What’s up investors, as the global economy reopens, inflationary pressures are expected
to be the norm for some time. So in this video, I’ll be sharing with you,
two top penny stocks which are good inflation bets; and are amongst the best penny stocks
to buy or watch, as the economies reopen. So please make sure you stay through to the end,
as I can bet you have never heard of some of these stocks. So let’s get straight into it.
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thoughts in the comments section below what other penny stocks you currently hold in your portfolio.
So with that said, let’s get straight into it and start with Chico's FAS (CHS)
Chico’s Fas has a share price of $4.39 per share and a market capitalization of $538m..
Its share price is already up by 44.8% in the month and also up by over 190% in the
last 6months, reflecting the broader vaccine rollout enabling brick & mortar shopping.
And The added bonus with this penny stock is that it does pay a dividend with a yield of 2%.
Chico's FAS, Inc. is a cultivator of brands serving the lifestyle needs of fashion-savvy
women of 30 years and older. Their brand portfolio currently consists of three brands:
which are Chico's, White House Black Market and Soma,
which are all specialty retailers of private label women's apparel,
accessories and related products. As of January 1, 2021, they had over 1,308 boutiques and
outlets throughout the United States, as well as an online presence for each of their brands.
In their latest results for 2020, they announced that they had 7 consecutive months of sales growth
and Their total net sales for Q4, 2020 was $386m down from $527m in 2019.
They also ended with a net loss of $79m
significantly higher than $4m from the prior year driven by the pandemic challenges.
They have however been very proactive in their approach to cost reductions
having realised over $235m in savings in 2020 which was 23% greater than was planned.
And For 2021, they are looking to consolidated their sales trends to improve on the back of
COVID-19 vaccine rollout. They forecast ongoing investment in digital channels
to deliver continued sales growth and other initiatives to drive growth and reduce cost.
So some really exciting times for the stock as we head into the second half of the year,
where if 2019 sales growth at over $500m is anything to go by,
then there’s a lot more to be offered by this stock.
So if you want to invest in it, you want to strike in at a price which you like and that
works for you. So I’ll start by cost averaging in with a stop loss ideally in the range of 5 – 10%.
The share price is already on a steady upward momentum so my strike price would be between $3.6
to $4 per share. So if there’s any further pull back towards $4 per share
that would be a good entry point for this stock. And when you see how far down this value stock
has fallen since precovid it gives an indication of their potential should they sustain the month
on month growth and cost savings. So my view is they could easily 3X over the next 12 – 18months
once the economies fully re-open But please do your own research.
Next up is Toughbuilt Industries Inc (TBLT), Toughbuilt has a share price of 70cents
and a market capitalization of $58.9mn. Its share price is down by 10.6% in the last month
and also down by over 36% over the last 12months, making this stock look like deep value...
ToughBuilt is an advanced product design,
manufacturer and distributor with emphasis on innovative products, focused on tools
and other accessories for the professional and do-it-yourself construction industries.
They market and distribute various home improvement and construction product lines
under the TOUGHBUILT brand name, within the global multibillion dollar per year tool market industry.
And Since launching product sales in 2013, they have experienced significant annual sales growth
and their mission is to provide products that are innovative,
of superior quality for their end users while enhancing performance.
Toughbuilt recently reported their financial results for Q1, 2021 and stated that revenues
increased by 214% to $12.3 million, compared to $3.9 million in Q1,2020.
Their Gross profit also increased by 128% to $3.5 million, compared to $1.5 million in Q1,2020.
For 2020, their full year revenues increased by 106% to $39.4 million, as compared to $19
million in 2019. Gross Profit also increased by 162% to $14.7 million. They have also grown their
global presence serving the United States, Canada, United Kingdom, Europe, Australia, New Zealand,
and South Korea. So some solid top line growth and profit margins backed by international expansion.
They recently announced that they had grown their business
from 4 SKU’s to 25 SKU’s with Toolstation, a leading Netherland based retailer. And
the 25 SKUs ranges have been slotted for immediate placement in all stores,
catalogs and on toolstations website in the Netherlands and Belgium regions.
Toughbuilt also announced that the gross sales through their Amazon storefronts for the FY,
2020, was approximately $7.04 million about 20% of total revenue, which is significant.
And their Amazon storefront results are indicative of the progress made
with their product lines and their commitment and investments to becoming a global company.
Furthermore, they look forward to growing sales on Amazon USA
and Amazon platforms internationally as they launch more lines this coming year and beyond.
So some really exciting times ahead for this penny stock and one good thing about this stock is that
it has been showing consistent and good top line growth year on year since 2016. It is still very
much loss making over the last 5 years but what we can see is that the deficit seems to be reducing
as they have been funding global expansion at the expense of shareholder profits.
So all really good characteristics of a long term high growth play and so exciting times ahead.
So if you want to invest in this stock, you want to strike in at a price that works for you..
The share price has been quite volatile recently and I don’t think it has bottomed out yet.
So my strike price on this one is going to be between 60 – 65cents per share. So if there’s any
further pull back towards 65cents per share that would be a good entry point to load up for the
long term given their strong outlook. And When you look at where this stock has come from precovid,
you can begin to see how much potential this stock could have with a one time peak of $30 per share.
My bet is that given the current growth and outlook, the stock could hit its precovid
highs of $5.40 over the next 12 – 18months once economies are fully re-opened giving it an upside
potential of up to 714%. And this is assuming they continue to execute their existing strategy
growing the top line sustainably and reducing the bottom line losses over the next 12 – 18months
but please do your own research.
You need to be aware that despite the positive outlook with these stocks,
investing in them is still risky and volatile given the current market conditions, so just make
sure you are planning for any trade accordingly and it falls within your risk tolerance..
This video is not a buy or sell recommendation but is meant to bring some new and exciting stocks to
your attention for you to do your own research.. As always I would love to hear from you,
so let me know your thoughts on these stocks in
the comments section and what disruptive stocks are catching your eyes lately.
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inflation environments . So please make sure you hit the bell to be notified.
Thank you so much for being here and I look forward to have you in my next video. Thank you