Fundamentally strong penny stocks
Penny stocks must be handled with care, since they are growth companies that are on their way up and can be multibaggers depending on the industry they are in and the fundamentals of the firm. Similarly, in the short to medium term, there are two stocks that can be purchased in for good gains in a fair amount of time.
Here are two fundamentally strong penny stocks to consider adding in the event of a stock price decline:
International Conveyors Ltd.
| BSE Code: | 532779 |
| NSE Code: | INDUSINDBK |
International Conveyors Ltd. is a manufacturer and marketer of solid woven fabric reinforced fire retardant, anti-static conveyor belting impregnated with polyvinyl chloride (PVC) and covered with PVC. The company is a small-cap corporation with a market capitalization of Rs. 399 crores.
With a PE of 25.08, the firm is attractively positioned in comparison to the sector’s PE of 173.96. The company’s net profit has decreased both year over year and quarterly, yet it has transitioned from a loss-making to a profit-making organisation in past fiscal years.
Revenue has grown at a 14.66 percent annual pace over the last five years, compared to an industry average of 3.23 percent. In terms of free cash flow, the company had a solid free cash flow of Rs. 47.25 crore in fiscal year 21. The company’s all-time low and high prices are Rs. 7.78 and Rs. 858.4, respectively, with the most recent trading price of Rs. 59.2.
Another plus for the corporation is that it is even owned by international entities, with a 4.63 percent ownership as of March 2022. The corporation also has manageable debt on its records. AIA Engineering, Cummins, and Thermax are competitors.
PROS
- Company has reduced debt.
- Company is almost debt free.
- Company has delivered good profit growth of 38.90% CAGR over last 5 years
- Debtor days have improved from 62.88 to 44.81 days.
- Promoter holding has increased by 1.61% over last quarter.
CONS
- Company has a low return on equity of 8.99% for last 3 years.
- Earnings include an other income of Rs.13.53 Cr.
Rubfila International Ltd.
| BSE Code: | 532779 |
| NSE Code: | INDUSINDBK |
Rubfila International Ltd. is a rubber company that manufactures heat resistant latex rubber thread. Colored rubber threads, furniture grade rubber thread, rubber threads for medical purposes, rubber thread for food/meat packing, and other products are among the company’s offerings.
In comparison to the sector’s PE, the company’s PE is once again appealing. In addition, the corporation pays dividends. 10 highest dividend paying stocks with pros and cons.. Another appealing feature of the organisation is that it is debt-free.
It has a Return on Equity of over 18%, which is higher than the industry average of 15%. In March of this year, the company announced the start of commercial production of a new production line at its Madathukulam, Palani Taluk, Dindigul District, Tamilnadu facility.
PROS
- Company is almost debt free.
- Company is expected to give good quarter
- Company has delivered good profit growth of 29.95% CAGR over last 5 years
- Company has been maintaining a healthy dividend payout of 28.28%
CONS
- Promoter holding has decreased over last quarter: -5.64%
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