Investing in penny stocks can help individuals supercharge their long-term capital gains. Here’s a selection of hot small-cap growth shares I’m keeping an eye on.
Aquila Energy Efficiency Trust
Buying companies that help reduce carbon emissions might be a great idea as the world accelerates its green agenda. This is why Aquila Energy Efficiency Trust is on my watchlist today.
This penny stock invests in energy efficiency projects across private and public sectors. We’re talking about solar and wind power assets, biogas plants, and schemes to improve insulation and heating in residential buildings, to cite a few examples.
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Adverse changes to environmental legislation could affect future revenues at Aquila. But current legislative momentum suggests the business — which funds projects across the EU and in the UK — is in great shape.
Hummingbird Resources
Purchasing gold shares could pay off handsomely during this time of high inflation and elevated macroeconomic and geopolitical uncertainty. The yellow metal remains strong, at around $2,000 per ounce, and could be set for new record peaks.
I think Hummingbird Resources could be a great way to play this theme. The business produces gold in Mali and is scheduled to commence output in Guinea in the current quarter. As things stand it’s set to double metal production and pull down production costs, a double win for group earnings.
There’s no guarantee that gold prices will climb further, of course. In fact, a sharp reversal could put a big dent in Hummingbird’s profits column. But on balance, I still find the gold digger an attractive buy right now.
Likewise Group
Floor coverings supplier Likewise Group might struggle as the UK economy cools and businesses reduce spending.
Yet its ability to continue gaining market share is highly encouraging. In fact, I think earnings here could rise strongly following significant investment and acquisition activity of the last year. Measures to supercharge capacity for example lifted revenues 19.7% in the first quarter.
Last year, Likewise opened new logistics centres all over the country in 2022 to improve its geographic footprint. It also expanded its sales time to ramp up revenues. I feel its strong balance sheet should enable it to keep its exciting growth strategy going.
DP Poland
Weak consumer spending power poses a risk to retail businesses. Yet recent strong trading at DP Poland suggests the food delivery giant could thrive in spite of the tough trading environment.
This penny stock has exclusive rights to Domino’s Pizza master franchise agreement in Poland and Croatia. And in the first quarter, like-for-like revenues soared 19.2% from the same 2022 period.
DP Poland has two major weapons in its arsenal. The colossal brand power of Domino’s Pizza is pulling in large numbers of customers to its delivery and dine-in businesses. And it’s focused on territories where disposable income levels should rise strongly over the long term.
