Source: Copyright © 2021 Kalkine Media Pty Ltd
- Penny stocks can have high-growth potential stocks that are low priced and highly risky.
- They are sought after by professional traders as they are low priced but risky.
- There are some NZX-listed penny stocks that investors might want to look at in 2021.
Penny stocks are small company shares with low-market capitalisation. The stocks are low priced but that doesn’t mean that they don’t have an upside potential. There are many NZX penny stocks that beat the COVID-19 effect and performed well due to the companies’ growth path. They could be risky, so investors willing to take risks should go for penny stocks, as investment in right penny stocks can help an investor make big profit on small investment.
Let’s look at penny stocks under 50 cents.
Asset Plus Limited (NZX:APL)
This is an infrastructure company, which showed a spectacular jump in its net profit for the half year ending September 2020. Its profit was NZ$12M, up from NZ2M in the prior corresponding period. Operational funds also increased due to cash-raise initiatives. APL’s most significant achievement has been securing the Munroe Lane Development contract.
The Company has solid plans for the year 2021. It is focused on increasing its portfolio and raise more capital to initiate new development and complete old projects.
On March 5, 2021, APL was trading flat at NZ$0.320, at the time of writing this article.
Cavalier Corporation Limited (NZX:CAV)
This Company is a carpets company that reported a better-than-expected sale for the six months ending December 31, 2020. The demand for carpets was strong after the lockdown was lifted in NZ. Woolen carpet sales rose by 10% over the same period in 2019 in NZ.
It has a well-thoughtout business strategy, which takes into consideration the Company’s strengths, consumer trends, zero debt, and increased footprint. With all this, the Company seems well poised for growth value and profitability.
On March 5, 2021, the stock was trading down by 8.11% at NZ$0.340, at the time of writing this article.
New Talisman Goldmines Limited (NZX:NTL)
It is a mining company, which has robust growth plans. It is currently reviewing its working and moving towards restructuring so that it can scale up its operations.
Several initiatives like acquisition of Vanuatu Assets of Cantebury Resources give it a larger footprint in the Pacific Rim. The cost-cutting measures will also give the Company good operating margins. NTL was impacted by the COVID-19 pandemic restrictions in the first half of 2020, but the second half has seen the Company’s business picking up.
On March 5, 2021, the stock was trading flat at NZ$0.004, at the time of writing this article.
Cooks Global Foods Limited (NZX:CGI)
CGI is a food and beverage retail and supply group. It is a master franchisee of Esquires Coffee Houses across the world.
Even though the group’s growth was slowed down during the COVID-19 situations, and group sales dropped to almost half. The UK and Ireland outlets showed stability from July to October, when the lockdown restrictions were removed, and outlets allowed to start operations. CGF was inspired by the performance of its stores in the UK & Ireland during the time from July to October.
So, it plans to do more business there. CGF is expecting to yield good results from its restructuring initiatives, in the whole of FY2021. Its cash-flow situation is strong after the sale of its Scarborough Fir business in Australia and New Zealand so it can focus on its core business.
On March 5, 2021, the stock was trading flat at NZ$0.042, at the time of writing this article.
ArborGen Holdings Limited (NZX:ARB)
It’s a forestry company, which operates in many geographies. The Company deploys the latest technology for its business and is planning big into expanding into horticulture.
The Company showed a lot of resilience despite the COVID-19 situation. Its half-year performance reflects operating earnings well over 200% and operating cash flows up by NZ$5.7M over the same period last year. ARB has concrete plans for the year 2021. It plans to expand into Australasia and diversify into horticulture, growing premium crops like tea, hop, and blueberries.
On March 5, 2021, the stock was trading down by 0.57% at NZ$0.175, at the time of writing this article.
Burger Fuel Group Limited (NZX:BFG)
BFG is a fast food restaurant company, which operates through its three brands-- BurgerFuel, Shake Out, and Winner Winner. It has branches across geographies.
At this point, the ongoing effects of COVID-19 on hospitality sector are still unknown, but the Group has a healthy cash flow, no debt, and lower operating costs. With all this, BFG is expecting the some growth in its profits in New Zealand. The group also has plans to open its restaurants in more locations in NZ, but franchise opportunities are limited as of now.
On March5, 2021, the stock was up by 1.27% at NZ$0.400.
Geo Limited (NZX:GEO)
Geo is a technology company. It operates as a Software as a Service (SaaS) business catering to sales teams. GEO reported an improvement of 91.1% in its EBIDTA to NZ$2.1M in the half-year results (till December 2020) declared in February.
On March 5, 2021, the stock was trading down by 1.12% at NZ$0.088, at the time of writing.