3 Penny Stocks to Keep an Eye on In May

Summary

  • Penny stocks generally suit investors who have high-risk tolerance and are not risk-averse.
  • As most retail investors cannot afford to buy large quantities in blue-chip stocks, they turn towards penny stocks
  • Penny stocks can be a solid high-growth stock if the fundamentals and governance of the company are promising.

Penny stocks or penny shares are those stocks that trade below £1 on the stock exchange for a decent amount of time and have a market cap of lower than £100 million. Penny stocks are usually of small companies and trade infrequently, which implies less liquidity. This result in wide bid-ask spreads, which can hurt an investor while buying or selling shares. These stocks generally suit investors who have high-risk tolerance and are not risk-averse.

Penny stocks always keep buzzing, and are there some reasons for it. The best strategy regarded to be successful in the market is 'buy low and sell high.' As most retail investors cannot afford to buy large quantities in blue-chip stocks, they turn towards penny stocks, giving them the illusion of a higher return as penny stocks have high volatility, resulting in a higher potential for reward an even higher level of inherent risk. Penny stocks can be a solid high-growth stock if the fundamentals and governance of the company are promising. The best example is Amazon which traded under $2 when it was listed in 1998. If investors look at the company's fundamentals and then place a bet, they would significantly increase the odds of them winning.

Copyright © 2021 Kalkine Media Pty Ltd.

Let us explore three penny stocks that have been buzzing through the pandemic and have given handsome return to investors in the last one year:

ValiRX PLC

ValiRX PLC (LON: VAL) operates basically as a life sciences company. The company mainly focuses on primary stage-associated biomarkers and therapeutic development. They work in the sale of Self-Test Drug Kits and Drug Development.

Recently, they have entered into a new agreement with Physiomics PLC for working towards the growth of prostate cancer treatment. Company’s Earnings have grown by 7.1 per cent on an average over the past five years.

The current share price is GBX 20.00 (as of 11:11 AM GMT+1 on 4 May 2021), and the market cap stands at £13.01 million. In last one year the stock has given investors’ a return of 90.48 per cent.

Eve Sleep PLC

Eve sleep PLC (LON: EVE) is an e-commerce business that sells beds and mattresses online. They prefer to manufacture their products and sell them directly to the consumer through online and local channels.

The firm’s business model mainly focuses on digital sales, social media marketing, and vital customer service. The firm, as of now, is operating in Austria, Switzerland, Belgium, France, Luxemburg, the US, Germany, France, and the UK. Earnings have grown 9 per cent per year on an average over the past five years.

The current share price of the stock is GBX 4.80 (as of 11:15 AM GMT+1 on 4 May 2021), and it has a market cap of £13.15 million. In last one year the stock has given investors’ a return of 238.13 per cent.

Alien Metals Ltd.

Alien Metals Ltd. (LSE: UFO) is primarily a mining and exploration project development company listed on the AIM (Alternative Investment Market) platform of the London Stock Exchange. The firm's primary focus is on precious base metals and commodities. The company follows a strategy led by acquisition and is managed by a high-quality geological team. Their main aim is to develop a well-built portfolio of diversified assets, which also has two recent acquisitions in western Australia in the previous year.

The company has also targeted 12 main exploration goals on its 12 mining sites in Mexico. The company has an exclusivity arrangement with Wombat Resources to acquire the silver tailings project at Elizabeth Hill in Western Australia in 2021. Alien metals have also raised £2.5 million to fund development and exploration costs across the portfolio. Earnings have grown 29.6% per year on an average over the past five years.

The current share price GBX 1.15 (as of 11:16 AM GMT+1 on 4 May 2021), and it holds a market cap of £41.1 million. In last one year the stock has given investors’ a return of 983.24 per cent.


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is not authorised or regulated by the Financial Conduct Authority to provide regulated advice. The purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. The Content is guidance about the different types of investments that are available and sets out general principles to continue before making investment decisions. Kalkine Media is neither authorised nor qualified to provide regulated investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from an appropriately authorised and/or qualified financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.