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There are several penny stocks that are worth looking at on the NZX. These are generally lower than NZ $1 and could be trading at a lower price than their intrinsic value. These could be stocks that have the potential to grow.
Investors who want to take high risks should go for penny stocks as they are highly volatile and could be risky. The penny stocks are not for the risk-averse investors.
Let’s look at some penny stocks that have been doing well on the NZX.
ARborGen Holdings Limited
Auckland-based ArborGen Holdings Limited (NZX:ARB) is a forestry company that operates in many geographies. The company is expanding into horticulture business. For its forestry ventures it deploys latest technology to improve productivity per acre.
Despite the headwinds created by theCOVID-19 situation, the Company has been growing. Its half months performance was robust with operating earnings well over 200% and operating cash flows up by NZ$ 5.7 M. Even though ARB was limited in its overseas initiatives in the year 2020, it did manage to grow wherever it could.
For 2021, the Company has concrete plans for expansion. It plans to expand its market into Australasia and diversify into horticulture business with plans to grow several crops like tea, hop and blueberries.
On February 25,2021, the ARB stock closed 0.56% down at NZ$0.177.
Asset Plus Limited
Asset Plus Limited (NZX:APL) is another small cap company that has performed well despite COVID-19 situations. In its half year results ending September 30, it reported an income after tax at NZ$ 11.5 M up from NZ$2 M in the same period last year.
In fact, its chairman, Bruce Cotterill said that the last six months had been very good for the company as it acquired several new projects. Munroe Lane Development is a very significant one and for that the Company had sufficient funds at hand through capital raise and new funding structure.
On February 25,2021, the stock closed at NZ$0.350 down by 2.78%.
Cooks Global Foods
Cooks Global Foods (NZX:CGF) is an integrated food and beverage company that owns food chains across the globe.
Even though in the first half of FY2020, the Company lost some its gained momentum due to COVID-19, it recovered some ground in the second half of the year. The impact from Acquisition of Triple Two Coffee in was reflected in the second half.
The group expects its restructuring steps to yield results in the whole of FY21. The sale of Scarborough Fair business in Australia and New Zealand gave it some cash flows and focus on its core businesses.
The Company is confident that it will recover the growth momentum in FY22 and expects a pre-COVID-19 operation from Q2 of 2021.
On February 25, 2021, the stock closed at NZ$0.044 down by 2.22%.
Cavalier Corporation Limited
Cavalier Corporation Limited (NZX:CAV) had a very good first half of 2021. Its share was trading up by 26.15% at NZ$ 0.410 at the close of the trade.
In the 1H21, despite COVID-19, the Carpet Company was able to launch a new brand called Bremworth. It also launched lifestyle wool collection range and other products during this time.
In its results announced on February 25, Cavalier Corporation Limited has reflected a robust y-on-y profitability via strong growth in woolen carpet sales and sale of Auckland property. Its EBITDA was up by 61% at NZ$ 4.8 M.
Key initiatives in 1H21 included the launch of the new Bremworth brand for Cavalier’s carpet business; the rollout of the Lifestyle (affordable wool) collection ranges and other uniquely designed products, providing greater choice for consumers; and an expansion of the retailer distribution networks in both New Zealand and Australia.
The Company has a well thought out strategy that will take it forward with zero debt, adequate funding and god footprint for it to grow in value and profitability in next five-years.
Chatham Rock Phosphates
Chatham Rock Phosphates (NZX:CRP) is a mining company that has plans to manufacture and supply eco-friendly organic phosphate to the farmers. The penny stock has been performing well due to Company’s focus on growth initiatives and priority to the environmental and social concerns.
Chatham’s merger with Avenir Makatea will give a large foothold in the organic phosphate market and also enable it to expand its geographies.
The stock price has been rising almost consistently.
It may be noted that recently, the Company has seen an interest in shareholders, and they have increased significantly.
On February 25,2021, the stock closed at NZ$0.145 down by 2.67%.
Geneva Finance Limited
Geneva Finance Limited (NZX:GFL) has performed well in its half year result for 2021. The Company’s profit before tax saw a 44% over the previous year at NZ$ 3.3%. Even though initial period of shutdown during COVID-19 pandemic had an impact on the insurance sales, there was an increase in the second half which led to the outcome of 44% per cent increased profit before tax.
COVID-19 had less impact on some of its business segments For some other segment it expects an uptake going forward. For instance, it expects that two of its operations- debit litigation and invoice financing will benefit from the recessionary impact the economy will witness in 2021.
On February 25,2021, the stock closed down by 1.92% at NZ$ 0.510.
MHM Automation (NZX:MHM) is a technology company that is into automation of food processing industry. Its half year results showed an increased profit but decreased sales revenue by 4% over the same period last year.
For the next half, however, the Company has a very bright outlook. It expects a rise in profitability due to increased demand in two of its products sets-Milmeq and H&C automated solutions.
The Company plans to grow its footprint as automation is in great demand and increase its product portfolio through research and innovation.
On February 25,2021, the stock closed up by 1.41% at NZ$0.720.