The United Kingdom's market has been experiencing some turbulence, with the FTSE 100 index recently closing lower due to weak trade data from China, highlighting global economic challenges. Despite these broader market fluctuations, investors often find opportunities in lesser-known areas such as penny stocks. Although the term 'penny stock' might seem outdated, it still signifies smaller or newer companies that can offer substantial growth potential when backed by strong financials and fundamentals.
Overview: Supreme Plc is a company that owns, manufactures, and distributes batteries, lighting, vaping products, sports nutrition and wellness items, and branded household consumer goods across the UK, Ireland, the Netherlands, France, rest of Europe, and internationally with a market cap of £174.97 million.
Operations: The company's revenue is derived from several segments, including Vaping (£77.29 million), Branded Household Consumer Goods (£67.25 million), Batteries (£42.00 million), Sports Nutrition & Wellness (£18.52 million), and Lighting (£17.13 million).
Market Cap: £174.97M
Supreme Plc, with a market cap of £174.97 million, demonstrates financial stability and growth potential in the penny stock category. The company is debt-free, having reduced its debt from a 594% debt-to-equity ratio five years ago to none today. Its earnings have grown significantly by 32.7% over the past year, surpassing both its five-year average of 22.3% and industry performance. Supreme's short-term assets (£70.1M) comfortably cover both short-term (£38.2M) and long-term liabilities (£14.2M). Despite high-quality earnings and strong return on equity at 36.5%, future earnings are forecasted to decline by an average of 9% annually over three years.
Overview: Liontrust Asset Management Plc is a publicly owned investment manager with a market cap of £252.88 million.
Operations: The company's revenue is primarily derived from its Investment Management segment, which generated £180.38 million.
Market Cap: £252.88M
Liontrust Asset Management, with a market cap of £252.88 million, offers stability in the penny stock arena due to its debt-free status and seasoned management team with an average tenure of 9.5 years. The company's short-term assets (£267 million) comfortably cover both short-term (£185.8 million) and long-term liabilities (£11.6 million). Despite a large one-off loss impacting recent financial results, Liontrust's net profit margins have improved slightly from 7.5% to 8.1%. However, earnings growth has been negative over the past year and five years, although future earnings are expected to grow by approximately 22.69% annually according to analyst forecasts.
Overview: Stelrad Group PLC manufactures and distributes radiators across the United Kingdom, Ireland, Europe, Turkey, and internationally with a market cap of £169.38 million.
Operations: The company's revenue is primarily derived from its manufacture and distribution of radiators, totaling £290.58 million.
Market Cap: £169.38M
Stelrad Group, with a market cap of £169.38 million, shows resilience in the penny stock category through solid financial metrics and strategic debt management. The company's EBIT covers interest payments 4.9 times over, and its net debt to equity ratio has significantly decreased from 867.3% to 134.8% in five years, though it remains high at 102.5%. Earnings grew by 7.1% last year, surpassing industry averages despite slowing from a five-year growth rate of 23.4%. Stelrad's short-term assets exceed both short- and long-term liabilities, supporting its stable financial position amidst an unstable dividend track record and high-quality earnings profile.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include AIM:SUP LSE:LIO and LSE:SRAD.
