The penny stocks I’m looking at today have something in common. There are only one or two analysts offering recommendations I can find, but at least they’re all bullish. That’s one of the risks we face with penny stocks. There’s often very little analysis out there for us to use, and we can be largely on our own.
Medical devices
Creo Medical Group (LSE: CREO) makes medical instruments for surgical endoscopy, using microwave and radio frequencies. Minimally-invasive surgery can expose patients to less danger, and reduce costs.
But after an impressive start to stock market life, the Creo share price collapsed. In the past five years, it’s crashed 89%. The shares are down to 18p for a market capitalisation of £73m.
Creo‘s been one of those promising growth stock candidates we see so often. But it’s yet to make an annual profit. And forecasts suggest that’s still unlikely to happen by 2026. But at least they show the losses falling steadily.
Balance sheet boost
I see signs that 2025 could be the year that things change. In September, a new share issue raised £12m, so we’ve already had some dilution. With interim results the same month, CEO Craig Gulliford said: “The launch of Speedboat UltraSlim in late 2023, our smallest device to date, was a significant milestone and helped us to achieve record core product sales for H1-2024.”
That seems key to me. Will this new technology lead to profits in the nick of time? Or will the company need to go back to the market to raise more cash? It could all hinge on that. For investors who can handle the fear of cash running low again, I think Creo’s worth considering for its growth potential.
Smart sensing
Oxford Metrics (LSE: OMG) is profitable, with a strong balance sheet. The 2024 full year looks like it was a tough one, with adjusted earnings per share falling 44% to 5.29p. Net cash at 30 September, though healthy at £50.7m, declined 22%.
The company makes smart sensing and motion-capture technology. Its Vicon product is used in sports, education, film production, virtual reality and biomedical research. And it has an impressive list of customers, including Boeing and Ford.
But the share price is down 55% over five years, with most of that in the past 12 months. It’s down to 51p at the time of writing, for a market-cap of £65m. After a poor performance like that, why am I optimistic about Oxford Metrics?
Looking ahead
With those disappointing 2024 results, CEO Imogen O’Connor pointed out that they should be seen “against an exceptionally strong prior year comparator where our teams delivered more camera systems than ever before.”
And when it comes to the 2025 outlook, the full-year update spoke of “a good spread of opportunities across all main markets and a pipeline of new products”.
There’s clearly a risk of another painful year. But forecasts (though only from a couple of brokers) indicate a return to earnings growth and put a 97p target price on the stock. That has to make it worth further research.
