Penny stocks are high-risk investments. But the risks can be worth taking on – sometimes these stocks produce phenomenal gains.
Here, I’m going to highlight two penny stocks that are quietly making British investors a fortune. Could they be worth a closer look?
Huge long-term returns
First up, we have SDI Group (LSE: SDI). It’s an acquisitive ‘buy-and-build’ business that’s focused on buying companies that design and manufacture specialist lab equipment, industrial and scientific sensors, and industrial and scientific products.
It currently trades for around 80p. At that share price, its market-cap is about £84m.
This company looks quite interesting from an investment perspective, in my view. For a start, it operates in several growth industries including life sciences, healthcare, and precision optics.
Second, its financials look pretty solid (which is relatively rare in the penny stock space). Not only are revenues trending up but there’s a decent level of profitability.
“While we are cognisant of the ongoing macroeconomic uncertainty, we believe SDI is well-positioned with a strong business model and solid long-term growth drivers in our key markets. Furthermore, we continue to have an active pipeline of acquisition opportunities and the financial strength to continue to execute our inorganic strategy”.
SDI management in July
Turning to the stock’s performance, it has certainly been a good long-term investment. Over the last decade, it has surged about 630% (turning £5,000 into around £36,500).
That said, it hasn’t gone up in a straight line. In 2021 it shot up (due to a boost from Covid-related revenues) and then in 2023 it came crashing down (as these revenues dried up).
At today’s share price, the stock trades on a low price-to-earnings (P/E) ratio of 11. At that earnings multiple, I think the stock’s worth considering.
There are risks though. A slowdown in its major markets (or the global economy as a whole) or botched acquisitions are some to think about.
Fast share price gains
The other penny stock I want to highlight is Skillcast (LSE: SKL). It’s a provider of governance, risk and compliance (GRC) software that serves a range of top businesses including Barclays, Tesco, and Schroders.
It currently trades for 61p. That share price puts its market-cap at £55m.
This stock doesn’t have the longest track record. That’s because it only came to the market in 2021. However, since its IPO, it’s delivered impressive returns. Buying in the IPO, an investor would have seen a gain of around 65%.
Alternatively, had they bought in the growth stock selloff of 2022, they could have tripled their money in just three years. Recently, this stock has soared.
Zooming in on the company’s operational performance, it’s been decent lately. For example, for the first half of 2025, revenue was up 18% to £7.5m while EBITDA was up 2,074% to £0.7m.
Given this momentum, I reckon the stock’s worth a look today. However, I’ll point out that with a stock like this, artificial intelligence is potentially a risk.
