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Most buyers shun dangerous penny shares in favour of established mega-cap firms. I do the identical, with one exception.
And that exception has been doing relatively nicely just lately.
Pedal to the ground
AI-powered driver-monitoring system specialist Seeing Machines (LSE: SEE) has been shifting by means of the gears in current months. In actual fact, the share value has now climbed over 80% since Could.
Certain, a few of this momentum could be all the way down to markets having a severely good 12 months. However there have been a couple of different developments that appear to have introduced out the patrons.
For one, the European Basic Security Regulation (GSR) comes into impact subsequent 12 months. Its aim is to enhance street security and scale back deaths and accidents by making superior security applied sciences necessary. This contains becoming camera-based driver monitoring techniques in all new automobiles — the type that may spot when somebody is changing into distracted or drowsy.
Such a transfer clearly performs into the fingers of Seeing Machines. Certainly, the variety of automobiles geared up with its system rose 36% in This fall FY2025 in comparison with the earlier three-month interval. With its tech in 3.73m automobiles in line 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 displaying wonderful progress.
Seeing Machines has continued to win backers too. Mitsubishi Electrical Mobility now owns practically 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? Properly, 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 value slip into reverse on various events. In actual fact, it’s solely simply returned to the place it was initially of the 2025. And regardless of current progress and boasting a market cap of over £200m, this firm remains to be loss-making and burning by means of 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.
There’s additionally an opportunity the inventory may endure closely if normal market sentiment shifts. In such a state of affairs, Seeing Machines could be chucked out with the bathtub water, even when it continues to drop encouraging information.
And as I sort this (18 November), there are definitely a couple 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 when it comes to gross sales progress, it would simply proceed.
However that ‘if’ can’t be neglected. As a lot as I’ve loved the experience and would love the inventory to commerce for kilos relatively than pennies, that is exactly why solely a small quantity of my wealth is invested right here.
Personally, I favor taking a diversified strategy and spreading my cash round.
It’s true — penny shares have the potential to dramatically change an individual’s fortunes, generally in a really quick period of time. As at all times, nonetheless, it pays to maintain one’s eyes huge open.
