Some Penny Stocks Worth Watching in The Current Scenario

Some Penny Stocks Worth Watching in The Current Scenario

Summary

  • Lesser price and lower market capitalisations are characteristics of Penny stocks
  • Investments in businesses with innovative solutions could yield best returns in the long term
  • Businesses with solutions which could disrupt the market or could carve a niche through innovation can be called the potential investment opportunity
  • There are many penny stocks which have given triple-digit returns during the Coronavirus crisis

In the stock market sphere, a penny share is characterised by lesser price, lower market capitalisation. These stocks usually trade on most of the recognised stock exchanges and are popularly known as micro-cap stocks. As a convention in the UK stock market, any stock priced under 100 pence or GBX 100 is classified as a penny stock, though there are no fixed criteria for that. In addition, penny stocks are also characterised by the large spread between the bid and ask quotes and lesser liquidity.    

Many investors are not aware of the importance of liquidity in these investments. The daily traded volume of shares represents the liquidity in a stock. If the volume in a stock is high, this would lead to a lower spread between the bid and ask quotes of the stock. In addition, less liquidity could also trigger price manipulations in the prices of stock, known as market-making through triggering large orders.

Penny stock investments accompany various risks such as lack of liquidity, higher bid/ask spreads, limited information on the shareholding pattern. These risks primarily differentiate these investments from other large-cap and mid-cap stock investments.

However, it is also true that investment in penny stocks has handed a gargantuan amount of return to investors, and this is what which keeps them in the hunt for these kinds of opportunities. It is therefore recommended for investors to carry out proper research or seek professional guidance while taking exposure in these securities. In the United Kingdom, penny stocks are mostly quoted on the FTSE AIM All-Share index of the London Stock Exchange.

It is hard to separate the diamonds from the rough. Businesses with solutions which could disrupt the market or could carve a niche through innovation could be the potential investments. Another factor which could be useful in identifying the right penny stocks is the share-holding pattern, which would indicate previous shareholding pattern by institutional investors as well as good promotor. Investments should be made in liquid stocks, meaning stocks with higher trade volumes.

 

Let us discuss some penny stocks which have yielded triple-digit returns even in these unprecedented times during Covid-19 outbreak.

  • E-Therapeutics Plc (LON: ETX)

E-Therapeutics Plc is a UK based Pharmaceuticals & Biotechnology group which facilitates drug discovery through its algorithm-based platform. In the present scenario, this platform can be called one of its kind.

E-Therapeutics shares closed at GBX 3.10 on 31st December 2019. On a Year to Date (YTD) basis, the stock delivered a price return of 472.58 per cent. The market capitalisation has gone up manifolds in the last one year as the share prices of the company have soared rapidly. E-Therapeutics Plc’s shares have enough liquidity as the volume stood at 429,922. The stock’s volatility is inverse to that of the benchmark index due to a negative beta of 1.15.

E-Therapeutics Plc shares were trading at GBX 17.50 at the time of writing before the market close (at 11:33 AM GMT+1) on 16th June 2020, down by 1.41 per cent versus the previous day closing price. Stock's 52-weeks High is GBX 21.75, and 52-weeks Low is GBX 1.50. E-Therapeutics Plc’s market capitalisation stood at £57.23 million.

 

  • Omega Diagnostics Group Plc (LON: ODX)

In the environment of contagious diseases, allergies, and food intolerance, Omega Diagnostics Group Plc facilitates comprehensive testing, which is of key importance in the present scenario. The company seems to have a differentiated product in comparison to its competition which could help it in gaining a lot of market share.

Omega Diagnostics Group’s shares closed at GBX 14.40 on 31st December 2019. The company’s shares closed at GBX 55.00 on 15th June 2020, and on a Year to Date (YTD) basis, the stock delivered a price return of 281.94 per cent. The market capitalisation has gone up manifolds in the last one year as the share prices of the company have soared rapidly. Omega Diagnostics Group Plc’s shares have enough liquidity as the volume stood at 1,419,170. The stock has been highly volatile in comparison to the benchmark index as its beta stood at 5.56.

Omega Diagnostics Group Plc shares were trading at GBX 54.50 at the time of writing before the market close (at 11:44 AM GMT+1) on 16th June 2020, down by 0.91 per cent versus the previous day closing price. Stock's 52-weeks High is GBX 73.50, and 52-weeks Low is GBX 6.75. Omega Diagnostics Group Plc’s market capitalisation stood at £82.84 million.

 

  • Indivior Plc (LON: INDV)

Indivior Plc facilitates drug development to cure disorders caused by alcohol and opioid. It is the UK based Pharmaceuticals & Biotechnology company. The company operates in a very niche segment and has a lot of potentials to grow further.

Indivior Group’s shares closed at GBX 39.00 on 31st December 2019. The company’s shares closed at GBX 72.50 on 15th June 2020 and on a Year to Date (YTD) basis, the stock delivered a price return of 83.54 per cent. The market capitalisation has gone up manifolds in the last one year as the share prices of the company have soared rapidly. Indivior Plc’s shares have enough liquidity as the volume stood at 517,240. The stock remains less volatile in comparison to the benchmark index as its beta stood at 0.26.

Indivior Plc’s shares were trading at GBX 73.70 at the time of writing before the market close (at 11:54 AM GMT+1) on 16th June 2020, up by 1.66 per cent versus the previous day closing price. Stock's 52-weeks High is GBX 72.50, and 52-weeks Low is GBX 34.00. Indivior Plc’s market capitalisation stood at £531.02 million.

 


Disclaimer
The website https://kalkinemedia.com/uk is a service of Kalkine Media Ltd, Company Number 12643132. The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

 

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