Why the 4 NZX Penny stocks are in green zone

Summary

  • Penny stocks are small companies with less capital but trade at cheaper price and are volatile in nature.
  • Chatham Rock Phosphate provided an additional extension to private placement last date until 17 July 2021.
  • In its trading performance last month, Geneva Finance’s pre-tax profit stood at NZ$6.9 million.

Small companies with limited capital and greater level of volatility are known as penny stocks. Penny stocks are often unpredictable, and apt for investors with an appetite for risk tolerance. 

However, these stocks are cheaper to invest as they trade under $1. So, one can invest in the penny stocks devoid of squandering any substantial amount of money.

A minor share price appreciation in penny stocks could be followed by a massive profit percentage, which is often not experienced with bigger players.

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Here are four NZX listed penny stocks that investors can consider putting under their watchlist.

Cavalier Corporation Limited (NZX:CAV)

Broadloom wool carpet manufacturer Cavalier Corporation Limited notified the market on 10 June that NZ RegCo had permitted a waiver to the Company from NZX Listing Rule 1.11.4 (Rule).

The Rule otherwise requires the Company to get approval by an Ordinary Resolution to make a complete payment of retirement allowance to one of its Directors, Grant Biel.

By the end of the trading session on 11 June, Cavalier Corporation climbed by 3.70% at NZ$0.42.

Did You Read; 5 hot NZX penny stocks trading under $1

Chatham Rock Phosphate Limited (NZX:CRP)

Mineral explorer and producer Chatham Rock Phosphate Limited made a headline on 11 June by declaring an additional extension to private placement last date until 17 July 2021.

The new last date would provide enough time for the TSX to finalise the agreement procedure for the acquisition of Avenir Makatea.

Last month, the Company notified on 4 and 31 May that it had gained a third extension from the TSX of the closing date to conclude the earlier notified non-brokered private placement.

On 11 June, Chatham Rock Phosphate closed the market session, up by 2.50% at NZ$0.123.

Do Read; 5 NZX Stocks To Watch Out For- DOW, SPG, CRP, ARV, ENS

Geneva Finance Limited (NZX:GFL)

Financial services provider Geneva Finance Limited notified the market on 31 May about its trading performance.

Geneva Finance’s pre-tax profit stood at NZ$6.9 million, increasing by 67% due to enhanced contributions from various business divisions. Especially, from Quest Insurance, which reported a profit of 89% on pcp.

Geneva Financial Services noted an increase of 14% pretax profit on pcp. Federal pacific Tonga, 60% owned by the Company, registered a pre-tax profit of NZ$1.4 million. Stellar Collections noted a profit of NZ$0.3 million, up by NZ$0.2 million.

The Company winded up the trading session on 11 June in green. Geneva Finance’s shares grew by 1.54% from its last close at NZ$0.66. 

Did You Miss Reading; 5 Hot NZX Penny Stocks who are Dividend Payers as well

Marlborough Wine Estates Group (NZX:MWE)

The producer of some of NZ’s quality Marlborough Sauvignon Blancs, Marlborough Wine Estates Group, last updated about its performance in April.

As per the update of 16 April 2021, the harvest declined by nearly 26% compared to the last year’s vintage record and around 20% on average anticipated tonnes.

The decrease in the yield will lessen the volume of grapes and bulk wine available for the consumers and would also affect the Company’s profitability negatively in this fiscal year.

However, Marlborough anticipates attaining higher price/tonne on the basis of district average price surge to partly balance the projected revenue loss.

On 11 June, post the market session, Marlborough Wine Estates increased by 1.75% from its last closing price and stood at NZ$0.29.

Also Read; 5 NZX stocks you need to focus on- MWE, PFI, TAH, AIR, PX1

Why to invest in penny stocks if they can prove to be a hit or miss?

Penny stocks deserves to be included in an investor’s portfolio because of their capability to develop into multibaggers (generating profits in manifold of the total investment made).

However, considering the risk factor involved in the penny stocks, it would be wise to research about the companies to check their prospects of turning into profit generators.

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