However, as we’ve seen with companies like Rolls-Royce, just because a stock takes a tumble doesn’t mean it can’t deliver an explosive recovery. And looking closer at Batm, there’s a lot to be excited about. So much so that its shares could be perfectly positioned for a rebound.

But is this a screaming long-term buy for growth investors to consider?

A bit of context

As a quick crash course, Batm specialises in three critical areas: bio-medical diagnostics, cybersecurity, and network telecommunications. And despite what the group’s five-year share price chart suggests, the business is actually delivering some pretty solid results right now.

Batm’s one of the few companies able to enjoy a massive growth surge during the pandemic, driven by its Covid-19 testing kits. Obviously, demand for these hasn’t persisted, and the gold rush eventually came to an end, taking its share price down with it.

Since then, the business has undergone a bit of restructuring and divested some of its non-core operations to refocus the business. And looking at the group’s latest results, those efforts look like they’re starting to pay off.

Across the first six months of 2025, revenues rose from $58.9m to $60.4m year on year, with gross profit margins expanding from 31.7% to 32.7%. That growth may not look particularly explosive, but digging deeper reveals a much more impressive picture.

Thanks to the launch of new products, management’s successfully secured several multi-million-dollar deals with governments and private enterprises alike. Subsequently, its networking segment has delivered a 156% revenue surge compared to the second half of 2024.

At the same time, after its larger medical diagnostics arm penetrated the Italian market, segmental sales grew by a solid 21% year on year. And while its smallest cyber division is lagging, early demand for its new encryption platform’s proving encouraging.

Combining all this with the progress made in boosting operational efficiency, this penny stock might have already begun its recovery story, with the shares climbing by over 30% since April.

What to watch

While Batm’s showing solid signs of progress, like all penny stocks there remains a lot of risk on the table. Even with niche operations, the company has plenty of competitors to fend off, many of whom have far deeper pockets, limiting the group’s pricing power.

What’s more, while the firm’s restructuring appears to be largely completed, there nonetheless remains significant execution risk. If it’s new products and services fail to meet expectations or macroeconomic forces like inflation dampen demand, the anticipated revenue and earnings expansion could take far longer to materialise than expected.

So with all this in mind, is this a stock worth considering?

Personally, I want to see a bit more progress emerge before throwing my hat into the ring. Batm definitely has exciting long-term growth potential, so I’ll be watching this business carefully. But for now, I’m looking at other, more proven penny stock opportunities for my portfolio.

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The contender

I’m talking about BATM Advanced Communications (LSE:BVC). It’s a somewhat unusual tech group, combining network infrastructure and cybersecurity with a medical diagnostics business.

It splits up operations into three main areas. These are network, cyber tech, and medical diagnostics. In recent years, it has also sold some non-core businesses to sharpen its focus on these three high-growth areas. In terms of actually making money, it generates revenue from a mix of software licenses and services, right through to selling medical equipment.

The rise and fall

The share price surged around 300% in the space of just a few months back at the beginning of the pandemic in 2020. The main reason for this was from the medical division, which produced Covid-19 test kits. That drove huge demand, boosting revenues and margins.

With hindsight, it’s easy to say this wasn’t sustainable. As Covid-19 waves subsided, demand for mass testing dropped. This negatively impacted the business’s revenue. More than this, investors had quickly become over-reliant on one-off pandemic revenue. Even though the other arms of the company were operating, they suddenly became a much smaller contributor overall.

After the crash, BATM tried to pivot back to its core business, which is where it’s currently at.

Looking to the future

The most recent H1 results showed good momentum on all fronts. It posted an adjusted profit before tax of $1.6m. Although this was a drop from the $3m of the previous year, it’s still a profitable company. Within the cyber division, a “significant milestone (was) achieved with the delivery of the first units of a customised version of the Group’s encryption platform”. This could yield a significant financial boost going forward if demand is strong.

Given the continued shedding of underperforming operations, I think the company is well-positioned to grow in the coming year. However, I struggle to see the penny stock ever getting back to levels above 100p. The pandemic surge was a one-off event that I don’t think will be repeated in our lifetimes. Therefore, it’s not a realistic share price target.

It’s hard to say whether the stock is undervalued, with the 14% rally over the past year making it fairly valued in my view, given the outlook.

I think this is a good example of a penny stock investors should be cautious about. Just because it had a good run in 2020 doesn’t mean it will reach the same price in the future. What created that rally was a unique situation. On that basis, I think there are better shares out there for growth potential.

The post This 19p penny share traded above 125p in 2020. Time for a comeback? appeared first on The Motley Fool UK.

So what’s happened? Should I buy or avoid the shares? Let’s take a closer look.

Tech stock

BATM is an Israeli-based technology business specialising in cyber security, networking, and diagnostics products for its customers. These include governments, the healthcare industry, and the military.

The shares are down 28% over a 12-month period from 28p at this time last year, to current levels of 20p. Going back even further, they’ve fallen from highs of 140p in July 2020, to current levels, which is an 85% drop.

The downfall and risks ahead

BATM capitalised on Covid, as it managed to create and sell home testing kits in partnership with medical firm Novamed. At the height of the pandemic, this served the business well, and boosted performance levels and the shares spiked.

As demand tapered off, performance and the share price followed.

To add further woes, BATM’s location in Israel has become an issue. The war in the region can’t be good for business from an operational view, and I feel this has also impacted investor sentiment. This is an ongoing risk I’ll keep an eye on. I personally do hope for a peaceful resolution to the conflict for everyone involved. If it happens, it could be good news for BATM’s future prospects.

Finally, the business is not currently making a profit. Although this is usually a red flag for me personally, I do understand it’s not unusual for small-cap shares. I’ll be keeping a close eye on trading updates.

Potential recovery?

Personally, I do believe there are high levels of demand for BATM’s products in the digital world we’re living in. Cyber security is one area where the business could see exponential growth in the future. For example, defence spending, including cyber security, is currently at all-time highs according to Statista, and shows no signs of slowing. BATM could benefit here.

Another bullish aspect I like is that the firm’s performance is heading in the right direction. For 2023, the firm reported revenue had increased from $116m in 2022, to $122m. The next positive sign would be that of a profit.

Moving on, the good news for BATM is that it has very limited debt, only $5m. This is uncommon for small-cap shares. This decent-looking balance sheet could offer the business some resilience as it looks to bounce back from a difficult period.

Finally, the shares look decent value for money on a price-to-book ratio of close to one.

My verdict

It seems to be a cocktail of issues all hitting BATM at once has hurt the business, and the shares. It’s not out of the woods yet, but there are some promising factors for me to get my teeth into.

However, I’ve decided I wouldn’t buy any shares right now, but I will keep the shares on my watch list.

The post This penny stock once looked destined for big things! What’s happened? appeared first on The Motley Fool UK.

Even Amazon was a penny stock at one point!

Today, I’ve identified two undervalued micro-cap shares I feel are worth considering. Could they be the next big thing?

Let’s have a look.

BATM Advanced Communications

BATM Advanced Communications (LSE: BVC) is a relatively small business that develops cybersecurity, diagnostics and networking products for healthcare, government and military agencies. It’s a fairly simple business but one I believe has growth potential. 

From military applications to laboratories and agriculture, there’s high demand for its products in today’s digitised world.

The company enjoyed a huge boost during Covid by developing home testing kits in partnership with Israeli diagnostics firm Novamed. But sales soon tapered off rapidly, wiping 85% off the share price since an all-time high of 140p.

It’s now unprofitable but has a good price-to-book (P/B) ratio of 1, lower than the UK telecoms industry average of 1.9. It holds a fairly decent amount of cash and $116m in equity with only $5m of debt, so its balance sheet looks good.

During 2023, revenue increased from $116m to $122m and is expected to grow to $143m by the end of this year. If it does, the company should become profitable within the next six months. I expect that would give the share price a boost.

However, with headquarters in Israel, the company faces operational risks. Conflict in the region could lead to supply and demand issues or limited financing options. That’s something worth keeping an eye on.

Still, I think it’s promising. Should a resolution to the conflict be found, it’s positioned well for growth.

Calnex Solutions

Calnex (LSE: CLX) designs instruments for testing telecom networks and data centres around the world. Some of its customers include Apple, Samsung, Huawei and AT&T.

Earlier this year, it ended a 12-year sales partnership with Spirent which accounted for much of its revenue. The decision came after Spirent accepted a £1.2bn takeover deal from US firm Keysight Technologies, which makes similar products to Calnex. The share price crashed heavily on the news but has recovered 18% since this year’s low.

In June, the company participated in a successful demonstration of a new low-cost 5G mobile capability called xHaul. The technology has several potential use cases in the development of next-generation mobile networks like 6G.

Calnex is only barely profitable, bringing in a meagre £40k worth of earnings the past year. Revenue and income both fell considerably in its latest earnings report. Still, it has no debt and is in a stable financial position. It also has a decent P/B ratio of 1.7, just below the industry average.

With new sales partners picking up its products, the company has decent growth prospects. It’s undervalued by 52% based on future cash flow estimates and earnings are forecast to grow 72% a year.

It might need some time to become the ‘next big thing’ but I like where it’s headed.

The post Penny stocks with promise! Could one of these little UK tech companies be the next big thing?  appeared first on The Motley Fool UK.

Both picks are similar in that they have the potential to provide bumper growth and returns in the long-term. However, they also both have some unavoidable external risks that could derail their progress.

Let’s dig deeper.

BATM Advanced Communications

BATM is an Israeli-based technology business with interests in cyber security, networking, and medical technology.

As I write, BATM shares are trading for 22p. At this time last year, they were trading for 32p, which is a 31% drop over a 12-month period. Macroeconomic volatility, but especially the war, has pushed the shares down.

The obvious risk for the firm is the current geopolitical picture in the Middle East. Continued conflict could hurt performance, sentiment, and growth. In addition to this, larger competitors in its industry with much more money and resources could out-muscle the firm.

However, I’m impressed by BATM’s performance and growing presence. Between June and December, it racked up $32m of orders. Its half-year period to the end of June saw revenue, profit, and margins all rise too. The business also looks to have a healthy balance sheet too.

I’m hoping for a peaceful resolution in the current conflict. It would also be good news for BATM, and I think this is one small-cap to keep an eye on.

At just over 22p a share, I’d be willing to open a small position the next time I have some cash to invest. I reckon there’s plenty of room for growth, especially as we hurtle towards the artificial intelligence (AI) revolution and governments continue to increase spending to ward off digital threats!

Anglo Asian Mining

Anglo is a mining company that focuses on copper and gold.

As I write, Anglo shares are trading for 55p. They’re down 100% from 110p at this time last year to current levels.

Mining stocks are very cyclical. This is one of its biggest risks. I reckon the shares are down due to the economic slowdown in China, as the country is one of the largest copper users in the world. Similar to BATM, Anglo is affected by the current conditions of the country it operates in. An unsteady geopolitical outlook could present issues when mining for commodities and this could dent performance and growth.

However, I reckon Anglo shares could climb once macroeconomic volatility cools. Gold and copper are generally both in high demand. The latter especially is essential for infrastructure building. If the Chinese economy turns around, I think demand and sentiment towards copper and copper miners could soar.

Finally, I find myself intrigued that Anglo’s current dividend yield is close to 12%. Now I reckon its shares falling has pushed that up but the firm has indicated a dividend is on the cards. Whether the yield is covered by earnings remains to be seen as it’s worth remembering dividends are guaranteed.

Although Anglo could experience a sharp rise in the future, for me personally, it’s the riskier of the two stocks. I’ll keep Anglo on my watch list for now.

The post 2 interesting penny stocks that have caught my eye! appeared first on The Motley Fool UK.

A top lithium stock

Investing in lithium stocks has considerable long-term potential as electric vehicle (EV) adoption takes off. The silvery-white metal is of course a critical component in the batteries that make them run.

Africa-focused Kodal Minerals (LSE:KOD) is one such stock on my radar today. It’s developing the Bougouni mine in Mali, which contains a whopping 31.9m tonnes of lithium.

The company aims to complete construction and start production in 2024. And it’s fully funded to get the project off the ground following a $100m cash injection last January from Hainan Mining. The deal, which saw the Chinese miner take a 51% stake in the project, helps reduce risk for shareholders.

Positive development news at Bougouni could lift Kodal’s share price through the roof. Though remember that bad news on this front would have the opposite effect. I’ll be paying close attention in the months ahead.

Cyber star

Buying shares in Israel-based businesses is a risky play today as the geopolitical landscape deteriorates. As a result I’m not planning to invest in BATM Advanced Communications (LSE:BVC) just yet.

But I’ll consider adding the company (which is headquartered near Tel Aviv) to my portfolio if the situation in the Middle East cools. It provides network and cyber security services as well as biomedical solutions.

Indeed, I’m especially excited about its BATM’s Networking and Cyber division as the digital revolution rolls on. A rise in state-sponsored cyber attacks, along with the increasing use of artificial intelligence (AI) for disruptive purposes, should also boost sales at the unit.

The penny stock recorded $32m of cyber security orders between June and December. I’m expecting it to have another big year in 2024.

Home comforts

Building materials suppliers like Michelmersh Brick Holdings (LSE:MBH) also have excellent long-term investment potential. The country’s housing stock is the oldest in Europe and requires constant updating. This provides a steady flow of revenue from the repair, maintenance and improvement (RMI) sector.

At the same time, Britain will need to accelerate construction of new homes to soothe a housing shortage and meet the needs of its growing population. So product demand from property developers also looks poised to soar over the next decade.

But at the moment I’m not tempted to buy Michelmersh shares. It warned in November that “contraction in the construction industry has continued” and this may remain the case in 2024 as the UK economy flatlines.

I’ll be keeping an eye on inflation data in the new year though, alongside Bank of England commentary on future interest rates. Signs that rates may come down sharply may signal a time to buy the brickmaker. This scenario would likely see its share price post more impressive gains on hopes of a housing market turnaround.

The post 3 penny stocks I’ll be keeping a close eye on in 2024! appeared first on The Motley Fool UK.

A small firm with big potential

BATM Advanced Communications (LSE:BVC) is a tech company that focuses on two main areas. One is network and cyber security divisions and the other is bio-medical solutions.

Over the past year, the share price is down by 7%. With a current price of 20p, the market cap stands at £89m, making it a penny stock.

I like the company because I feel demand for the cyber security division in particular will increase over the next year. This is because we’re being warned that the rapid rise of artificial intelligence (AI) this year could have some unwanted side effects. One is that a rise of cyber attacks using AI is very likely. In fact, it’s already happening!

The Celare software that BATM sells is a secured network, and has good reviews. In fact, earlier this year it received a government cyber security order worth $26m. I’d expect revenue to increase next year with higher sales from this area.

Noting the location

One concern that needs to be flagged up is that the firm is headquartered in Israel. It does have offices around the world, but Israel is at war and there are negative economic impacts already being experienced in the country as a result.

However, the business doesn’t rely massively on any one physical location. Further, I don’t see the conflict with Hamas going on for a long period (which we all fervently hope). So I expect any impact on the firm to be limited.

The post-pandemic flush out

The stock might be familiar to some given the bio-medical solutions arm. It switched to help and make Covid-19 diagnostic kits during the pandemic. This saw the share price leap above 100p in 2020 as profits soared.

This demand has now gone, hence why the stock is much lower now. Yet I think that if the cyber security division can see high demand in the coming years due to AI-related attacks, we could see the stock jump.

Granted, a move of the magnitude of the one from the pandemic in such a short period of time is unlikely. Yet I believe that the profitability increase from software sales would be more sustainable than the Covid kits anyway. It’s not a flash in the pan, but rather a solution to a problem that I think will be here to stay.

As a result, I think investors should consider adding this penny stock to a portfolio.

The post Why I think this 20p penny stock could be set to explode in 2024 appeared first on The Motley Fool UK.

An attractive dip buy

I think buying BATM Advanced Communications (LSE: BVC) could be a shrewd move following recent extreme share price weakness. The business — which manufactures coronavirus-testing equipment — has slumped as fears over the pandemic have receded. However, as soaring cases in China show, the battle against the pandemic is far from over. Indeed, Infection numbers in the country have just hit two-year highs.

In a recent article in The Lancet, scientist Christopher Murray claimed that “Covid-19 will continue but the end of the pandemic is near”. This suggests that demand for BATM’s products could continue ticking along even if a fresh full-blown upturn in the pandemic is avoided.

But I wouldn’t just buy this penny stock for its Covid-19 testing kits. The business also generates a sizeable chunk of revenues from manufacturing networking and cyber security products. These are two areas that could grow significantly as the digital revolution clicks through the gears. Revenues from BATM’s cyber security division, for example, leapt 111% year-on-year in 2021.

A high-profile failure of BATM’s systems could prove catastrophic for future revenues. But it’s still my belief that the advantages of owning this particular cheap UK share outweigh the risks.

Another great penny stock

Copper values are flying as the market frets over shortages of the essential commodity. Disappointing red metal production in Chile has shaken nerves in recent days, and concerns over supply due to the Russia-Ukraine dispute have added fuel to the fire. Red metal stockpiles in London Metal Exchange (LME) warehouses have fallen to their lowest level since the early 2000s.

Three-month copper prices have just hit fresh all-time highs of around $10,800 per tonne on the LME as a result. Many analysts suggest the market could experience a serious deficit of material in 2022 and beyond too, meaning that metal values could remain white hot. This bodes well for Phoenix Copper (LSE: PHC), a miner which looks on course to begin producing the metal late this year.

I’ve long talked about copper stocks as a great investment as the green revolution takes off. The highly-conductive commodity they dig for is an essential material in the manufacture of electric cars and charging infrastructure. It is also used in massive amounts to build renewable energy technology like wind turbines. Thus there’s a good chance copper prices — and by extension profits at companies like Phoenix Copper — will be strong over the next decade at least.

Phoenix Copper isn’t a guaranteed winner, of course. In particular, any difficulties in getting its Empire metal mine in Idaho up and running in H1 2023 would have significant consequences for profits forecasts. That said, I still think this penny stock remains a highly-attractive investment as investment in low-carbon technologies rockets.

The post 2 penny stocks to buy before the Stocks and Shares ISA deadline! appeared first on The Motley Fool UK.

Long live the King

Revenues at Kingspan Group (LSE: KGP) are climbing strongly amid growing concerns over the climate emergency. The building products business — a big player when it comes to insulation materials — saw sales leap 44% in the nine months to September, latest financials showed.

Kingspan has a huge opportunity to make big profits as interest in foam insulation rises. Analysts at BCC Research think the global market will be worth $29.5bn by 2025, up more than $7bn over a five-year period. I like Kingspan’s wide geographic footprint that should allow it to capitalise fully on this fast-growing industry too. The penny stock operates in more than 70 countries.

A word of warning however. Demand for Kingspan’s product could take a hit if incentive schemes to encourage people to insulate their homes end. Indeed, the UK government is said to be considering rolling back a £1bn levy that helps fund home insulation work.

A penny stock for the pandemic

Concerns over the Covid-19 crisis have dialled down several notches in recent weeks. Worries about the ferocity of the Omicron mutation have dropped on a raft of positive medical data. But it’s far too early to claim that the pandemic is over.

It’s why I still believe buying UK healthcare shares like BATM Advanced Communications (LSE: BVC) is a good idea. And news in recent days that a new Omicron variant is under investigation illustrates why. It seems that living alongside Covid-19 will be the new norm, as many scientists now predict. So I expect the sort of Covid-19 testing equipment that BATM manufactures to remain in high demand.

I am concerned by the amount of competition in the Covid-19 testing space. But I think the potential size of the market of the long term still makes the penny stock an attractive buy today. Besides, the steps it is taking to expand into new geographies also gives it an opportunity to capture significant sales (its RAPiDgen antigen test was approved for sale in Russia just before Christmas).

Call me up

Strong recent trading over at Netcall (LSE: NET) is encouraging me to give this tech firm a close look too. The business — which makes software that allows companies to automate their operations — saw revenues soar 10% in 2021, predominantly as demand for its cloud-based services took off. The rapid pace at which businesses are digitalising their operations is yielding big returns at companies like this.

My main concern with buying Netcall shares is the company’s high valuation. Today, the penny stock trades on a forward P/E ratio of 43 times. It’s the sort of rating that could prompt a sharp share price reversal if signs of explosive profits growth appear in danger. That said, it’s my opinion that Netcall merits such a premium, given the investment businesses are increasingly making to automate their processes.

The post 3 penny stocks I’d buy to hold for FIVE years! appeared first on The Motley Fool UK.

Testing times

It seems the world will experience a long and choppy recovery from the coronavirus crisis. Global Covid-19 cases continue to grow as the Delta virus variant spreads. Vaccination rates have flattened in many regions and the emergence of new mutations could worsen the spike at any moment.

BATM Advanced Communications (LSE: BVC) is a UK share that stands to thrive in this climate. Revenues at its Bio-Medical division soared 10% in the first six months of 2021 as demand for its testing and diagnostic products boomed. However, BATM isn’t just a one-trick pony. It also makes networking and cybersecurity products, providing it with plenty of profits opportunities in an increasingly digital world.

Be aware though, that BATM Advanced Communications trades on an elevated P/E ratio of 39 times. Such a high valuation could cause the penny stock’s share price to collapse if anything other than explosive earnings growth becomes apparent. Today the company, which has fallen 27% in value over the past 12 months, changes hands at 86p per share. I’d buy in at these levels.

Playing your cards right with penny stocks

The Card Factory (LSE: CARD) share price has fallen 50% in value in less than five months. Confidence in the penny stock has plummeted as concerns of surging inflation and its impact on consumer confidence have increased. I think the market may have overreacted here however. I’d argue that retailers focussed on value like Card Factory stand to gain from falling shopper sentiment.

I’d also argue that Card Factory operates in one of the more defensive areas of the retail sector. People don’t stop sending greetings cards or celebrating special occasions when economic conditions worsen, right? While the UK share faces increased competition from online players like Moonpig and Thortful, the company’s investing in its own digital presence to exploit the e-commerce boom. I think the business is a great buy at current levels of 49p per share.

The African Queen

The Airtel Africa (LSE: AAF) share price has slipped from September’s record peaks of 103p, providing a decent opportunity for dip buyers, in my opinion. The telecoms share has risen 37% over the last 12 months, and I expect the business to resume this uptrend soon.

Airtel Africa is one of the biggest telecoms providers on the continent. It’s also a major player in Africa’s fast-growing mobile payments industry. Its activities are highly regulated, and so the threat of profits-damaging action from lawmakers is an ever present. But as wealth levels in Africa balloon, and demand for telecoms services and financial products leaps as a result, I believe this UK share can still expect to deliver blockbuster profits growth in the coming decades.

Airtel Africa shares go for 93p a pop right now. Consequently, it trades on a rock-bottom forward P/E ratio of 6 times. With the company boasting a chunky 4.3% dividend yield too, I think it’s one of the best-value penny stocks to buy today.

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