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Penny stocks can be part of a well-diversified portfolio. The risks are higher, but the returns can be explosive.
Here are two top penny stocks. london stock exchange. In my view, these stocks have great potential.
in a strong position
First, hVIVO (LSE:HVO).
A small healthcare company that provides clinical testing and laboratory testing services. We play a key role in the pharmaceutical industry, serving some of the world’s largest global biopharmaceutical companies.
The recent trading update from hVIVO was very positive.
First of all, the company is currentlyStrongest position in history” has recorded revenue projections through 2025, with 90% of its 2024 revenue outlook already under contract. In 2024, we expect to achieve revenues of £62m (up 11% year-on-year).
Secondly, it advised that it plans to open a new state-of-the-art facility in London’s Canary Wharf in the first half of 2024. This will enable the company to meet the growing demand for human stress testing and aim to further scale up. It is expected to generate revenue of £100m a year by 2028.
We are looking forward to 2024 as we look forward to moving to larger facilities and further diversifying our services..
Dr. Yamin “Mo” Khan, hVIVO CEO
Currently, hVIVO stock trades at a forward price/earnings ratio (P/E) of around 23x. This above-average valuation introduces some risk.
However, given the strong growth the company is currently generating, we think the overall risk/reward bias is attractive.
In the long term, I think the stock price is likely to rise further.
unlock new opportunities
Another penny stock I’d like to highlight is net call (LSE:Net).
The company is a technology company specializing in artificial intelligence-powered process automation and customer engagement software.Its customers include: Legal and generalnationally, and the NHS.
This company has an impressive track record of growth. Over the past five years, its revenue has increased from £21.9m to £36m (+64%) as organizations adopt automation solutions. Looking ahead, analysts expect top-line growth to continue, with forecasts of £39.1m for the year ending 30 June 2024 and £43.4m for next year.
It’s worth noting that management was quite bullish in their recent trading update. “As we enter the second half of the year, we remain well positioned and our innovative product roadmap continues to open up new opportunities in a structurally growing market.” said CEO James Ormondroyd.
Now, the valuation of this stock has also increased. Currently, the forward P/E ratio here is approximately 31 times.
I don’t think that’s unreasonable considering this technology company is growing rapidly and has a lot of recurring revenue.
However, it adds some risk to the investment case. If growth slows, stock prices may become unstable.
