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Most buyers shun dangerous penny shares in favour of established mega-cap corporations. 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 by means of the gears in current months. Actually, the share worth has now climbed over 80% since Could.
Certain, a few of this momentum may be all the way down to markets having a critically good yr. However there have been a number of different developments that appear to have introduced out the consumers.
For one, the European Common Security Regulation (GSR) comes into impact subsequent yr. Its objective is to enhance street 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 turning into distracted or drowsy.
Such a transfer clearly performs into the fingers of Seeing Machines. Certainly, the variety of autos geared up 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 accordance with its replace in August — up from 2.21m on the identical time within the earlier yr — it doesn’t really feel outlandish to say that demand from producers is ramping up.
The agency’s Guardian product – designed for use in business fleets — can be exhibiting glorious development.
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 because of the latter’s international distribution community.
So, is that this penny inventory a slam-dunk funding from right here? Effectively, there are not 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 numerous events. Actually, 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 remains to be loss-making and burning by means of money.
If this doesn’t change quickly, maybe because of development slowing unexpectedly or contracts hitting snags, that pretty acquire (and extra) could possibly be misplaced.
There’s additionally an opportunity the inventory might endure closely if normal market sentiment shifts. In such a situation, Seeing Machines may be chucked out with the tub water, even when it continues to drop encouraging information.
And as I kind this (18 November), there are definitely a number of jitters within the investing world.
Security in numbers
I gained’t deny that efficiency over current occasions has been pretty to behold. If half-year numbers subsequent March present proof of but extra progress when it comes to gross sales development, it would simply proceed.
However that ‘if’ can’t be missed. As a lot as I’ve loved the journey 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 choose 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.
