For me, the two stocks below look like positive additions to my portfolio, offering plenty of upside potential and some dividends.

TBC Bank

TBC Bank (LSE:TBCG) said that profits soared in 2021 but the share price has been dragged down by the invasion of Ukraine. Annual profit more than doubled, driven by strong income and the recovery of the Georgian economy. Pre-tax profit for the year to December 31 rose to £226m, representing a sizeable increase from 2020. 

TBC Bank is Georgia’s largest private financial organisation and operates in Georgia, Azerbaijan, Uzbekistan and Israel. While the growth of Georgian business is core to its strategy, the bank has highlighted the importance of its Uzbek operations. “The Uzbek market should give us a competitive edge by providing a material contribution to our growth and diversification over the years to come,” the company said in a statement. 

Like other Georgian stocks, TBC’s valuation is heavily linked with the growth in its domestic market. Last year, the country’s economy grew by 14.6%, while average real GDP growth was equal to 16.3% over the year. But growth has been revised (slightly) downwards from initial estimates this year after the Russian invasion of Georgia. Tbilisi has tried to stay out of the conflict in an attempt not to anger its much larger neighbour. Russian sanctions or aggression could be a big issue for TBC Bank. Despite this risk, I’ve recently bought the stock.

Buying at today’s price, I can expect a 2.8% dividend yield. It’s not world-beating, but it’s definitely good to have.

Cambridge Cognition Holdings

Cambridge Cognition Holdings (LSE:COG) has been tipped to grow by analysts. The Cambridge-based neuroscience firm makes specialist software to help design clinical trials. The firm also makes computerised cognitive assessment platforms that are used by hospitals in 100 countries.

Earlier in April, the firm delivered strong results for the year ended 31 December 2021, with revenue growth of 50%. Sales order intake was also a record for the second year running. Gross profit rose 49% to £8.1m for 2021 from £5.4m in 2020. The improved performance was driven by a record number of clinical-trial contracts. According to Singer Capital Markets, Cambridge Cognition Holdings sales should rise 25% over the next year. New products such as NeuroVocalix could be an important part of revenue growth.

Investing in such a small company with a limited product range can be risky, but I’m bullish on this one and am looking to add it to my portfolio. I also think the macro trends will benefit the firm with brain health assessments becoming more important in years to come amid ageing populations, particularly in the West.

Cambridge Cognition Holdings

The Cambridge-based neuroscience firm makes specialist software to help design clinical trials. It also has computerised cognitive assessment platforms that are used by hospitals in 100 countries, as well as by pharma giant Pfizer.

Yesterday, Cambridge Cognition delivered strong results for the year ended 31 December 2021, with revenue growth of 50% and a record sales order intake for the second year running. Gross profit was up 49% to £8.1m for 2021 from £5.4m in 2020.

Its return to profit was driven by a record number of clinical-trial contracts. Sales rose by half to £10.1m. Singer Capital Markets has projected that this will continuing, tipping sales to rise 25% by next year.

The firm is also rolling out new products, which have the capacity to drive further growth. NeuroVocalix allows brain cognition to be assessed from voice markers without the need of expensive human experts.

The stock had pretty much gone under the radar until it was mentioned in The Times at the beginning of the month. Its share price has since jumped 25%. There are definitely risks when investing in smaller companies. Cambridge Cognition has a market cap of just £50m. But with strong forecasts, I think this stock will continue to grow. It’s also in a sector that can prove very lucrative.

Burberry

Global inflation issues, lockdowns in China and the closing of Russian operations, have all weighed on the Burberry share price in recent weeks. This compounded a fall set off by CEO Marco Gobbetti’s surprise decision to resign last autumn.

Despite this, I think the prospects for this high-end fashion giant remain positive. My thoughts were supported by today’s news that luxury goods conglomerate LVMH had reported strong quarterly growth. Clearly, luxury is still in high demand.

Despite inflationary pressure and economic concerns, I’d suggest that Burberry customers are fairly immune to such issues. I’d go as far to say that demand for Burberry’s products is rather demand-inelastic.

Today Burberry is trading at £15.95, down from a high of £22.67 last year. That’s quite a fall, especially considering that the brand hasn’t raised concerns about its ongoing performance. In fact, it’s been quite the opposite. In January the firm boosted its profit guidance and highlighted growth areas, including record earnings via social media platform Instagram.

Naturally, every stock has its risks. China is one of Burberry’s largest markets and Chinese customers have been known to turn against brands. Equally, the brand’s management will be hoping the current lockdowns don’t carry on too long.

However, I’m bullish on Burberry and will be adding it to my portfolio.

Brain stormer

Neuroscience digital health company Cambridge Cognition Holdings (LSE: COG) has a market cap of just £30.30m. It was slightly higher this morning, but the share price is down more than 8% after publication of its interims for the six months to 30 June. Cambridge operates in a risky area, developing and marketing software products to improve brain health, so investors should expect slips along the way.

Today’s results were in line with management expectations and showed a year-on-year dip in total revenues from £3.26m to £3.21m, and a loss before tax of £390,000, more than double last year’s £150,000. The loss per share tripled from 0.6p to 1.8p, but at least the cash balance has grown, from £1.38m to £1.82m.

Services smile

Cambridge has been working hard to broaden its revenue base to make it less reliant on one-off large contracts, two of which temporarily boosted revenues last year. Services offered the main area of revenue growth, up 57% on last year, which should bring more revenue stability and offset the 26.1% drop in software and 78.6% drop in hardware sales that now make up a shrinking proportion of earnings.

CEO Steven Powell highlighted a 7.4% rise in gross margins and said investment in the sales team boosted its sales order pipeline by 65% to record levels. “This shift to good quality, high margin and repeat business is a welcome move and one which will help to drive our recurring revenue, giving us greater visibility as we continue to build the business.”

City analysts are positive, predicting earnings per share growth of 57% this year rising to 109% in 2018. If they are right, today’s drop could be a buying opportunity, but as I said, approach with caution.

Our friend Elektron

Today’s half-year report to 31 July from cloud-based solutions specialist Elektron Technology (LSE: EKT) has enjoyed a warmer reception, with the share price up more than 5% at time of writing. The stock has doubled from around 7p to 15p since mid-May although with a market cap of just £28m, sudden movements in either direction can always happen.

Elektron has been boosted by growth in its internet of things business Checkit, including Tuesday’s news of a contract win worth more than £225,000 annually in recurring revenue, rising to £600,000. The star of today’s show was its Bulgin business, which reported a 7% rise in sales to £12.5m and a strengthened order book, up more than 20% year-on-year. 

Checkit out

Group revenue rose 3% to £15.3m with the net cash balance rising from £500,000 to £2m over the year. With a strengthened Bulgin order book and the continuing rollout of Checkit, the board expects an improved trading performance in the second half. Elektron may be risky given its size, but it is also one to watch.