Last week, I screened the market for penny stock opportunities. I didn’t see much that excited me, to be honest.
However, one stock did jump out at me due to its share price momentum. Believe it or not, this name has outperformed Micron, Marvell, AMD, and a ton of other red-hot growth stocks this year.
An introduction to Hardide shares
The stock I want to highlight today is Hardide (LSE: HDD). It’s a small UK company that provides advanced tungsten carbide/tungsten metal matrix composite coatings that increase the life of critical metal parts in abrasive, erosive, corrosive, and chemically aggressive environments.
It currently trades for around 78p, meaning that £1,000 buys 1,282 shares (ignoring commissions and trading spreads). At today’s share price, its market-cap is about £60m.
Why is the share price soaring?
Now, as mentioned above, this stock has some serious share price momentum at the moment. Since the start of December, it’s risen over 1,000%.
As for what’s driving this momentum, its contract wins from a customer in North America in the energy space. The first came in early December and was worth $1.75m. There were then two deals in February, worth $1m and £1.8m respectively.
In April, there was a deal worth £1.8m. Then, in May a deal worth £2.4m was announced.
Note that management advised that this latter deal will “materially improve” revenue and overall financial performance expectations for FY26.
Strong results
Looking beyond all these orders, Hardide also produced a fantastic set of first-half results in May. Here, revenue (for the six months to 31 March) was £4.8m versus £2.8m a year earlier, while basic earnings per share was 1.6p versus -0.1p.
Insider buying
One other thing to note is that the company has seen some insider buying this year. Back in February, four directors (including the CEO and the finance director) scooped up shares (a bullish signal).
Is there an opportunity here?
Is this penny stock worth a look today? Potentially. It’s obviously high risk. Right now, a large chunk of the company’s revenues are coming from one customer so concentration risk’s sky-high (if this customer was to disappear, growth could stall).
Meanwhile, after a 1,000%+ share price rise since December, there’s a high chance of some profit-taking at some point. Buying after that kind of gain is risky.
Yet the fact that this energy customer has been continually coming back for more suggests that Hardide has a strong offer. It’s clearly doing something right.
And there is a lot of industrial construction going on in the US today (data centres, energy infrastructure etc). So demand for metal coatings could remain robust.
Weighing up the risk versus reward, I think Hardide shares could be worth considering as a high-risk speculative play. Sized properly (ie less than 2% of a portfolio), they could have potential.
Should you invest £5,000 in Hardide right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Hardide made the list?
Edward Sheldon does not hold any positions in the companies mentioned
