VTU, BRD, EBQ: Should you invest in these penny stocks now?

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Highlights 

  • Penny stocks are generally listed on the FTSE AIM index and offer investors high rewards.
  • Penny stocks like Vertu Motors, Bluerock Diamonds, Ebiquity Plc are mostly in the growth stage of the industry cycle.

The stocks trading below £1 in the UK stock market are usually termed Penny stocks. These stocks are generally listed on the FTSE AIM index and offer investors high rewards, though they also possess high risk. Most of these companies are in the industry cycle’s growth stage, and investors look to invest in these companies to make a high return on investment.

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Let us look at 3 FTSE listed penny stocks and their investment prospects:

Vertu Motors Plc (LON: VTU)

FTSE AIM-listed company operates automotive dealerships in the UK, selling new and used cars, motorcycles, and commercial vehicles. It has more than 150 retail outlets and sells vehicles of leading car manufacturers. The company has expanded its business and added 29 new outlets since 1 December 2020.

For the year ended 28 February 2022, Vertu Motors’ board expects its adjusted profit before tax of not less than £75 million. The growing consumer demand for the electric vehicle could generate significant revenue for the company in the long run as it sells battery and hybrid vehicles of leading EV brands.

Vertu Motors Plc currently trades at GBX 67.20, up by 1.82% on 29 March 2022 at 11:15 am GMT+1, with a market cap of £236 million. The stock has given a 71.43% return to its shareholders in the last one year.

Bluerock Diamonds Plc (LON: BRD)

The company is engaged in the exploration and development of diamond mines. Its main asset is located in the Kimberley region of South Africa.

Bluerock Diamonds’ reported a consistent recovery in its production output in 2021. It produced 23,497 carats of diamonds in 2021, a rise of 53% compared to the last year. Also, it reported USD 10.8 million in revenue in 2021. The economic recovery after the Covid-19 pandemic has also led to demand revival in the diamond industry. As a result, the company has increased its revenue guidance and expects USD 16m to 17.2m in revenue in 2022.

Bluerock Diamonds Plc currently trades at GBX 60.50, down by 3.20% on 29 March 2022 at 11:15 am GMT+1, with a market cap of £8.83 million. The stock has given a 33.98% return to its shareholders in the last one year.

Ebiquity Plc (LON: EBQ)

The UK-based company provides media consultancy and marketing services to its clients. In 2021, the company announced the acquisition of Canada-based Forde and Semple Media Works, a leading media consultancy firm.

Ebiquity’s business is expected to report 12% year-on-year growth with underlying operating profits of not less than £4.7 million. The company will announce its full-year results on 30 March 2022.

Ebiquity Plc currently trades at GBX 55.50, down by 0.80% on 29 March 2022 at 11:15 am GMT+1, with a market cap of £46.15 million. The stock has given a 77.60% return to its shareholders in the last one year.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


 

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