- Penny stocks are small companies that trade for less than US$5 per share.
- Investors can see penny stocks as highly speculative ones due to lack of liquidity, small company size and wide price quotations.
- Rakon, Metro Performance Glass, TIL Logistics, Geo, etc are some of the stocks that can be a good bet in coming days.
Penny stock is a small company that trades for less than US$5 per share on NASDAQ and even lesser on NYSE. Such companies have low market capitalisation.
During the course of time, penny stocks could either develop into a large organisation, giving higher returns or could slump down in their initial years, incurring huge losses.
Let’s have a look at the performance of these 6 NZX listed penny stocks.
Rakon Limited (NZX:RAK)
Rakon Limited shares last traded flat at $0.4 on 16 October.
The Group reported revenue of $119 million in FY20 (FY19: $114 million), reflecting strong results, with growth in telecommunications, and decline in space & defence and global positioning. The Group’s overall demand is likely to increase as 5G deployment begins.
Let’s have a look at RAK’s financials for FY20.
Image Source: RAK FY20 Results, dated: 29 June 2020
Metro Performance Glass Limited (NZX:MPG)
Metro Performance Glass share price was noted flat at $0.34 on 16 Ocotber.
The Group revenue for June and July 2020 was in line with last year and activity in NZ recovered well after Alert level 4 lockdown. MPG expects building activity to soften in H2 and improvement in Australian Glass Group are likely to be sustained in FY21.
Steel & Tube Holdings Limited (NZX:STU)
Steel & Tube Holdings’ shares last traded flat at $0.62 on 16 October 2020.
The Group posted a decline in revenue to $417.9 million in FY20 due to coronavirus lockdown and restrictions in 2H20, diminishing stainless steel market and competitive pricing pressures.
TIL Logistics Group Ltd (NZX:TLL)
At the end of the trading session on 16 October 2020, TIL Logistics’ share price stood at $0.73, up by 1.39% from its previous close.
In FY20 report for the period ended 30 June, the Group reported EBIDTA of $26.5 million, in line with its guidance range of $25 million to $27 million. TIL Logistics anticipates challenges from COVID-19 to persist in FY21, with the flow on effects to be felt for some time.
Let’s have a look at TLL’s financial results for FY20.
Image Source: TLL FY20 Results, dated: 27 August 2020
Geo Limited (NZX:GEO)
At the end of the trading session on 16 October 2020, Geo’s share price stood at $0.075, up by 1.35% from its previous close.
GEO reported a fall of 14.7% in its revenue on pcp to $4.8 million in its FY20 yearly results. However, GEO posted a 12.4% improvement in EBITDA and a 40.5% reduction in operating and investing cash outflows despite halting customer acquisition activities during COVID-19 lockdown in H2.
Abano Healthcare Group Limited (NZX:ABA)
At the end of the trading session on 16 October 2020, Abano Healthcare’s share price stood at $4.22, up by 0.24% from its previous close.
The Group’s FY20 results ended 31 May showed substantial impact of COVID-19 on the business in the final quarter of FY20. Abano’s strategy for FY21 is centred on revenue growth, margin improvement and growing the profitability of the company.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
The sole motive of an investor is to grow his/her capital over a period to meet financial goals. In pursuit of this, investors are in a constant hunt for stocks that have capital appreciation potential and those that pay dividends, which one can reinvest to further increase the rate of return. Dividends can also be seen as an incentive for an investor to hold the stock for a longer duration of time, especially when the overall market enters a bear phase, or the underlying invested company goes through business troughs and peaks.
Stocks that have high dividend yield are considered to be a safe bet, but to take a blanket call just on dividend yield would be naive, as there is more to be analyzed to make a sound judgment on the ability of the business to keep paying a dividend over long periods.
Companies over time, increase dividend payout, and in the long term, an astute investor can reap high rewards by picking good dividend stocks, across sectors, thus diversifying and reducing the volatility of one’s portfolio. Investors in New Zealand can reap the benefit of dividend imputation credit and further increase their overall return on investment.
So, how should one pick a dividend stock? How to invest in stocks that have the wherewithal to not only pay a dividend but also increase dividend payout over the years?
With Kalkine, you will find answers to these questions, as we conduct a detailed analysis of companies based on quantitative and qualitative parameters.
Sound dividend stocks are investors' delight. They provide the benefits of capital appreciation and the joy of constant income despite the market volatility.