Penny stocks are famous for giving multibagger gains to investors in short periods of time.
This is proved by ten penny stocks which have given a gain of up to 72 per cent in just 10 sessions.
The return given by these stocks compares very favourably with the fact that in the same period, the BSE Smallcap index lost 5 per cent.
Roto Pumps – 72% gain in 11 sessions
Roto Pumps surged 72 per cent in just 11 sessions till today.
The shares of Roto Pumps are being bought heavily by some unknown investors.
Qoppa Trading sold 89,077 shares of Roto Pumps in a bulk deal on BSE.
The shares were sold for Rs 97.62 each. The total sale value was Rs 87 lakh.
Indosolar – 64% gain in 10 sessions
Indosolar has also put up a spectacular show with a gain of 64 per cent in just ten trading sessions.
The reason for the heavy buying of the penny stock is because the Q4FY17 results were good.
The losses were reduced to Rs 19.11 crore from Rs 38.31 crore on a YoY basis, signaling that a turnaround is imminent.
Also, there is progress with regard to asset reconstruction which has sparked home of a revival.
(How to Become a Penny Stock Millionaire in 2017)
Padmalaya Telefilms – 62% gain in 10 sessions
Padmalaya Telefilms has also given a spectacular gain of 62 per cent in just 10 sessions.
It appears that some HNIs are aggressively buying the multibagger penny stock.
The total gain from Padmalaya Telefilms is Rs. 830 crore since December 2016.
TPI India – 61 per cent gain
TPI India is next on the list of multibagger stocks with 61 per cent gain.
The reason for the steep rise in TPI India’s stock price is not known.
The BSE is believed to be examining whether there is some disconnect between the stock price and the fundamentals.
Shalimar Wires – 55% gain
Shalimar Wires has given a gain of 55 per cent because of its blockbuster Q4FY17 results.
The net profit of Shalimar Wires surged to Rs 22.16 crore as compared to a paltry Rs 0.67 crore on a YoY basis.
The sales increased to Rs 27.18 crore during the quarter.
Other penny stocks
Several other stocks such as HOV Services, Birla Transasia Carpets, Modern Dairies, AF Enterprises and Contil India gave magnificent gains in excess of 50 per cent during the same period.
More gains expected?
After such steep gains, whether any more gain can be expected from these stocks is difficult to ascertain.
Penny stocks can be very dangerous for investment because they can be easily manipulated by unscrupulous operators.
So, investors have to be very, very careful with such stocks.
These business prospects of these stocks coupled with the integrity and reliability of the management has to be examined minutely before any investment decision is taken.
In fact, it is better to err on the side of caution and to buy good quality small-cap and mid-cap stocks instead of penny stocks.