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Most traders shun dangerous penny shares in favour of established mega-cap firms. I do the identical, with one exception.
And that exception has been doing reasonably nicely lately.
Pedal to the ground
AI-powered driver-monitoring system specialist Seeing Machines (LSE: SEE) has been shifting via the gears in current months. In truth, the share worth has now climbed over 80% since Could.
Positive, a few of this momentum is perhaps all the way down to markets having a significantly good 12 months. However there have been a number of different developments that appear to have introduced out the patrons.
For one, the European Common Security Regulation (GSR) comes into impact subsequent 12 months. Its purpose is to enhance highway security and cut back deaths and accidents by making superior security applied sciences necessary. This consists of becoming camera-based driver monitoring techniques in all new autos — the type that may spot when somebody is changing into distracted or drowsy.
Such a transfer clearly performs into the arms of Seeing Machines. Certainly, the variety of autos outfitted with its system rose 36% in This autumn FY2025 in comparison with the earlier three-month interval. With its tech in 3.73m autos in keeping with its replace in August — up from 2.21m on the similar time within the earlier 12 months — it doesn’t really feel outlandish to say that demand from producers is ramping up.
The agency’s Guardian product – designed for use in industrial fleets — can also be exhibiting wonderful progress.
Seeing Machines has continued to win backers too. Mitsubishi Electrical Mobility now owns almost 20% of the enterprise, serving to to push its tech into new areas due to the latter’s world distribution community.
So, is that this penny inventory a slam-dunk funding from right here? Effectively, there aren’t any ensures in investing.
Dangers stay for this penny inventory
As a holder for a few years, I’ve watched the share worth slip into reverse on plenty of events. In truth, it’s solely simply returned to the place it was firstly of the 2025. And regardless of current progress and boasting a market cap of over £200m, this firm continues to be loss-making and burning via money.
If this doesn’t change quickly, maybe on account of progress slowing unexpectedly or contracts hitting snags, that pretty achieve (and extra) could possibly be misplaced.
And as I sort this (18 November), there are actually a number of jitters within the investing world.
Security in numbers
I received’t deny that efficiency over current instances has been pretty to behold. If half-year numbers subsequent March present proof of but extra progress by way of gross sales progress, it’d simply proceed.
However that ‘if’ can’t be missed. As a lot as I’ve loved the trip and would love the inventory to commerce for kilos reasonably than pennies, that is exactly why solely a small quantity of my wealth is invested right here.
Personally, I want taking a diversified method and spreading my cash round.
It’s true — penny shares have the potential to dramatically change an individual’s fortunes, generally in a really brief period of time. As all the time, nonetheless, it pays to maintain one’s eyes broad open.
