But, as ever in the stock market, there is no guarantee of success.

Here are three mistakes I am seeking to avoid as I invest my ISA.

Investing in companies you don’t understand

Is hydrogen power something that could grow more widespread in years to come? Yes.

Does Ceres Power have interesting battery technology for hydrogen? Yes.

So, should investors now consider Ceres Power?

I think that partly depends on whether they understand the company.

Some people have decided to invest in renewable energy companies just because they think the area is set for growth, but without really understanding the companies in which they are buying stock.

I think it is foolhardy to put money into a share you do not understand. It is basically a form of speculation, not investment.

Of course, we can always learn about new things. Someone who wants to buy shares in a certain area can learn more about it.

Diversifying — but not staying diversified

Spreading an ISA across a number of different shares is a simple but important way to reduce risk if one of them does badly.

But what if one of them does well – as in really, really well?

That might sound like cause for champagne corks to fly, rather than being much of a problem. But in fact it can be a challenge.

Why? Because a share that was initially just one among others in a diversified portfolio can come to dominate it thanks to its very strong performance.

This can be a difficult situation to face. If a share has done so brilliantly, it can seem counterintuitive to sell even part of the holding. However, I think it is important to keep an ISA balanced and diversified.

Ignoring the financial details of share-dealing

I hold a share called Logistics Development Group (LSE: LDG). It is basically an investment vehicle that holds stakes in a small number of private companies.

The managers have proved that they are able to create value. Nonetheless, the share sells at a considerable discount to its net asset value.

Some of the businesses in which the company has invested have strong potential, in my view, including a national logistics network.

LDG has some downsides: its portfolio is not very diversified. The financial information on its holdings is less detailed than would be the case if they were publicly traded companies, so it can be hard to make a detailed assessment of performance (though the net asset value is a helpful figure).

But there is a challenge for someone who wants to invest. As is usual, there is what is known as a spread between buying and selling price – but with a small company like LDG this is notably bigger than with a large company.

As soon as I buy the share, I already need it to go up just to be able to sell it for what I paid. On top of that are fees, commissions and all other costs that can come with a Stocks and Shares ISA.

This is just part of investing – but it can be a mistake to ignore the seemingly small financial details of such costs.

The post Dreaming of ISA riches? 3 mistakes to avoid appeared first on The Motley Fool UK.

In reality, penny stocks come in all shapes.

Take Logistics Development Group (LSE: LDG) for example.

It is solidly profitable. In fact, last year’s net profit of £19m means the company’s current price-to-earnings ratio is just three.

The company owns stakes in a number of well-established businesses, such as Finsbury Food Group and Alliance Pharma.

So, could this be the deep bargain its P/E ratio may seem to suggest?

A Buffett-like approach

For starters, it is worth noting that the earnings have moved around dramatically in recent years. Last year’s earnings are not necessarily at all indicative of what may happen in future.

But looking at another valuation metric, the penny stock also seems very cheap.

Its last update on its net asset value, at the end of September, stood at 26.7p per share. That may have moved up or down since then. Hopefully it has gone up given management’s focus on value creation: that September net asset value was already 9% higher than the previous one just six months earlier.

But, using the September figure, that net asset value is close to double the current Logistics Development Group share price.

Why is there such a big discount?

One reason is the City seems lukewarm about the firm’s strategy of owning stakes in a small number of private companies then hanging onto them for years without paying dividends.

But that reminds me of the approach of some very successful wealth creators, such as Warren Buffett.

No obvious trigger for price rerating

However, I see this as a stock where Buffett-like patience is not only desirable but possibly essential. I reckon Logistics Development Group is creating value over the long term but is in no hurry to sell its stakes, or pay dividends. That might explain why the share price is drifting.

Over the past year, the company has used up much of a chunky cash pile. Part went to investing in a new national logistics platform. I see that as a promising business opportunity.

Some of the cash also funded a tender offer in which the firm bought back some of its own shares well above their market price when the offer was announced. I sold my shares at that time and made a profit.

Since then I have bought more of this penny stock for my portfolio.

But while the business has clear value – as shown by the net asset value – that value is basically locked up in a portfolio of investments for now. That could mean that there is no clear reason to expect the share price valuation gap to close in the short term.

In it for the long haul

I am a long-term investor, though, and from a long-term perspective I think this penny stock looks badly undervalued.

There are risks due to the concentration of investment in just a few private companies. One bad choice could significantly hurt the firm’s performance.

But I think time will help bring the share price closer to what it is actually worth. I therefore plan to hold onto this share for the foreseeable future.

The post On a P/E ratio of just 3, is this penny stock a deep bargain? appeared first on The Motley Fool UK.

I wouldn’t call any small-cap stock a ‘no brainer’ due to the higher risks involved. Their share prices can be volatile, and they can be less financially equipped to deal with company, sector, or economic crises.

Yet I think the standout growth potential of these penny shares still makes them impossible to ignore: Logistics Development Group (LSE:LDG), Alternative Income REIT (LSE:AIRE), and Ultimate Products (LSE:ULTP).

Want to know why? Read on.

Cheap as chips

As I say, purchasing penny stocks comes with an added layer of danger. However, investors can protect themselves by purchasing ones that are going cheap.

The reason is simple: shares with rock-bottom valuations enjoy a cushion that can limit (or even prevent) price drops.

This is the case with Logistics Development Group, and indeed with all of the shares here. This particular UK share trades on a forward price-to-earnings (P/E) ratio of just 3.1 times.

The company formerly known as Eddie Stobart primarily invests in — you guessed it — logistics assets. We’re talking about medicines distributors (Alliance Pharma), delivery companies (APC), and e-commerce specialists (SQLI). It also holds a large stake in Finsbury Food, a large bakery business.

Logistics Development’s cyclical nature leaves it exposed to downturns, though its diversification across sectors helps reduce this risk. In my view, themes like the rise of online shopping and a rapidly ageing population give the company excellent growth potential.

Growth and dividends

Penny shares aren’t renowned for their ability to pay dividends. Any surplus cash these businesses have tends to be reinvested for growth rather than distributed to shareholders.

Alternative Income REIT is an anomaly in this regard. Under real estate investment trust (REIT) rules, it must pay 90% of annual rental profits in dividends.

This means it currently has an 8.7% prospective dividend yield. Combined with a forward P/E ratio of 7.9 times, it offers excellent all-round value.

Alternative Income invests in a range of property classes, including retail outlets, hospitals, power stations, and apartments. While it’s exposed to interest rate risk, this diversified approach provides a stable long-term return and reduces volatility during tough economic periods.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

A top turnaround stock?

Ultimate Products is the final cheap share we’re looking at here. It trades on a forward P/E ratio of 8.9 times.

What makes this such an attractive growth share? To be honest, things have been pretty dire here of late as consumer spending has fallen. The company makes household products under brands like Salter and Russell Hobbs.

Yet I think it could be a great recovery stock to consider at today’s prices. Its much-loved brands put it in good shape to ride the economic upturn when it arrives. European expansion and work to improve its sales functions could also boost growth.

A final bonus: this penny stock offers a 10.1% forward dividend yield.

The post With P/E’s below 9, are these 3 cheap penny stocks no brainers? appeared first on The Motley Fool UK.

Owning penny shares comes with greater risk than, say, holding FTSE 100 and FTSE 250 stocks. But the huge returns on offer make them worth consideration from confident investors. Take the examples of Panthera Resources (LSE:PAT), Logistics Development Group, and Brave Bison Group.

These UK stocks have delivered an average annual return of 19% since November 2020. And I believe they could continue delivering spectacular profits for shareholders. Here’s why.

Gold star

Panthera Resources — which searches for and develops gold projects in India and West Africa — has been swept higher in 2025 by strong exploration results. At 23.2p per share, it’s delivered an average yearly return of 23% over five years.

Investing in early-stage miners like this can be especially risky. Costs can balloon, putting stress on what can be already-stretched balance sheets. They can also be subject to regulatory issues in various countries.

In fact, Panthera has this year launched a $1.58bn case against the Indian government for stalling development of its Bhukia gold project.

But as we’ve seen, the rewards can also be gigantic if drilling work reveals enormous potential payloads. Studies at Panthera’s Kalaka mine in Mali have revealed a 3m ounce exploration target in a very promising gold region.

This gold stock is a high-risk bet. But given its excellent operational progress and the robust long-term outlook for gold prices, I think it’s worth a close look.

Moving higher

Logistics Development Group has delivered an average annual return of 11.5% since November 2020. During that time it’s changed its name from Eddie Stobart, but has retained its focus on the logistics market.

The assets it invests in range from warehousing and transportation to e-commerce. Its largest holding today is Finsbury Food, though other notable investments include Alliance Pharma — which distributes drugs and medical products — delivery company APC, and digital commerce specialist SQLI.

LDG has exposure to both cyclical and non-cyclical sectors. It’s a mix that leaves it somewhat vulnerable to economic downturns.

Yet at current prices I think it’s a top value stock to consider. At 14p, it trades at a whopping discount to its net asset value (NAV) per share of 26.7p (as of June).

32.4% return

Brave Bison creates, distributes and monetises online video content. It’s delivered a stunning 32.4% average annual return over the last five years, and has been active on the acquisition front to keep outperforming.

The company has made a whopping five acquisitions in the year to date. This includes the potentially transformative purchase of MiniMBA, which provides marketing training and services to blue-chip companies like McDonalds and Google.

Following these acquisitions, Brave Bison’s revenues rose 19% between January and June. This prompted it to lift earnings forecasts for next year. I’m confident these moves to expand and improve its services will pay off handsomely long term.

The penny stock’s profits could well disappoint should the broader advertising industry turn lower. But on balance, I’m confident it can keep providing excellent returns over time. It trades at 23.6p per share.

The post 3 penny stocks to target a 19% annual return appeared first on The Motley Fool UK.

One share in my portfolio typifies that right now, I reckon.

Logistics Development Group (LSE: LDG) has a share price of around 14p. But its net asset value (NAV) per share, at the end of June, was 26.7p per share.

Can that really be the possible bargain it seems?

Value is locked up, for now

There are a couple of points it is helpful to understand.

That NAV estimate is already from a few months back. Since then, the company has invested £15m into a distribution business. Over time, I think that should help to create value, but for now it means that money is locked up in an investment, not sitting as cash on the balance sheet.

In fact, at the end of June, the company only had £8m of net cash on its balance sheet, so I will be interested to see in due course what effect that deal has on the balance sheet in the short- to medium-term.

That is typical of the wider asset base at the company.

It is not sitting on 26.7p per share in cash. It is sitting on some cash and multiple stakes in private companies.

They can be difficult to value in the absence of a public market for their shares. It can also sometimes be difficult to release the perceived value if desired, as there may not be a market of active buyers.

Clearly, estimating an NAV always involves making certain assumptions. Still, Logistics Development Group really does look to me like a bargain penny share, given the value of its underlying assets.

Tempted to buy more

Earlier this year, under shareholder pressure, it used some of its spare cash to return £21m to shareholders at 19p per share.

I gladly took that money and banked a profit. Since then, though, I have added the penny share back into my portfolio.

At its current price, I am tempted to buy some more. For now, though, I am keeping my powder dry as I see quite a few opportunities in the current market and think more could come along if we encounter further stock market volatility. Still, I am weighing buying some more Logistics Development Group shares in coming months.

I am a long-term investor anyway, but I certainly think that mindset helps here. The company is playing a strategic long game, aiming to build value by owning stakes in carefully selected companies for years.

As a penny share, it does not have the news flow a much larger business might have. It can also be challenging for an outsider to assess what they personally think is a fair valuation for the sort of medium-sized private companies in which the group invests.

Still, from a long-term perspective, I see it as a penny share for investors to consider. I plan to own my stake for the long run.

The post Is this penny share deep value hiding in plain sight? appeared first on The Motley Fool UK.

In a year, that would add up to over £1,800 to invest. Here are some things to consider when thinking about doing just that.

Good investing principles count, whatever the amount

It may be surprising, but a lot of what applies when investing millions of pounds at once is also relevant when dealing with much, much smaller sums.

For example, when people start buying shares they sometimes put money into something they do not understand, just because its price has been going up regularly. I see that as speculating, not investing.

To me, investing is about carefully researching familiar companies and putting money into them when they look cheap relative to their long-term prospects. To do that, it helps to have a handle on basic but important concepts such as how to value shares.

One way in which investing small amounts can be different to bigger sums is minimising costs and fees. Some have a minimum amount, so can take a proportionately bigger chunk out of modest-sized investments than large ones.

So before starting to buy shares, it is important to weigh up the different options when it comes to share-dealing accounts, Stocks and Shares ISAs and share-dealing apps.

Building a shares portfolio from scratch

Another important principle of investing, at any level, is diversifying across different companies. With over £1,800 a year to invest, someone tucking away a fiver a day could comfortably do that.

When setting up a share portfolio, I find it helpful to think about objectives. For example, some investors want to focus on earning passive income through dividends, others are focused on growth and some want to target both.

One mistake people sometimes make when they start buying shares (and in some cases long beyond) is trading too often. That typically involves fees and commissions each time. Long-term investment built on a ‘buy and hold’ strategy can reduce such fees, allowing investors time for a company to prove its worth.

One to watch?

As an example, one share I am holding with a long-term perspective is Logistics Development Group (LSE: LDG). Its shares sell for pennies, but that alone does not necessarily make them good value. As I said, getting to grips with valuation is important before starting buying shares!

In this case though, I think the share is good value, which is why I have added it to my portfolio. It trades for under 15p but last month the company’s net asset value per share was over 26p.

It owns stakes in a number of private companies. They can be hard to sell, so a net asset value is not the same as cash in the bank.

Still, Logistics Development Group has proven its ability to create shareholder value and I am excited by its recent investment in the UK’s largest independent parcel delivery network. I see it as a share for investors to consider.

The post Here’s how to start buying shares with £5 a day appeared first on The Motley Fool UK.

Still, I have been looking at the stock again recently. I think it is one investors should consider, as it still looks like a potential bargain from a long-term perspective. That is even after a 49% surge in the share price over the past year.

Selling at a deep discount

The company flies beneath many investors’ radar, as its share price is in pennies and even after the past year’s rise, its market capitalisation is still a fairly modest £66m.

It has started to issue more frequent updates on its net asset value than it used to, potentially making it easier for investors to value the business. The most recent valuation, as of 31 March, was 24.6p per share.

Currently, the stock sells for around 16p. That means that it sells for over 50% less than its net asset value.

At face value, that seems like an obvious bargain. In practice, things may not be so simple. That net asset value is not cash sitting in the bank. It largely consists of a small number of shareholdings, such as Finsbury Food Group, IT company SQLI, and Alliance Pharma. Those three key investments are all private companies, meaning that it is hard to assess their value with a high degree of accuracy.

Long-term potential

However, just because it can be hard to value private companies accurately does not necessarily mean that such valuations are wrong.

Logistics Development Group has a track record of buying into strong businesses at attractive valuations. Over time, that can help it realise profits. The performance of the stock over the past year demonstrates the windfall this can potentially mean for investors when things go well.

Last week, the business announced its latest investment: £15m into APC, the UK’s largest independent parcel delivery network. The deal structure is fairly convoluted and Logistics Development Group has set up a new senior debt facility of £30m to help support the deal.

Given its size, managing the balance sheet smartly remains a risk for Logistics Development Group. It ended last year with cash and cash equivalents of £30m, but the tender offer and other corporate activity since then means that the balance sheet may look very different the next time the company publishes it.

However, I see this penny stock as having significant long-term potential. It is selling for a sizeable discount to net asset value as it stands. If companies in which it has stakes perform well, that value could rise over time. I therefore see the share as one for investors to consider.

The post This penny stock rose 49% in a year. Here’s why it may still be a terrific bargain appeared first on The Motley Fool UK.

But some recent developments led me to buy more shares in this company – here’s why.

A nice problem: lots of cash getting dusty

The company in question is Logistics Development Group (LSE: LDG).

With a market capitalisation of £75m, this is a fairly modest operation. It also has significant shareholders that have specific (and competing) visions of how the company ought to be run. I see that as a risk for a small shareholder like me, but it is also a potential opportunity.

Last year, an activist investor launched a campaign — ultimately unsuccessfully — seeking to wind down the company and distribute its assets to shareholders.

The reason for that is interesting in my view. LDG is basically sitting on a large pile of cash. The group’s cash position last month was about £44m, almost 60% of its entire current market capitalisation.

Unlocked value in investment portfolio

Not only that, but the company owns stakes in a number of other firms.

For example, it is a shareholder in Alliance Pharma. Last week, it was announced that Alliance had agreed to a takeover bid at a price 41% higher than its share price the day before the takeover was made public.

LDG indirectly owns 13% of Alliance. It will receive an equivalent stake in the new private company. Last month, LDG also announced that it had redeemed a £10m debt note it held in another company for £13.1m.

At that point, the company also laid out a plan I think is aimed at mollifying its activist shareholder, proposing a tender offer at 19p per share to return up to £21m to shareholders.

If that is approved by shareholders (which I expect it will be), LDG will buy back a certain amount of shares for 31% higher than they can be bought for on the open market right now.

Why I’ve been buying

That news led me to increase my stake in this penny share. The sizeable discount of the share price versus the proposed tender offer points to ongoing risks.

The tender offer may not complete, for example. Even if it does, its scale is capped, so there is no guarantee of how many shares I may be able to sell back to the company at the 19p price.

Even considering that though, I continue to see potential deep value here. LDG is sitting on a large cash pile it has explicitly set out to reduce by buying back some shares at well above their current price. It is also sitting on a number of investments that, as the debt note sale and Alliance takeover illustrate, could ultimately turn out to be worth more than their current carrying value on the company’s balance sheet.

They may not, of course. But on balance, I reckon LDG is a share that could ultimately be worth substantially more than its current price suggests.

The post Up 28% in a month, I’ve been loading up on this penny share   appeared first on The Motley Fool UK.

A.G. Barr

What it does: A.G. Barr is a drinks company. Its main product is Irn Bru and it has recently added Boost via an acquisition.

By Stephen Wright. Shares A.G. Barr (LSE:BAG) fell after the latest trading update. Narrower margins meant profits came in lower than expected.

I think, however, this is a short-term issue and the long-term picture looks much more positive. That’s why I’ve taken the opportunity to buy the stock for my portfolio.

My investment thesis for A.G. Barr is based on two ideas. One is that margins are going to expand as the company completes its integration of Boost Drinks, which should boost(!) profitability. 

The other is the price-to-earnings (P/E) multiple is going to increase as a result. Right now, the stock is trading at a P/E ratio below its 10-year average and I expect this to  improve if profits grow.

A.G. Barr has recently changed its CEO, which makes the strategy a little uncertain going forward. But I think there’s enough margin of safety in the stock at the moment to make it worth the risk.

Stephen Wright owns shares in A.G. Barr.

Alphabet  

What it does: The owner of Google and YouTube, Alphabet is one of the largest technology companies in the world. 

By Edward Sheldon, CFA. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) shares have pulled back sharply in recent months and I’ve been buying the dip. 

There are a few reasons the stock has fallen. One is that regulators, including the US Department of Justice, are targeting the company due to its dominance. Another is that there are some concerns that Google’s search business could be disrupted by ChatGPT and other generative AI applications. 

These are both genuine risks. However, after the pullback, I reckon a lot of uncertainty is priced in. In my view, the valuation (the P/E ratio is in the low 20s), and risk/reward proposition, now look attractive. 

Looking ahead, I’m convinced that Alphabet has plenty of growth potential. Today, YouTube revenues are growing at an impressive rate as are cloud computing revenues. And in the long run, Waymo’s self-driving taxis – which are on the roads in some US cities already – could provide a whole new source of revenue. 

Overall, I’m excited about the outlook for this stock. 

Edward Sheldon owns shares in Alphabet .

Aston Martin Lagonda

What it does: Founded in 1913, Aston Martin is a luxury sports car manufacturer that designs, engineers and produces sports cars in Warwickshire, and sells them worldwide.

By Harvey Jones. I thought long and hard before buying shares in James Bond car maker Aston Martin Lagonda (LSE: AML). Then stupidly, I went ahead and did it anyway.

I’d been monitoring the FTSE 250 stock on and off for years, watching the shares fall until I didn’t think they could fall anymore.

First-half results disappointed, as Aston Martin’s results usually do, but on 24 July the board flagged up a big second-half recovery and I thought why not?.

On 16 September I dived in and exactly two weeks later my shares crashed 33% after the board warned full-year profits would decline due to supply chain disruption and weak demand in China. So no second-half recovery, then.

No worries, I’m sure it’ll happen next year. Or the year after that. I won’t sell but it could be a long wait before I recoup my big early loss, assuming I ever do. 

I don’t think the global economy or luxury demand is about to roar into life, while Aston Martin still has to make the shift into electric motors. I’m bracing myself for a bumpy ride.

Harvey Jones owns shares in Aston Martin.

Aviva

What it does: Aviva is one of the UK leading financial services providers, as well as a big player in Ireland and Canada.

By Royston Wild. Aviva’s (LSE:AV.) share price has leapt to six-year peaks above 500p recently. But on paper it still looks remarkably cheap, so I’ve increased my stake for the second time since early June.

The FTSE 100 insurer trades on a forward price-to-earnings growth (PEG) ratio of 0.5. A reading below 1 indicates that a stock is undervalued.

On top of this, the prospective dividend yield is a mighty 7.2%. That’s more than double the Footsie average of 3.5%.

Aviva’s shares have increased as expectations for multiple interest rate cuts have strengthened. On the downside, this leaves the company at risk of sharply reversing if the Bank of England fails to deliver what the market expects.

But I don’t care. I invest for the long term, and reckon Aviva’s share price will rise much higher from current levels. I predict that steady demographic changes, allied with growing interest in financial planning, will drive demand for its products through the roof.

A strong balance sheet should allow Aviva to effectively exploit this opportunity, too. Its Solvency II capital ratio has moved further above 200% in 2024.

Royston Wild owns shares in Aviva.

Logistics Development Group

What it does: Logistics Development Group is an investment vehicle that, through a subsidiary, owns stakes in listed and private businesses.

By Christopher Ruane. I own a few penny shares in my portfolio already and recently added another one: Logistics Development Group (LSE: LDG).

The company’s operating subsidiary owns stakes in businesses like Finsbury Food Group and Alliance Pharma.

An activist shareholder has requisitioned a general meeting, hoping shareholders will vote for the firm to stop making new investments and prioritise returning cash to shareholders.

This is an unusual investment for me but I see potential value. The share has been trading at a significant discount to net asset value. At the end of May, net assets were £99m, of which net cash was close to £32m. The current market capitalisation is £64m.

The general meeting could help close that valuation gap. One risk when selling unlisted investments is whether their paper valuation can actually be achieved in the market. But I think the current Logistics Development Group share price looks like a bargain.

Christopher Ruane owns shares in Logistics Development Group.

Next

What it does: Next is a retailer selling clothing, homeware and beauty products both online and in its 800 stores.

By James Beard. The Economist recently described Next (LSE:NXT) as a “boring brand”. And yet record revenue and earnings for the year ended 27 January 2024 (FY24) shows that slow and steady sometimes wins the race.

In FY25, it expects to do better with a pre-tax profit of £995m. It therefore trades on a reasonable 15.9 times forward earnings.

As well as growing organically, it’s been building equity stakes in other fashion retailers. It plans to further expand overseas and hopes to generate additional income from licensing its brands and technology platform to third parties.

And with approximately 60% of its revenue being generated online, it’s successfully managed to embrace the internet.  

But there are potential challenges. Fashion consumers are notoriously fickle. And a lacklustre British economy could also impact sales.

However, I think the company’s well positioned to continue to grow which is why I recently added the stock to my portfolio.

James Beard owns shares in Next.

Next

What it does: A multinational retailer of clothing, footwear, accessories, and homeware with 700 stores worldwide.

By Mark David Hartley. At almost £100 a share, Next (LSE: NXT) is one of my more pricey investments. But it’s also the largest clothing retailer by sales in the UK with a well-established brand, diverse product range and rapidly growing online presence. It has a history of consistent financial performance and a relatively reliable dividend track record. The company’s focus on own-brand products gives it greater control over margins and pricing, and its online platform provides a significant source of revenue and growth potential.

Retail is highly competitive, though, and economic downturns or changing consumer habits could negatively impact sales. Additionally, its reliance on online sales could be affected by technological disruptions or increased competition from other e-commerce platforms. Even fluctuations in the British pound could impact Next’s international operations and financial results. But with a price-to-earnings ratio of 14.7, I think the current price offers good value and has room to grow.

Mark David Hartley owns shares in Next.

Windward

What it does: Windward’s AI platform leverages advanced machine learning and behavioural analytics to provide real-time insights and predictive intelligence for the maritime industry.

By Ben McPoland. I recently added to my holding in Windward (LSE: WNWD) after the small-cap stock dropped 25%. The £117m company helps organisations mange risk on the high seas. Unfortunately, there’s a lot more of that these days with wars raging and geopolitical conditions worsening.

The firm said it had made a strong start to H2, winning two new government customers for a total of $1.9m of annual contract value (ACV). This adds to the $37.2m of ACV it reported in H1, which represented 35% year-on-year growth.

The biggest risk here is that the business is still loss-making. However, management expects that to change over the next couple of years. On 10 October, CEO and co-founder Ami Daniel said: “We are laser-focused on achieving profitability while continuing to execute against our product roadmap to deliver an enhanced offering for our customer base.”

Speaking of customers, Windward has already attracted blue-chip names like BP, Shell, and Interpol. And adoption of its recently launched MAI Expert, a proprietary generative AI agent, has been strong, with six existing and several new commercial customers signing up.

At the end of June, the company had a cash balance of $13.8m.

Ben McPoland owns shares in Windward.

Yu Group

What it does: Yu Group is an independent supplier of gas, electricity, water and metering services to UK business customers.

By Roland Head. I recently bought some Yu Group (LSE: YU.) shares after this £270m company reported a 60% rise in half-year revenue and a 52% increase in earnings per share.

Changing energy prices can affect revenue and profits at utilities. But I was excited to see this financial growth was backed by a big increase in Yu’s customer base.

The company says that the number of meter points supplied rose by 82% to 72,300 during the first half of this year. This was paired with a 110% increase in the equivalent volume of energy supplied to 1.0TWh.

Smaller energy suppliers have a chequered record in the UK. Many have failed in recent years. I think Yu will need to stay disciplined as it expands to avoid the risk of financial problems.

However, with the stock trading on seven times earnings and offering a 4% yield, I think Yu shares could do well if growth continues.

Roland Head owns shares in Yu Group.

Zscaler

What it does: The company focuses on cloud-based cybersecurity solutions primarily for enterprise customers.

By Oliver Rodzianko. I recently invested in Zscaler (NASDAQ:ZS) as its valuation has become significantly more attractive. For example, its forward price-to-sales (P/S) ratio is currently 58% below its five-year average, making it a compelling opportunity.

Zscaler’s investment potential is further supported by a consensus of 39 analysts, forecasting a 21% growth in revenue by fiscal 2026, following an equal 21% growth estimated for 2025. Additionally, the consensus price target suggests a 28.5% gain over the next 12 months.

However, the company has not yet reported any official net income, though it’s nearing profitability. Any delays in reaching this milestone could result in further losses, as the stock is already down 19.5% year-to-date.

That said, cybersecurity is a rapidly growing industry, and I wanted to be part of it. While valuations in this sector tend to be high, Zscaler offered the most attractive option I could find.

Oliver Rodzianko owns shares in Zscaler.

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