2 penny stocks that could hit 100p before year end

Penny stocks in most cases carry a higher level of risk when I invest. Due to the small market cap (sub-£100m) there is not much trading activity. This can mean that relatively small buy or sell orders can move prices dramatically.

But if I buy a penny stock that starts to attract attention and outperform, I can benefit from the stock price quickly going higher. Here are two that I think could hit 100p later this year.

Help at hand

Gym Mind (LSE:MIND) is a “Human and business capital improvement specialist”. This sounds a bit woolly to me! In normal terms, it is a business and helps increase efficiency by making workers feel valued. Companies benefit from more productive staff, and employees feel more important.

I think this niche area can do well this year and next. Businesses are becoming more conscious of keeping their staff, especially those working from home. There is also a lot of pressure to show that management cares about workers. By hiring Mind Gym, it helps tick the boxes.

It has been boasted about FTSE 100 the company he works for, who has a big budget.

The current share price is 80p, so I would need to see a 25% rise this year to reach 100p. As the stock has fallen 44% in the past year, it was trading at 100p last September. This is not an unrealistic level to bounce back to, if finances continue to improve post-pandemic.

The pandemic is one of the reasons why the stock is at a depressed level, because businesses have to rotate to deliver online sessions. From seeing how the transition went, I don’t think it was a good move. The risk is that there will be no personal demand for Mind Gym if more companies move in-house.

Hotshot lithium

The second penny deposit on my radar is CleanTech Lithium (LSE: CTL). Energy stocks related to lithium continue to be popular, and this is an example of an extraction supplier at the beginning of the production chain.

CleanTech says it “holds license rights over three substantial lithium projects, located in the lithium triangle, the center of battery-grade lithium production in the world”.

As a result, there is significant upside potential for the share price this year if we get some encouraging project updates on the commercial outlook. The current share price of 72p represents a 97% jump since the IPO last March. On that trajectory, 100p is a possible target price later this year.

The big risk I see here is that the stock price may rise on speculation. The business does not have zero income. Combined with administrative costs, the last half-year report showed a loss of £1.4m. Of course, the company won’t go out of business tomorrow, but it needs to start making profits quickly before investors get concerned.

I think both penny stocks have solid potential. Because of the higher risk, I want to allocate a small amount of money to each company.