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Most traders shun dangerous penny shares in favour of established mega-cap corporations. I do the identical, with one exception.
And that exception has been doing somewhat nicely not too long ago.
Pedal to the ground
AI-powered driver-monitoring system specialist Seeing Machines (LSE: SEE) has been transferring by means of the gears in latest months. In truth, the share worth has now climbed over 80% since Might.
Certain, a few of this momentum is perhaps right down to markets having a significantly good yr. However there have been just a few different developments that appear to have introduced out the patrons.
For one, the European Normal Security Regulation (GSR) comes into impact subsequent yr. Its purpose is to enhance highway security and cut back deaths and accidents by making superior security applied sciences obligatory. This consists of becoming camera-based driver monitoring methods in all new automobiles — the kind 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 automobiles outfitted with its system rose 36% in This fall FY2025 in comparison with the earlier three-month interval. With its tech in 3.73m automobiles in keeping 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 industrial fleets — can also be displaying wonderful progress.
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 world distribution community.
So, is that this penny inventory a slam-dunk funding from right here? Effectively, there aren’t 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. In truth, it’s solely simply returned to the place it was at the beginning of the 2025. And regardless of latest progress and boasting a market cap of over £200m, this firm continues to be loss-making and burning by means of money.
If this doesn’t change quickly, maybe because of progress slowing unexpectedly or contracts hitting snags, that beautiful acquire (and extra) might be misplaced.
There’s additionally an opportunity the inventory may endure closely if common market sentiment shifts. In such a situation, Seeing Machines is perhaps chucked out with the tub water, even when it continues to drop encouraging information.
And as I kind this (18 November), there are definitely just a few jitters within the investing world.
Security in numbers
I gained’t deny that efficiency over latest instances has been beautiful to behold. If half-year numbers subsequent March present proof of but extra progress when it comes to gross sales progress, it’d simply proceed.
However that ‘if’ can’t be ignored. As a lot as I’ve loved the trip and would love the inventory to commerce for kilos somewhat than pennies, that is exactly why solely a small quantity of my wealth is invested right here.
Personally, I desire taking a diversified method and spreading my cash round.
It’s true — penny shares have the potential to dramatically change an individual’s fortunes, typically in a really quick period of time. As all the time, nevertheless, it pays to maintain one’s eyes vast open.
