There are various solutions to this.
As you realize, like each different asset class,investing in penny stocksbrings with it dangers.
We’re not speaking about minimal danger the place you’ll lose 10-15% and accept a minimal loss. The penny shares universe has usually seen shares come down as a lot as 80-90% in a brief span of time.
For instance, penny shares like Premier Capital Providers, Superior Finlease, Future Retail and Evexia Lifecare are down over 80% from the degrees they have been buying and selling a 12 months in the past.
There are extra on this checklist…
That’s the reason, from the complete penny stocks list, solely a few them could be funding worthy.
Whereas penny shares are infamous and recognized for his or her illiquid standing, a choose few can ship huge good points in a brief span.
It isn’t unusual for a penny stock to climb as much as 5x, 10x or a whopping 100x in a brief span.
On this article, we have a look at the highest performing and worst performing penny shares over the previous one 12 months.
Let’s get began with the gainers first…
#1 Raj Rayon Industries
Buying and selling at lower than half a rupee a 12 months in the past, shares of Raj Rayon Industries have seen a meteoric rise over the 12 months passed by.
How massive good points are we speaking about? How a few whopping 6,165%?
Shares of the textile firm have risen from a mere ₹0.23 to ₹15 in a 12 months.
Raj Rayon’s December quarter outcomes have been out of the field the place it reported an enormous rise in income. It has a file of reporting losses for greater than seven quarters, however the firm turned worthwhile in December 2021.
The get together doesn’t appear to finish anytime quickly because the inventory continues to go up.
Information from BSE exhibits there are solely consumers ready on the sidelines to purchase the script, with no sellers prepared to promote their shares (at the least for now).
Apparently, promoters of Raj Rayon offloaded their whole holding within the March 2022 quarter. At current, promoters stake stands at nil.
Raj Rayon Industries is engaged within the enterprise of producing and buying and selling of polyester chips, polyester yarn and processed yarn.
#2 Cressanda Options
Cressanda Options is one other penny inventory which traded at lower than one rupee a 12 months in the past. It has delivered multibagger returns in 12 months.
Buying and selling at ₹0.6 again in June 2021, shares of the corporate at present trades at ₹34 with a marketcap of ₹13.4 bn.
This interprets into good points of greater than 5,400%.
Cressanda Options is an India-based firm engaged in offering data expertise (IT), digital media, and IT enabled companies.
There have been numerous developments up to now three months which may have triggered the sharp rally.
This 12 months, the corporate appointed Preeti Das as its new director. Das beforehand held senior management positions at Microsoft and Oracle Monetary Providers.
The corporate can be clinching massive offers from reputed shoppers. It entered into an settlement for offering tech-powered infrastructure options for unaddressed passenger expertise in India.
Extra lately, the corporate acquired a 100% stake in Bengaluru-based Lucida Applied sciences, to mark its maiden foray into the fields of synthetic intelligence (AI) and machine studying.
You understand how it’s…the corporate is foraying into new applied sciences and Mr. Market has already rewarded the corporate for doing so.
#3 Equippp Social
Third on the checklist is an organization engaged within the agri-commodities buying and selling and manufacturing, processing, and buying and selling of seeds.
Equippp Social’s stellar rally began in Could final 12 months when the shares have been quoted at lower than ₹5. What adopted subsequent was thoughts blowing. Shares of the corporate rose to ₹185 in simply 4 months!
The rally was brief lived as shares got here tumbling right down to lower than ₹100.
Nonetheless, if we see the efficiency within the 12 months passed by, Equippp Social shares have 2,800% good points to boast about.
The rally contrasts with the monetary efficiency however that’s the story with many of the penny shares.
For greater than 10 quarters, the corporate has reported zero gross sales and has solely reported a revenue in March 2021 quarter.
What’s extra, the corporate turned worthwhile in March 2021 however previous to that, it had eight consecutive years of losses.
It appears the low liquidity is the prime motive driving the inventory. As of March 2022, promoters of Equippp Social maintain round 97% stake.
Which penny shares have gained probably the most within the 12 months passed by?
Aside from the above, listed below are the most effective performing penny shares over the previous 12 months.
Shifting on to the highest losers, lets begin with Premier Capital Providers.
#1 Premier Capital Providers
It’s all slippery slope if you chart out the share worth chart of Premier Capital for the previous 12 months.
Right here’s the way it seems to be like:
From buying and selling at ₹40 again in June 2021, Premier Capital now trades at ₹6.
Premier Capital is primarily engaged within the companies of investing, shopping for, promoting, switch, and disposing of any shares, securities, properties, bonds, and so on.
#2 Future Retail
Down over 80% within the 12 months passed by, Future Retail is subsequent on our checklist.
A 12 months in the past, the corporate used to commerce at ₹70. Skip ahead to current, shares are locked in steady decrease circuits and at present trades at ₹8.
As issues stand now, it seems the corporate is ready for extra ache forward. The corporate is going through an insolvency petition filed by its lenders earlier than the Nationwide Firm Legislation Tribunal (NCLT) because it has dedicated defaults.
Over the previous couple of months, Future Retail has seen a number of top-level exits after the ₹247.1 bn take care of Reliance Retail was known as off. The exits embody the MD and firm secretary.
Including to stress is steady promoting by overseas buyers and mutual funds. Simply check out Future Retail’s shareholding sample and also you’ll see the modifications are fixed.
This definitely raises a purple flag.
Which penny shares have fallen probably the most within the 12 months passed by?
Aside from the above, listed below are the worst performing penny shares over the previous 12 months:
To conclude…
Now that you just’ve seen how penny shares could make or break your portfolio, certainly you should be looking out for penny shares to buy today.
So what’s stopping you from shopping for the highest penny shares in India?
Nicely, the added volatility as of late is one massive concern. It isn’t shocking that the majority retailinvestors have suffered heavy losses within the current market correction. Be it bluechip shares or midcap progress shares, lots of them have been taken to the cleaners.
So you possibly can think about what may occur if the penny inventory you’re holding in your portfolio comes into highlight for some fallacious causes.
What we’ll recommend is do not panic amid the volatility and keep on with a strong investing course of.
In penny inventory investing, it is crucial to differentiate betweengood penny shares which are funding worthyand those which are extremely speculative.
Retail buyers have a liking for penny shares as a result of they’re low priced, they usually can purchase giant chunks of those shares at low costs.
Additionally they just like the prospect of incomes multibagger returns within the brief time period.
However one ought to notice that the majority of those shares can haven’t any observe file of sound fundamentals, they are going to be saddled with debt, and have low promoter holding.
In a risky market (like the current one), be very selective and look out for basically sturdy penny shares that recurrently pay out dividends. This manner, your draw back shall be capped.
At all times look out for the corporate’s debt stage. A debt to fairness of decrease than 1 and even higher, debt free penny shares must be most popular.
With a transparent technique by your aspect, your journey can become comparatively extra snug. Who is aware of, these may be your multibagger penny stocks for 2025.
Joyful Penny Inventory Investing!
Disclaimer:This text is for data functions solely. It’s not a inventory advice and shouldn’t be handled as such.
(This text is syndicated from Equitymaster.com)
Supply: Live Mint