5 Best Penny Stocks to Buy Over Christmas in Nigeria: Investors Make Big Money

Penny stocks continue to show resilience and growth in 2024.

As of the close of Friday, December 13, 2024, 23 of these low-cost stocks, which are typically valued at less than N5.00, have outperformed Nigeria’s inflation rate in November 2024 year to date (YTD) The ten best performing stocks include Tantalizers Plc, RT Briscoe, Veritas Assurance, Cornerstone Insurance, Guinea Insurance, Sovereign Insurance, WAPIC, Deap Capital, TIP Initiatives and Consolidated Hallmark.

Not only have these stocks outperformed inflation, they have also proven that impressive growth can be achieved even in difficult economic conditions.

Nigeria’s inflation rate rose to 34.60% in November 2024, compared to 33.88% in October 2024, reaching a 26-year high.

Inflation is 6.40% higher year-over-year from 28.20% in November 2023.

Such high inflation erodes people’s purchasing powerMoney is important, which is why investors need to focus on real returns, where nominal returns are adjusted for inflation.

Inflation and Real Return Return on Capital

In an inflationary environment, nominal returns, which are the actual percentage gain or loss on an investment, can be misleading.

Real returns take inflation into account and more accurately reflect capital returns. The actual growth in purchasing power.

This distinction is particularly important because traditional asset classes such as bonds and cash equivalents often struggle to provide positive real returns in inflationary periods.

On the other hand, stocks generally have the potential to outperform inflation and deliver positive real returns, although the performance of individual stocks can vary greatly.

Some stocks may experience negative real returns if their growth does not exceed inflation. It is important for investors to understand the total return of stocks, including capital gains and dividend yields.
This dynamic was evident in 2023 as some stocks delivered positive real returns and beat inflation at 28.93%, while others lagged behind.
For example, within the penny stock category, Prestige Assurance Plc delivered a total return of 23.84% in 2023.
With inflation at 28.93%, however, Prestige Assurance delivered a real return of -5.09%. This highlights that even positive nominal returns can result in negative real returns due to inflation.
In contrast, larger market capitalization stocks such as Cadbury Plc delivered a strong performance in 2023, delivering a total return of +62%. Adjusting for inflation, Cadbury delivered a real return of 33.17%, highlighting its ability to deliver significant growth over the period.
Considering the current inflation rate, these penny stocks have not only weathered the economic storm, but have also outperformed the broader market:

Guinea Insurance: +110.34% YTD

Guinea Insurance is one of the best performing penny stocks of 2024, with its price up 110.34% year to date, making it the fifth best performing penny stock on the Nigerian Exchange (NGX).

The stock also has high trading liquidity, with 305 million shares traded in the past three months, making it the 27th most traded stock on the NGX.

Guinea Insurance operates in the financial services/insurance industry and is currently the 110th most valuable stock on the NGX by market capitalization N3.745 billion
For the first nine months of 2024, the company’s pre-tax profit increased 854% year-on-year to N568 million, a 14% increase over its full-year pre-tax profit for 2023.
However, certain factors may make the company less attractive to some investors. The lack of dividend payments over the past five years has limited total return potential.
While its beta of 0.830 suggests low market volatility and is attractive to risk-averse investors, this characteristic must be weighed against its historical underperformance in 2023, when the share price posted an annual gain of 45%, compared to its impressive performance in 2024

Cornerstone Insurance: YTD +123.57%

Cornerstone Insurance ranks fourth among the best performing penny stocks with an impressive annual gain of 123.57% in 2024, following a gain of 133.33% in 2023, cementing its reputation for consistent growth.

With a market capitalization of N57.2 billion, it ranks 48th among the most valuable stocks on NGX. The stock has traded 98.8 million shares in the past three months, highlighting its strong liquidity.

Cornerstone’s pre-tax profit increased 57% year-on-year to N26.59 billion in the first nine months of 2024, reflecting solid financial performance and investor confidence.
The price is only 6% below its 52-week high, reflecting its recent growth and may limit recent gains.

VERITASKAP YTD Growth of 245.95%

Veritas Kapital Assurance Plc is currently ranked 76th on the NGX by market capitalization with a market capitalization of N17.2 billion

As of December 13, 2024, the market capitalization is 245.95%. Year-to-year growth, making it the third best performing penny stock on the NGX, following an 85% year-to-year gain in 2023.

Over the past three months, 543 million shares worth N762 million were traded, making it the 18th most traded stock, highlighting strong investor interest.

On December 16, 2024, Veritas Capital joined at 1.24N, 31.11% below its 52-week high of 1.80N on October 3, 2024, reflecting the recent decline, likely due to profit-taking.
The stock’s future performance depends on market sentiment, fundamentals and demand, with the current price representing a potential buying opportunity for investors.
Veritas Kapital’s low beta of 0.63 suggests a low risk of market volatility, making it attractive to risk-averse investors, although it may lag during market rallies.
The company has consistently reported pre-tax profits for the past five years. This trend continued in 2024, with pre-tax profits of N2.96 billion for the first nine months of 2024.
However, the company does not have a consistent record of dividend payments, which could be seen as a deterrent, especially for income-seeking investors.

RT Briscoe: +264.18% YTD

RT Briscoe is currently the second best performing penny stock on the NGX, with an impressive YTD (year-to-date) gain of 264.18% as of December 13, 2024.

This builds on the stock’s strong performance in 2023, when the stock posted a YTD gain of 158%.

However, on Monday the share price closed at N2.44, 43.65% below its 52-week high of N4.33 reached on August 30, 2024.
With prices well below the peak, this decline could represent an opportunity for value investors to enter at a lower price.
A major positive development is RT Briscoe’s return to profitability in 2024. Profit before tax was a loss of N843 million for the year, a significant turnaround from the loss of N513 million recorded previously.
This turnaround reflects improved business operations and could boost investor confidence and position RT Briscoe for further growth.

Tantalizers: +268% YTD

Tantalizers Plc is the best performing penny stock on the NGX, up a whopping 268% as of December 13, 2024.

As of the closing price on December 16, 2024, it was N1.85 per share, corresponding to a slight increase of 0.5% from the previous closing price of N1.84. However, the price is still 5.64% lower than the 52-week high of N1.95 reached on December 16, 2024.

Trading activity was active, with a three-month trading volume of 499 million shares, indicating strong liquidity and market interest.

Despite the impressive share price performance, investors should be cautious about Tantalizers Plc. The positive momentum seems to be driven by other factors rather than solid fundamentals.

The company reported a pre-tax loss of N231.56 million for the first nine months of 2024, continuing the trend of losses in 2023 and 2022.

Without clear signs of operational turnaround or improved profitability, the current price increase may not be sustainable in the long run.

More of the best performing penny stocks this year 2024:

Sovereign Insurance: +102.38% YTD

WAPIC: +97.06% YTD
Deap Capital: +96.55% YTD
TIP Program: +95.65% YTD
Consolidated Hallmark: +88.44% YTD
These stocks have posted impressive gains in 2024, reflecting the strong interest among investors in penny stocks despite the underlying market dynamics. Conditions.

Investors are advised to evaluate each company’s fundamentals, market trends and liquidity to determine sustainability before entering a position.

Published in Finance

Okoye Izuchukwu

Okoye Izuchukwu is a seasoned financial market writer and trader, specializing in both Nigerian and global markets. With a sharp understanding of market dynamics and a flair for insightful analysis, he simplifies complex financial concepts into compelling and accessible content. Drawing on his hands-on trading experience and in-depth research, Okoye delivers valuable insights to help readers navigate the constantly changing landscape of finance with confidence.

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