350-1,050% return in a year. Are these 3 penny stocks still a buy?

Highlights

  • Penny stocks look attractive to new investors as they get an opportunity to buy a large quantity of shares at low prices with limited available funds.
  • ADVN’s board sees momentum in the underlying business and expects robust performances in the upcoming financial year as well.

Stock market investors use various strategies to generate a high return on their investment. Some invest in reliable blue-chip companies that have a proven business model and give a consistent and stable return on investment, while some invest in small companies currently in the growth stage, having low stock prices that are popularly known as penny stocks. There are many penny stocks on London Stock Exchange (LSE) like ADVFN Plc, PetroNeft Resources Plc and Zephyr Energy Plc that have been rallying and still hold good potential.

Penny stocks look attractive, especially to new investors, as they get an opportunity to buy a large quantity of shares at low prices with limited available funds, eventually seeking to make a high return on investment. However, all penny stocks don’t perform as per the investors’ expectations. Some of them erode investors wealth due to a sharp decline in stock prices as the company’s underlying business model is not much profitable.

In-depth research about the company’s business and growth prospects followed by the latest development in the sector can help in the potential right pick.

Penny Stocks to invest

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Let us look at 3 FTSE listed penny stocks that have given substantial returns and strong investment prospects:

ADVFN Plc (LON: AFN)

The company operates a financial information website providing market data and information about the global stock markets, currency markets, and other markets, including cryptocurrency. It has operations across several countries, offering financial data of more than 80 stock markets.

The company operates a financial website that is viewed by millions of users. As a result, the user subscription and advertising income are major revenue segments for the company. For the financial year ended 30 June 2021, the company reported a user base of close to five million.

The company’s board expects revenue of £9 million for the financial year with estimated profit before tax near to £1.6 million. The company will publish its audited financial results in November 2021.

In the last one year, the company’s stock has given a 362% return to shareholders. ADVFN Plc’s current market cap stands at £17.89 million as of 18 October 2021.

As per the company’s board, its underlying business has momentum, and it expects robust performances in the upcoming financial year as well.

PetroNeft Resources Plc (LON: PTR)

FTSE AIM-listed company operates in the oil and gas segment. It is engaged in the exploration and development of different projects in Russia.

The company reported gross production of 1,967 bopd, a rise of 25% in the first six months of 2021.  As a result, it reported consolidated revenue of USD 2.5 million and gross profit of USD 0.647 million. In addition, the company is developing a portfolio of low-risk projects to enhance its production output.

In the last one year, the company’s stock has given a 470% return to investors. Still, the company can grow further as the recent rise in crude oil prices in the international market will benefit its revenue and profitability in upcoming quarters.

PetroNeft Resources Plc’s current market cap stands at £39.60 million as of 18 October 2021.

Zephyr Energy Plc (LON: ZPHR)

The company invests in oil and gas resources. Its key project is located at Rocky Mountain in the United States. The company also has over 25,000 acres project in Paradox Basin in Utah.

The company acquires distressed assets in the oil and gas sector and turnaround the company’s business to generate high returns. At present, the company has a portfolio of five assets located in the US. The company also claims to have 100% carbon neutral operations by purchasing Verified Emission Reductions (VERs) from sustainable producers.

In the last one year, the company’s stock has given a 1,043% return to investors. Its strong portfolio of oil producing projects that will continue to generate cash for the company indicates that it still has potential.

Zephyr Energy Plc’s current market cap stands at £94.26 million as of 18 October 2021.

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