Despite negative cues from global markets, the Australian market opened on a higher note on Tuesday. However, investors’ cautious stance couldn’t support the benchmark index ASX 200 much, leading to a fall of 0.33% to 7015, by 12:30 PM AEDT.
Investors are also staying away from small cap stocks as risk-aversion is still prevailing in the market in light of the Russia-Ukraine war. By 12:30 PM AEDT, the ASX Small Ordinaries index (ASX:XSO) was down 0.81% to 3,131.5. However, a few ASX penny stocks are catching investors’ attention by outperforming their benchmark index. Let us have a look at three such stocks.
Tennant Minerals Limited (ASX:TMS)
Tennant Minerals, formerly known as Blina Minerals NL, is an ASX-listed mining company focused on developing a wide portfolio of gold and various other commodities. The company has a market capitalisation of AU$25.3 million and it widened its net loss to AU$2.78 million in FY21, from a loss of AU$0.89 million in FY20.
Today, the company announced that a thick, high-grade, copper with gold intersections has been discovered during diamond drilling at its 100%-owned Bluebird copper-gold prospect. The development has thrilled investors, who have sent the TMS share price soaring over 40.82% to the last traded price of AU$0.069, by 12:30 PM AEDT. The stock witnessed a massive volume spike of over 61.1 million shares, the highest-one day volume since TMS listing in 2021.
AdRabbit Limited (ASX:RAB)
Perth-based AdRabbit is an IT company providing software as a service (SaaS) to small and medium business enterprises. The company provides digital advertising and marketing platform to businesses to help them grow and launch advertising campaigns on social media platforms. Last year, the company reduced its loss to AU$2.89 million, from a net loss of AU$3.37 million in FY20.
Today, RAB shares are gaining attention despite any formal communication by the company. By 12:30 PM AEDT, the stock had rallied to the day’s high of AU$0.028, having gained 33.33% and clocked a volume of over 627K shares, noticeably higher than the last 20-day average of 274K shares.
Terramin Australia Limited (ASX:TZN)
The last stock on our list, Terramin Australia is engaged in the exploration and development of base and precious metals with a market capitalisation of over AU$26 million. On Monday after market close, the company announced that its Algerian joint venture partners have formally endorsed the Tala Hamza Zinc Project, as a result of which the final regulatory approval of this project can now proceed.
The development has sent investors on a buying spree today, leading to a massive 40.9% rise in TZN shares to the last traded price of AU$0.031, by 12:30 PM AEDT. The stock has also clocked the highest one-day volume since March 2020, at over 2.6 million shares.
Bottom Line
Investors should not invest in penny stocks looking solely at lucrative returns. These small cap stocks are highly volatile and are only suitable for investors with high risk appetite. Therefore, risk-averse investors should stick to large and stable companies, and a proper due diligence is always recommended in either case.