Penny shares are those selling for under a pound in the UK. Typically, they’ll also be companies with relatively small market-cap valuations.
Quite a few fitting the bill are due to bring us updates in September. Today, I’m looking at three I think might be worth buying, depending on those figures.
Bricks
Lords Group Trading (LSE: LORD) is in the building materials business. The share price has slumped in 2022, continuing a downward trend since its initial public offering (IPO) on AIM in July 2021. It was an interesting time to float, the year after Covid-19 severely hammered the stock market.
Lord is set to deliver first-half results on 6 September, following July’s trading update. Revenue in the half appeared largely flat, and the company said trading was in line with full-year expectations.
The market expects revenue of £435m, with adjusted EBITDA of £26m. The company also says it’s on track for £500m revenue in 2024.
Why do I think it might be one to buy in September? Investors seem very wary of building-related stocks right now. But we just heard that house prices are up 10% year on year. So Lords might just be undervalued.
Medical
First-half results from EKF Diagnostics Holdings (LSE: EKF) should be here on 20 September. August’s trading seemed positive enough, with things largely in line with 2021.
That seems good to me, considering Covid contributions to medical businesses are declining. The EKF share price has fallen over the past 12 months, presumably as the pandemic factor recedes.
Forecasts suggest a forward price-to-earnings (P/E) ratio for EKF of around 26, which might seem a bit high. But with further predicted earnings growth, that would drop to around 16 by 2024.
EKF is involved in a number of medical diagnostics, from lab-based to point of care in surgeries and clinics. I’m looking for evidence of non-Covid growth potential in the upcoming results. And if I see it, EKF might be one to buy for long-term growth.
Property
I think Regional REIT (LSE: RGL) is worth a closer look, with its shares down nearly 25% in 12 months and falling 33% in five years.
It invests in commercial properties outside of the M25. And considering the wreckage that Covid created, I think that’s actually a reasonably resilient share price performance.
As a real estate investment trust (REIT), it must pay 90% of its rental profits as dividends. The 6.5p paid in 2021 was only just covered by earnings, in a very tough year. But it yielded a very nice 6.9%.
For the current year, the trust has already announced a 3% increase in its latest quarterly dividend, to 1.65p. And forecasts indicate better than 9% for the full year. That suggests confidence, as UK workers increasingly get back to the office. First-half results are due on 15 September.
Penny shares
I’d never buy a penny share just because its price makes it look cheap. And I’d dig into the risks of all these before I made any decision. But I do think results from all of them should be worth investigating.