This penny stock just signed a deal with Royal Dutch Shell!

It’s not often that an AIM-listed penny stock pens a deal with a FTSE 100 (INDEXFTSE:UKX) giant, but it’s happened today. Paul Summers has the details.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

A penny stock penning an agreement with a FTSE 100 juggernaut is a pretty rare thing. And when it happens to a stock I already own, I’m even more inclined to notice it. Hence, I was delighted to read the latest news release from eye-tracking tech firm Seeing Machines (LSE: SEE) this morning.

Ringing endorsement for this penny stock

As deals go, this is top drawer stuff. Today, Seeing Machines announced a global framework agreement with top-tier oil giant Royal Dutch Shell to provide its distraction and fatigue tech — otherwise known as Guardian — to the latter’s fleet as part of its overall risk management plan.

Given that its workforce covers an estimated 500m kilometres every year (and what they are transporting tends to be rather flammable), this agreement makes clear sense from a safety perspective.

Should you invest £1,000 in Next right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Next made the list?

See the 6 stocks

Naturally, it will take some time to fully implement this agreement. According to today’s statement, the installation of Seeing Machines’ tech is likely to begin this year. However, the sheer scale of Shell’s operations means the rollout might take “several years“.  

Still, an endorsement from Shell is hugely significant in my eyes. If you have one of the UK’s largest listed companies making it clear how much importance they place on driver safety, I think it’s fair to expect others to follow suit.

Naturally, it’s very easy to become biased on stocks one already owns. However, with the company being the global leader in this space, I do find it hard to be neutral on the outlook for this part of Seeing Machines’ business. 

Great outlook

Of course, today’s agreement is just one reason why I continue to hold the stock. Seeing Machines actually has its fingers in many pies at the moment. And, for me, the Guardian part of the business is actually the least exciting part.

The one that really grabs my attention is the huge earning potential of its automotive division. Back in August, the penny stock reported on the commencement of royalty revenues as over 100,000 vehicles loaded with its driver monitoring system (DMS) tech left showrooms. With the introduction of new legislation likely to boost demand, the company has already identified more than A$900m in potential revenue that it could/will now bid for.

On top of this, Seeing Machines has also been making moves into the aviation sector. This is the beauty of distraction-detecting tech — the sheer number of potential applications is hard to fully comprehend.

Long-term winner?

Naturally, any investment involves risk. Seeing Machines is no exception. Despite having a market cap of around £350m, this AIM-listed business is still unprofitable. This makes it particularly susceptible to general sell-offs. During the last market crash, for example, SEE’s share price fell from 5.5p in January 2020 to just 1.7p in March. It’s now at 9.8p, highlighting the huge volatility penny stock hunters should expect. One also can’t discount the possibility of future cash calls further down the line.

Along with would-be nickel miner Horizonte Minerals, however, Seeing Machines is one of few shares in my portfolio that I consider to be both very risky but also worth holding for the long term.

Time will tell if I’m fantastically right, utterly mistaken, or somewhere in between. For now, I’ll simply conclude that today’s news means I won’t be selling this penny stock anytime soon.  

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Paul Summers owns shares in Seeing Machines Ltd and Horizonte Minerals. The Motley Fool UK owns shares of and has recommended Seeing Machines Ltd. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Person holding magnifying glass over important document, reading the small print
Investing Articles

I think shares in this FTSE 100 company are undervalued right now

After a series of acquisitions, Informa’s balance sheet is loaded with goodwill. But is this hiding the true value of…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Here are the FTSE 100 shares that have outperformed the S&P 500 since 2020

A surprising number of FTSE 100 stocks have outperformed their S&P 500 counterparts over the last five years. But can…

Read more »

Mature black woman at home texting on her cell phone while sitting on the couch
Investing Articles

Prediction: in 12 months the recovering Vodafone share price could turn £10,000 into…

Harvey Jones has been watching the Vodafone share price slide for so long that he can't come to terms with…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Down 35% with a 5% yield! Is this the cheapest dividend stock on the FTSE 250?

Mark Hartley considers the income potential of a FTSE 250 dividend stock that looks to be trading well below its…

Read more »

Black woman using smartphone at home, watching stock charts.
Investing Articles

£10,000 invested in Lloyds shares 6 months ago is now worth…

Lloyds shares appear to be plateauing after surging beyond market expectations over the past year. Dr James Fox takes a…

Read more »

Portrait of pensive bearded senior looking on screen of laptop sitting at table with coffee cup.
Investing Articles

This old-school tech stock is beating all Magnificent 7 shares in 2025, including Nvidia

Shares in this old technology company are soaring in 2025, outperforming Nvidia stock and many other popular tech investments.

Read more »

This way, That way, The other way - pointing in different directions
Investing Articles

Prediction: in 12 months the under-achieving Legal & General Group share price could turn £10k into…

Harvey Jones expected better from the Legal & General share price, but he has no complaints about the FTSE 100…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

See the latest BP share price and dividend forecasts

Harvey Jones examines the outlook for the BP share price after what's been a tough year. The yield's climbed nicely…

Read more »