5 tech penny stocks returned over 50% in 6 months! Should you buy them?

Highlights

  • Tech penny stocks are expected to garner considerable investor attention driven by increased technology solution adoption beyond the pandemic.
  • These stocks lure investors due to consistent innovations and new launches.
  • Stocks like Tintra Plc and GRC International Group Plc have been in a rally mood for the last six months.

The technology sector was able to withstand the impact of the COVID-19 pandemic as enterprises across sectors rushed to technology services and solution providers to facilitate operations under challenging conditions and address the growing work-from-home requirements.

Investors are lured by tech penny stocks due to consistent innovations, as these companies are focused on continuously reinventing existing products and launching new ones. These developments often play a pivotal role in driving constant price shifts. Further, as the pace for digital transformation intensifies, tech companies are often touted for a bright future. The race for technology adoption across industries will continue to boost investor interest in this direction.

Here we take a look at five of the top tech penny stocks to buy.

Tintra Plc (LON: TNT)

Tintra Plc (formerly known as St James House Plc) offers IT management and payment services for lottery and e-commerce sectors. Tintra recorded revenues of £1.1 million for the year ended 31 January 2021, up by 11.6% from £873,000 in the previous year. The company’s gross profit declined by 24.8% to £326,000 to £245,000 for the year ended 31 January 2021, on account of high costs of implementation of Currency Cloud, a new payment platform for the payment processing division at the St Daniel House.

The shares of Tintra have given 87.5% return to the shareholders in the last 6-months, and its market cap stood at £3.50 million as of 19 August 2021.

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MobilityOne Ltd (LON: MBO)

MobilityOne is an e-commerce payment solutions and platforms provider. In May 2021, MobilityOne’s Malaysian subsidiary MobilityOne Sdn Bhd received a license to issue prepaid MasterCard cards in Malaysia.  

For the year ended 31 December 2020, MobilityOne’s revenues rose by 45.6% year-on-year to £246.7 million compared to £169.4 million in 2019, on account of higher bill payments and prepaid mobile phone airtime reload business sales in Malaysia. The company’s pre-tax profits more than doubled from £1.08 million in 2019 to £2.26 million in 2020.

The shares of MobilityOne have given a return of 87.0% to its shareholders in the last 6-month, and its market cap stood at £22.85 million as of 19 August 2021.

GRC International Group Plc (LON: GRC)

GRC International Group is a provider of IT risk management, compliance and governance solutions. For the six months ended 30 September 2020, the revenues of GRC International Group declined by 24% year-on-year to £5.4 million (H1 FY20: £7.1 million) due to the COVID-19 pandemic. However, the company reported a reduction in the underlying EBITDA loss by 56% to £0.8 million for the period (H1 FY20: £1.3 million loss). The net cash of GRC International at the end of the period was £0.2 million (H1 FY20: £0.3 million.

GRC International’s IT Governance opportunity pipeline in terms of value rose by 30% from £3.1 million at the end of FY20 to £4.0 million at the end of H1 FY21.

The shares of GRC International Group have given a return of 66.7% to its shareholders in the last 6-months, and its market cap stood at £42.47 million as of 19 August 2021.

Equals Group Plc (LON: EQLS)

Equals Group (earlier known as FairFX Group) offers IT services for foreign exchange and money management. In March 2021, Equals Group rolled out the new FairFX B2C 'Linked Cards' products with the aim to widen its B2C offering. 

Equals Group’s recorded revenues of £16.7 million for H1 2021 ended 30 June 2021, an increase of 21% year-on-year compared to £13.8 million in H1 2020, driven by the group's B2B initiatives and Equals Money product suite for corporates. During the period, its new business customer acquisition was 574, with the total active customer count on the platform reaching 5,644.

The shares of Equals Group have given a return of 58.0% to shareholders in the last 6-months, and its market cap stood at £97.71 million as of 19 August 2021.

Minds + Machines Group Ltd (LON: MMX)

In August 2021, Minds + Machines Group completed the sale of its TLDs and related assets to Registry Services LLC, an affiliate of GoDaddy Inc. 

Revenues of Minds + Machines Group for FY 2020 decreased to $16.8 million from $17.2 million in FY 2019, and operating EBITDA increased to $5.2 million in FY 2020 from $4.8 million in the previous year. Minds + Machines pre-tax profits stood at $2.99 million in FY 2020, slightly better than $2.98 in FY 2019.

The shares of Minds + Machines Group have given a return of 54.5% to the shareholders in the last 6-month, and its market cap stood at £74.42 million as of 19 August 2021.

CONCLUSION:

Growing demand for technology solutions aimed at the digital transformation of business operations in the wake of the rising number of security threats helped the sector endure the impact of the crisis.

The pandemic accelerated the pace of technology adoption for digital transformation across various sectors. Thus, bringing to light several new and upcoming technology vendors that offer innovative solutions. Investors are finding attractive investment opportunities in such tech penny stocks that trade at lower prices and have low market capitalisation but offer high returns to shareholders. Continued demand for technology solutions and services is expected to fuel investor interest in tech stocks in the coming months as well.

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