year. The RNU share price has rallied 1066.7% this year and marked an all-time high of AU$0.185. On 31 August 2021, the company completed large scale pilot flotation trials at an independent graphite facility.

A total of 77.8 tonnes of Siviour ore had been processed into high purity Graphite Concentrates, which validated recent locked cycle flotation parameters. The Graphite Concentrates have now been dispatched to manufacturers for downstream selection trials.

  1. Province Resources Limited (ASX:PRL)

Province Resources has a market capitalisation of AU$169.44 million. In the recent exploration update, the company lodged multiple programme of works with the Department of Mines, Industry Regulation and Safety to undertake drilling at regional targets.

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The company would be undertaking Air Core drilling activities at Gnama North within the Gnama Nickel-Copper Project. The PRL share price is trading at AU$0.15 and has delivered a massive return of 1,015.4% in 2021 so far.

  1. Doriemus PLC (ASX:DOR)

Doriemus PLC (formerly known as TEP Exchange Group PLC) is the smallest company on our list with a market capitalisation of a mere AU$16 million. The company is into investing in oil and gas properties in the UK. In its June quarterly report 2021, the company announced a capital raising of AU$3.34 million by issuing 14.49 million shares at AU$0.055 per share.

There was no material exposure noted during the quarter other than administration and corporate costs of about AU$77K. The DOR share price is trading at AU$0.23, delivering a gigantic return of 943.8% in 2021.

Bottom line

Although penny stocks are considered to be a risky investment and therefore many astute investors and big funds try to steer clear of these, there are a handful of stocks that can turn multi-baggers in a jiffy. 

However, one thing to be noted is that only few of them hold the potential to deliver triple-digit returns and most of others are just junk stocks that trap investors. Therefore, investing in penny stocks should be done with utmost discipline and proper analysis. 

Related article: Five exciting shares under AU$1 - KEY, ARO, BAT, WEL, IDZ

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