Which 5 NZX cheap stocks can be looked at in 2022?

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Which 5 NZX cheap stocks can be looked at in 2022?

 Which 5 NZX cheap stocks can be looked at in 2022?
Image source: Vitalii Vodolazskyi, Shutterstock

Highlights

  • Penny stocks trade at a low price and are risky stocks.
  • WDT expects its revenue growth to be nearly US$60 million in FY22.
  • ARB expects Brazil’s earnings to rise more than 50% in FY23 due to stronger pricing for both eucalyptus and pine seedlings, and increased sales.

Penny stocks are less expensive to invest in because they trade for less than a dollar. As a result, penny stocks can be purchased without risking a significant amount of money.

A small increase in the price of a penny stock could result in a large profit percentage, which is not always the case with larger companies.

As we step into the new year, let’s skim through 5 NZX stocks that can be considered in 2022.

 

5 NZX cheap stocks and their details

Image source: © 2021 Kalkine Media®, Data source- Refinitiv

Wellington Drive Technologies Limited (NZX:WDT)

Leading the IT sector in IoT solutions and devices, WDT, expects its revenue to be nearly US$47 million and EBITDA before unusual one-off items to be nearly $3.9 million in FY21. 

RELATED READ: Which are the 4 fastest growing NZX stocks to explore in 2022?

The revenue is likely to be at its highest despite it being hindered by component shortages and factory production capacity limits. Revenue is likely to grow in FY22 with its growth projected at nearly US$60 million.

WDT ended the day 5.13% in green to close at $0.205. 

Bremworth Limited (NZX:BRW)

A leading manufacturer of carpet and flooring, Bremworth, took bold steps to execute its all-wool and natural fibres’ strategy in FY21.

RELATED READ: Are there any NZX shares to be explored under NZ$1?

The Group’s revenue was down 5% in FY21 due to its decision to exit synthetics. However, it saw strong growth in wool carpet sales in H2 because of strong consumer demand in NZ and Australia.

BRM has a robust balance sheet and remains well funded to execute its 5-year plan.

BRM ended the day 1.37% in red to close at $0.72.

 

The New Zealand Refining Company Limited (NZX:NZR)

Functioning as an independent fuel infrastructure entity, The New Zealand Refining Company recorded RAP throughputs of 1.6 Mbbls in September/October 2021, which was 37% lower than the same period previous year due to Auckland's Level 4 and Level 3 lockdowns.

In addition, the Group raised almost $48.5 million in fresh equity, including a $39 million placement of additional shares last month, to finance private storage facilities and those under negotiation.

NZR ended the day 2.17% in green to close at $0.94.

ArborGen Holdings Limited (NZX:ARB)

Engaged in forestry genetics, Arborgen Holdings delivered a 59% increase in its revenue within the US and Brazil at $4.6 million in H1 FY22.

DO READ: Which are top 5 NZX small-cap stocks of 2021?

After completing the sale of its Australian and NZ business for $22.25 million, ARB notified that it has also paid back US$2.88 million of debt raised in 2019 to finance the purchase of ArborGen’s headquarters worth US$14.4 million in South Carolina.

ARB expects Brazil’s earnings to rise more than 50% in FY23 due to stronger pricing for both eucalyptus and pine seedlings, and increased sales.

ARB ended the day 3.64% in red to close at $0.265. 

Geo Limited (NZX:GEO)

Geo, a software as a Service (SaaS) business, reported strong customer growth and registered the second-highest new sales quarter in Q1 FY22. Geo saw a 286% rise in its new customers and a 176% increase in new licences in H2 FY21 on pcp.

ALSO READ: Why to explore 5 NZX technology stocks ahead of 2022?

The Group also finished both of its earlier announced placements on 2 December, concluding its capital raising of $7 million. Geo plans to attain 40%-50% ARR growth in increasing marketing spending and expanding partner channels in FY22.

GEO ended the day 0.71% in green to close at $0.141.

Bottom Line

Penny stocks majorly have low-market capitalisation and trade in less quantity. However, they also have the ability to give multi-bagger returns to investors.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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