While most of the market participants have been reeling under pressure in the last 1 year and have only started recovering since July 2022, penny stock Kaiser Corporation has given exceptional returns in the last 1 year, making millions for its investors at a time when most were at a loss.
The stock has surged around 21,000 percent in the last 1 year from around ₹0.38 in August last year to trade around ₹80.50 currently.
An investment of ₹1 lakh in August last year would have turned to ₹2.11 crore today.
The scrip has also given multibagger returns in each month from December 2021 to April 2022. Since May the stock has given positive returns in 2 months and negative in the other 2 months.
Let's take a look at the monthly trends
The stock surged 163 percent in December 2021 followed by a 160 percent rise in January 2022. It extended gains, adding 163 percent in February 2022, 173 percent in March 2022, and finally 151 percent in April 2022.
However, in May 2022, the stock lost 44 percent but then recovered 7 percent in June. It again fell 7 percent in July, when most of the markets were turning positive, bot has regained 18 percent in August so far.
Just in 2022 yeat-to-date, the scrip has gained 2,785 percent, from ₹2.79 in December 2021.
Kaiser Corporation Limited, through its subsidiaries, provides turnkey project management and engineering services in India. It also engages in printing labels and cartons, packaging materials, magazines, and articles of stationery. The company was formerly known as Kaiser Press Limited and changed its name to Kaiser Corporation Limited in November 2013. Kaiser Corporation Limited was incorporated in 1993 and is based in Mumbai, India.
In the June quarter, the firm's net sales came in at ₹11 lakh, down 27.55 percent from ₹15 lakh in June 2021 quarter. Its net loss was 0 in June 2022 from ₹1 lakh in the year-ago quarter.
Despite the stellar return, it is important to note that penny stocks are high-risk stocks and not suitable for investors with a risk-averse approach. Only high-risk investors should invest in such stocks and in very small weightage. Please consult your financial advisor before making any changes to your portfolio.
Challenges associated with penny stocks emanate from the fact that these are very small companies with negligible analyst coverage, very limited information on the public domain and often inaccessible insights from the management. Along with these fundamental challenges, the stock specifically is vulnerable to challenges pertaining to the security of such characteristics as the vulnerability to risks of illiquidity, impact cost and typical challenges associated with slim volumes.
Unless there is a really strong reason, investing in penny stocks is not generally recommended to serious, long-term investors. With the larger universe conveniently offering to mitigate such basic stock-specific risks along with opportunities with an efficient, commensurate risk-reward payoff, taking on the risks associated with penny stocks seems unnecessary with an elevated probability of being capital destructive.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.
