penny stocks: these 30 penny stocks produced up to 6000% returns in 2021
Despite the poor health of the economy and growing concerns over new variants of Covid-19, penny-listed stocks preferred by retailers have emerged as the main beneficiaries of the current calendar year. As many as 30 penny-listed stocks delivered more than 1,000% in 2021, while 90 of them have jumped more than 500% in the current year, data compiled from Ace suggests. Equity.
There is no theoretical definition of penny stocks. However, stocks at single digit prices or below Rs 10 are bracketed at this club. ETmarkets took into account companies with a market capitalization of less than Rs 1,000 crore at the end of 2020.
Textile player Digjam tops the list with an increase of more than 5,935% in 2021. The stock recovered to Rs 247.45 on December 31, 2021, after settling at Rs 4.1 the corresponding day of the previous year. An investment of Rs 1 lakh in Digjam on the last day of the previous calendar year would have become Rs 59.35 lakh today.
Another textile player, Adinath Textiles, rose more than 4,800% as the stock rose from Rs 0.86 to Rs 84.5 during the period under review. It was followed by the little-known NBFC microcap, TTI Enterprises, which climbed around 4,570% to Rs 62.1 on December 31.
Some typical characteristics of these stocks tend to be low promoter holdings, huge debt, accumulated losses, and poor dividend performance.
Market experts say penny stocks rose further in the bull market, which attracted investors. However, the gullible, entering late, do not have the opportunity to exit. Market experts advise conservative investors to avoid penny stocks. Sometimes these stocks are driven by market operators. When they fall, they are subject to lower circuits, making it impossible for small investors to exit.
G Chokkalingam, Founder and CEO of Equinomics Research & Advisory, says investors who have made money with penny stocks should make profits and enjoy life, as most companies don’t solid fundamentals to justify valuations. “Only smart investors, who understand the limits and principles of penny stocks, are able to make money. Gullible investors just try to chase a rally, lose money almost every other way.” , he added.
Gita Renewable Energy, Radhe Developers (India), Chennai Ferrous Industries, Brightcom Group, Rohit Ferro Tech, Indian Infotech & Software, Ushdev International, Cressanda Solutions, NCL Research, Pan India Corporation, MIC Electronics are other names that delivered 2000- 3,500 percent returns.
Kreon Financial Services, Lloyds Steel Industries, Banas Finance, Globus Power Generation, and Sawaca Business Machines have delivered 15-20 times greater returns to investors.
SEL Manufacturing, Baroda Extrusion, Tantia Constructions, PMC Fincorp, Sharp Investments, Visagar Financial Services, Clio Infotech, Texel Industries, Smiths & Founders (India) and Felix Global Venture grew by more than 1,000%.
However, not all penny stocks rewarded investors in 2021. About three dozen of them eroded investor wealth, 10 of which slipped more than 20%.
Sagar Productions destroyed around 63% of the investor’s wealth, followed by Sun Retail, which lost more than 45%. Trio Mercantile, Innovative Ideals and Services, and Chandrima Mercantiles fell by as much as 40 percent each.
In general, a rise in stock prices tends to be supported by fundamentals such as good management, better financial performance and business expansion. This is not the case with penny stocks. Investors should be careful not to get trapped in buying low value stocks, as this can degrade the quality of investments.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: âIn a fierce bull market like this, cats and dogs will rise as well. But they will be slaughtered in a bear assault.
Experience shows that wealth is created in the long run by high quality actions. Investors chasing penny stocks will fail at the end of the bull run, he adds.