Penny stocks are notoriously adventurous and volatile. But for the few smart investors who can spot the long-term potential, they can go on to deliver phenomenal life-changing returns. That’s why they remain so popular despite their extreme levels of risk.
One institutional analyst that constantly prowls the micro-cap space is Peel Hunt. And for 2026, its team of experts have highlighted two tiny companies with explosive potential: Jadestone Energy (LSE:JSE) and Shield Therapeutics (LSE:STX).
With market caps of £124m and £113m respectively, these businesses are just over the penny stock threshold of £100m. But with both shares trading for less than 25p, they’re still considered micro-cap opportunities for many investors.
So, why is Peel Hunt so bullish? And how much money could investors make if they buy shares today?
Oil & gas turnaround
Jadestone is a bit of a unique player within the oil & gas sector. Rather than try to find new discoveries, it acquires assets that are close to the end of their lifespan within the Asia-Pacific region. The goal is to buy projects cheaply and then extend their production life through operational efficiency improvements.
This strategy can be highly lucrative for a small player like Jadestone. And if the business hits its production target of 40,000 barrels of oil & equivalents per day, the team at Peel Hunt believes free cash flow could skyrocket, sending the stock price all the way to 50p by this time next year – a 122% gain from current levels.
However, to succeed, Jadestone will need to deliver solid operational execution. And in recent years, that’s proven to be quite challenging. Its flagship Montara project has been riddled with problems such as defects, corrosion, and multiple unplanned shutdowns.
Since repairing old production assets is expensive, the balance sheet has also come under strain, leaving many investors understandably sceptical. But if management can get operations back on track, Peel Hunt’s aggressive forecast might be spot on. Jadestone Energy is a classic high-risk, high-reward investment.
Turning iron into gold
The second near-penny stock on Peel Hunt’s list is Shield Therapeutics – a commercial stage pharma business focused on iron deficiency. Its flagship Accrufer oral iron supplement is already widely available throughout Europe. However, following a recent partnership with Viatris, Accrufer is going to the US healthcare market.
This culminated in the third quarter of 2025 being the strongest in the company’s history, with net revenues and average selling prices jumping by double-digits. And to top it off, free cash flow generation is also expected to turn positive before 2026 kicks off.
Considering the widespread issue of iron deficiency in the US, Shield Therapeutics is looking at an enormous growth opportunity. And it’s one that Peel Hunt thinks could send the share price flying to 15p – almost 35% higher than current levels.
But like Jadestone, performance next year will require good execution. Entering a new market is a lot more involved than simply making a product available. Shield Therapeutics now needs to convince US doctors to prescribe Accrufer to patients instead of existing therapies – something that’s far easier said than done.
Both of these near-penny stocks have impressive potential. But they also come with a single point of failure – a critical risk investors must consider carefully.
