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Highlights
- Investors with high-risk appetite put their money in penny stocks to generate exponential growth as these stocks offer the chance to double, triple or quadruple their money.
- Penny stocks carry a higher risk of frauds and pump and dump schemes than other stocks.
Most stocks markets around the world have slipped into red due to various challenges starting from Russia-Ukraine crisis, inflation to pandemic aftermaths. Investing in stocks in such a situation can be tricky and risky and investors need to do a thorough study before the investment.
Penny stocks are a class of low-price and high-risk companies, usually investors with high-risk appetite invest in penny stocks to generate exponential growth, as it offers the chance to double, triple or quadruple their money.
In the UK, penny stocks are the shares of companies trading for less than £1, with a market capitalisation of below £100 million. Investors may think that penny stocks carry low risk when prices are low, but these stocks tend to carry a higher risk of frauds and pump and dump schemes than stocks trading on major stock exchanges. On the other hand, the good part about investing in penny stocks is that the companies, which are mostly smaller in size and mcap, have a lot of opportunities to grow.
Let’s look at five penny stocks that you may consider for diversifying your portfolio.
- Serabi Gold Plc (LON: SRB)
Serabi Gold is a gold exploration and production company, engaged in the evaluation and development of gold deposits in Brazil. The market cap of the company stands at £41.65 million, and it has provided a return of -38.46% to its shareholders in the last one year as of 14 February 2022. Serabi Gold Plc’s shares closed trading at GBX 56.00, up by 1.82%, on 14 February 2022.
- Real Estate Investors Plc (LON:RLE)
Real Estate Investors Plc is a real estate investment trust (REIT) that invests in the real estate assets in different zones of Britain. The market cap of the company stands at £71.75 million, and it has provided a return of 20.59% to its shareholders in the last one year as of 14 February 2022. Real Estate Investors Plc’s shares closed trading at GBX 40.00 on 14 February 2022.
Also Read: Pendragon, Restaurant Group, SIG: Hot penny stocks for February
- Duke Royalty Limited (LON: DUKE)
Duke Royalty Limited provides non-dilutive capital and non-refinancing risk to large and small companies across the UK and European countries. The market cap of the company stands at £146.21 million, and it has provided a return of 42.73% to its shareholders in the last one year as of 14 February 2022. Duke Royalty Limited’s shares closed trading at GBX 40.25, down by 1.25%, on 14 February 2022.
- Morses Club Plc (LON: MCL)
Morses Club Plc is a relation-driven consumer finance provider that specializes in loans, home collected credit, online lending, lending financial services, home loans, personal loans, cash loans, e-loans, home collected loans and digitals. The market cap of the company stands at £65.20 million, and it has provided a return of -13.23% to its shareholders in the last one year as of 14 February 2022. Morses Club Plc’s shares closed trading at GBX 47.55, down by 1.96%, on 14 February 2022.
- DP Eurasia N.V. (LON:DPEU)
DP Eurasia N.V. operates as Domino’s Pizza franchisee in Russia, Turkey, Georgia, and Azerbaijan. The market cap of the company stands at £118.19 million, and it has provided a return of 65.92% to its shareholders in the last one year as of 14 February 2022. Morses Club Plc’s shares closed trading at GBX 81.30 on 14 February 2022.
