6 Penny Stocks That Gained 1,000%+ in One Year

Most of the stocks like largecap, midcap, smallcap or microcap have given excellent returns. In fact, some stocks delivered mind-boggling returns of 1,000% or more.

While there were 10 badgers in the midcap segment too, many stocks in the penny stock category gained so much that they were not a penny.

here is a list six penny stock Which has given a return of 1,000% or more in the last one year.

#1 Equip Social Impact (28,127%)

Equip Social operates a collaborative platform that brings together organizations such as NGOs, corporates and individuals to collaborate on socially relevant projects.

The company’s shares were re-listed in February 2021. Before the relisting, the company’s shares were trading in the name of Proceed India.

As Proseed India, it was engaged in the business of seed processing and commodity trading. In the seed business, the company failed to generate any revenue. It recorded continuous losses which got worse with each passing year. Poor financial performance led to its bankruptcy.

Since bankruptcy, the company has changed its name and business model. The company claims to be profitable, however the claims cannot be substantiated due to unclear financial reporting by the company.

So, nothing seems different as far as trading is concerned, yet the share price is up more than 28,000%.

A year ago the company’s shares were trading at a marginal 0.35 per share and trading today at 93.15 per share!

What could be the explanation for such a rally?

While we don’t know the factors that are responsible for such a rally, an important lesson from such incidents is that the absurdity in the stock market is more common than you might think.

#2 Radhe Developers (3,298%)

Radhe Developers is a real estate developer with presence in Ahmedabad and Gujarat. It develops residential, commercial, weekend homes and plotted projects.

was trading on the stock a year ago, on 2nd December 2020 9.1 per share. Since then, the stock has gained 3,298% and is currently . doing business on 309.6 per share.

Sharp fluctuations in stock prices contrast with the financial position of the company. For fiscal year 2021, the company’s revenue declined by 76.9%, while losses increased by 52.3%.

So what has caused this stock to rise sharply?

Government’s focus on affordable housing, low interest rates on home loans offered by banks and glut of residential flats. All these factors are in favor of the growth of the real estate industry. It is expected that the industry will grow at an annual rate of 75% for the next three years.

Could this be the reason behind the sharp rally witnessed in the stock? Perhaps.

#3 Jindal Poly Investment & Finance (2,469%)

Jindal Poly Investment & Finance is registered as a Principal Investment Company which means that it invests in other companies and has no other operations. The company earns revenue from dividends received from its equity investments.

As per the prevailing rules, a major investment company is bound to invest 90% of its capital through equity or debt in its group companies.

The company has a significant stake in its subsidiary Jindal India Powertech. Jindal India Powertech works in the power sector.

Shortage of energy supply against rising demand put power companies in focus and power stocks shot up significantly. Since, Jindal Poly has huge investments in the power sector, its earnings have increased due to the rise in the price of power shares.

Further, Jindal’s association with the company could have misled the investors to believe that the company is owned and managed by the Jindal Group which is not true.

A year ago, the company’s share price was 14.75 per share and is now at the share price 360 per share, an astonishing gain of 2,469%.

#4 Cosmo Ferrites (1,979%)

Cosmo Ferrites is engaged in the business of manufacturing soft ferrites. Soft ferrites find applications in electronic products such as inverters, transformers, energy meters, mobile chargers, etc.

The company announced that it will increase its production capacity from 2,400 MT to 3,600 MT 0.3 billion company has also been selected as a beneficiary of the PLI scheme for the white goods category.

In FY 2021, the company turned profitable and recorded its first profit in the last five years of operations. These developments were well accepted by the market and the share price went up manifold.

Shares were available at cheap price on 2nd December 2020 9.9 per share. Today, the shares are being quoted 196.1 per share, a massive return of 1,979%.

Although it turned profitable, the cash flow doesn’t reflect the same. The company could not generate cash from its operations. Furthermore, current liabilities are higher than current assets, which means that the company may face some problems in honoring its short-term obligations.

#5 Tata Teleservices (1,651%)

Tata Teleservices is an Indian telecommunications and broadband service provider based in Mumbai. It provides services through its two subsidiaries – Tata Tele Business Services and Tata Tele Broadband.

The company boasts of a wide reach in the enterprise segment with 1,500+ partners offering its solutions. The company has an operational presence in 60 cities in India.

As of 2017, Tata Teleservices offered mobile network services through Tata Indicom – one of its subsidiary – under the ‘Tata Docomo’ brand.

In 2017, after Jio disrupted the telecom industry, the company sold its mobile network business to Bharti Airtel citing huge losses and mounting debt. This was a lucrative deal for Bharti Airtel as it was asked to pay only a part of Tata’s dues related to spectrum.

As far as the financial position of the company is concerned, it has been burning cash since its inception and has never reported profit in 22 years of operation. Though the company is making loss, the losses have come down in the last few years.

trading on 6.9 per share in 2020, shares are now trading at 130 per share, i.e. a return of 1,651%.

It looks like investors rewarded the company’s strategic shift toward the enterprise segment. Another reason for investors’ interest in the company could be their belief that they are getting a ‘Tata’ company at a cheap valuation.

Huge AGR dues of 167.9 billion and declining revenue are red flags that an investor should not ignore before investing in this rising stock.

#6 Raghuveer Synthetics (1,797%)

Raghuveer Synthetics is in the business of processing textiles. It processes cotton, polyester, blended fabrics. It has sophisticated machines which can deliver 25,000 sheets in a month.

A year ago Raghuveer Synthetics shares were available here 26.1 per share. Today, the company’s stock price has reached a lifetime high. 470 per share. An increase of 1,797% in the last one year.

The sharp increase in the share price of the company can be justified by its financial position. The company’s revenue and profit grew by 88.1% and 136%, respectively, for the financial year ended March 2021.

The board of the company has recently approved the stock split from from 10 1. This could be another reason for the stock rally. Stock splits are generally done to make stocks more affordable to small retail investors and to increase liquidity. It refers to dividing the face value of the shares by the number of shares the company holds but the market cap remains the same.

The company can benefit from various initiatives taken by the government to strengthen the textile sector.

As of September 2021, the promoters of the company held 74.9% stake in the company, with no shares pledged.

Snapshot of a Multibagger Penny Stock from Equitymaster’s Stock Screener

The list does not end here. here is a list Multibagger Penny Stocks Obtained using our powerful stock screener.

Equitymaster’s stock screener lets you change the parameters as per your selection criteria. This will help you identify and eliminate stocks that do not meet your requirements and emphasizes stocks that do meet the metrics.

How to Go About Investing in Penny Stocks?

For starters, start with risk profiling to assess your risk appetite and to know if you will be able to tolerate the volatility that comes with penny stocks.

If you consider yourself conservative and don’t like to take big risks, give up on penny stocks.

If you invest in penny stocks, don’t bet your entire capital on it. Invest only 5-7% of your total capital.

Also, you need to separate ‘men’ from ‘boys’. Invest in businesses that can grow. A good example of this might be Titan. It’s gone from the ups of 1.35 in the year 2000 2,386.5, its current price.

To zero in on stocks like Titan, you need a very strong framework.

Luckily, we have the outline ready for you. You can check it out here: Your Ultimate Guide to Penny Stock Investing,

Happy Penny Stock Investing!

This article is syndicated from Equitymaster.com