- Revenue per share gauges how much revenue a company is generating per issued share.
- Revenue should not be the only criteria to focus at while selecting a stock for investment.
- MOZ, MIL, SIO are few of the ASX penny stocks, which have garnered high revenue per share.
Penny stocks have been stereotyped as companies with less financial stability, zero future visibility and not-so-competitive underlying businesses. This might be true for most of the stocks which could also be categorised as junk stocks, however there are exceptions too.
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While selecting stocks for a portfolio, penny stocks could be screened on the basis of many parameters which gauge the fundamental value of a business. Revenue per share is one such valuation metric, which gauges how much revenue the company is generating per issued share. Higher the revenue per share, higher the value is deemed for the company.
Which ASX penny stocks are generating higher revenue per share?
Listed below are three ASX penny stocks that are generating high revenue per share. However, while taking the plunge, one must do a thorough research about other aspects of the stock as well.
Read More: Three ASX penny stocks shining this month
- Mosaic Brands Limited (ASX:MOZ)
Mosaic Brands is a niche retailer dealing in women’s apparel and accessories. The company’s online sales in FY21 achieved a record revenue of AU$111 million, which represented 19% of the total revenue. Net cash position surged almost seven times, from AU$3.6 million in FY20 to AU$ 25.1 million in FY21.
The increased revenue translated to a revenue per share of AU$7.3, which is one of the highest among ASX penny stocks. The MOZ share price has delivered a negative return of 30.78% this year and is currently trading at AU$0.64, as of 18 October 2021, 12:20 PM AEDT.
- Millennium Services Group Limited (ASX:MIL)
Millennium Services Group specialises in providing cleaning and security services to commercial properties, retail shopping centres, etc. The company has a market capitalisation of AU$27.6 million.
In FY21, the firm’s revenue increased by 7% (over FY20) to AU$275.5 million, while underlying gross profit surged 34% to AU$40.8 million in the same period. The revenue per share of the company stands at AU$5.9. The MIL share price is trading 9.65% up for the year, at AU$0.62.
- Simonds Group Limited (ASX:SIO)
Simonds Group is a AU$68.6 million Australia-based company having two integrated businesses, providing homebuilder and registered training services. The firm pushed its revenue 1.7% higher in FY21 to AU$676.1 million, from AU$664.8 million in FY20.
Some changes in product mix were offset by lower site productivity due to supply constraints, hurting revenue. Nonetheless, the company still has a revenue per share of AU$4.63, making it one of the most preferred stocks by high-risk investors. SIO shares are up 23.68% in the last one year, currently trading at AU$0.47, as on Monday, 12:20 PM AEDT.
Although penny stocks are generally riskier and their revenue streams are not consistent or well-established, but there are always some stocks that are able to generate high revenue. When revenue per share goes higher, the business starts to become more valuable, making it a preferred choice for high-risk investors.
That said, revenue increase should not be the only criteria to focus upon while selecting a stock for investment. There are many other aspects of a business such as cost structure, competitiveness, cyclic nature of demand, etc. which determine the overall viability of the business.