10 ASX penny stocks for traders to watch

ASX penny stocks: what you need to know

Penny stock investing requires a high degree of due diligence, as they represent smaller propositions that usually come with a far higher risk-to-reward ratio.

In the UK, a penny stock is defined as any share worth less than £1 each. In the US it’s any under US$5 (circa AUD$7).

In Australia, many classify penny stocks as those under one Australian dollar per share, while some use the definition loosely to describe any company with smaller share prices.

It’s also worth noting that penny stocks can have high-value market caps if large numbers of shares have been issued.

ASX penny stocks: further important information

ASX penny stocks are often thinly traded. This means that, unlike the blue-chip shares of the ASX 200, where every stock usually has a wall of potential buyers, there may not always be enough buyer demand when investors want to sell.

In addition, penny stocks are often loss-making, using any money available to invest in growth. This makes them highly speculative investments. Moreover, they usually receive little to no analyst coverage, making truly informed trading decisions difficult.

They can also even lack in-depth trading records. And some penny stocks are notorious for diluting stock value by issuing additional shares.

These risk factors mean that for most investors, penny stocks should only form a small percentage of one’s portfolio. And for those closer to retirement who are investing over short timeframes, they arguably should be avoided altogether.

Of course, despite these significant risks, ASX penny stocks hold a unique advantage. The right pick can be massively more lucrative than an investment in more established peers.

However, it’s important to be aware of the echo chamber of success. Skyrocketing penny stocks are extremely likely to hit mainstream news, but the success stories are significantly outnumbered by the failures. Moreover, once an ASX penny stock hits the headlines, it's often too late to partake in its success.

But many of the largest blue-chip stocks on the ASX began trading as penny stocks. For example, the largest stock on the ASX, BHP, used to be a penny stock back in 1999. Afterpay was a penny stock as recently as 2017. International market titans Apple and Amazon also once qualified as penny stocks for investors with the foresight and luck to invest early.

What are the best ASX penny stocks to watch?

The following ASX penny stocks have been selected due to their substantial share price returns over the past three months. While they may not necessarily represent the best long-term growth investments, they have garnered significant investor interest.

1. Petratherm
2. Osmond Resources
3. Ovanti
4. James Bay Minerals
5. Noviqtech
6. Trigg Mining
7. Metal Hawk
8. SportsHero
9. Mithril Resources
10. Odessa Minerals

Petratherm Ltd (ASX: PTR)

Petratherm Ltd is a dynamic exploration company targeting Australia’s untapped rare earth element (REE) potential, primarily in South Australia. With a strategic focus on projects like Comet and Woomera, Petratherm aims to unlock critical minerals essential for advanced technologies, including renewable energy systems, electric vehicles, and defence applications. Its success stems from a robust exploration strategy, which has yielded promising early results, placing the company on a path to potentially significant resource development.

For investors, Petratherm presents a high-reward prospect in the booming critical minerals market. With REEs becoming increasingly vital to global supply chains and demand outpacing supply, companies like Petratherm are well-placed to capitalise on this opportunity. Its efficient management and focus on high-demand elements make it an exciting stock for those looking to leverage the growth in clean energy and technological innovation.

At the time of writing, Petratherm’s share price return over the last three months is 900%.

Osmond Resources (ASX: OSM)

Osmond Resources is an Australian exploration company focused on uncovering valuable deposits of gold, nickel, copper, platinum group metals, and rare earth elements. Operating across strategic locations such as South Australia’s western Eyre Peninsula and western Victoria, its diverse portfolio includes promising projects like Fowler, Yumbarra, and Sandford. Since its establishment in 2021, Osmond Resources has actively targeted critical and high-demand minerals, aligning with global trends in renewable energy and technological advancements.

The company’s strategic focus on minerals essential to clean energy solutions and modern technology positions it as an intriguing prospect for investors. With an increasing need for rare earth elements and precious metals in global markets, Osmond’s projects hold the potential for substantial value. Its aggressive exploration strategy and foothold in underexplored, resource-rich areas make it a compelling choice for those seeking exposure to Australia’s thriving mining sector.

At the time of writing, Osmond Resources’ share price return over the last three months is 498.6%.

Ovanti Ltd (ASX: OVT)

Ovanti Ltd is a fintech company providing innovative digital commerce and authentication solutions across Australia and Southeast Asia, including Malaysia, Singapore, and Indonesia. Its suite of products, such as Mobility2U and Bulk API, offers businesses tools for secure transaction processing and efficient customer communication. These solutions are designed to streamline operations and enhance the user experience, making them appealing in the ever-evolving digital landscape.

The company has shown promise through strategic moves, including a focus on expanding into the US market. Ovanti’s recent appointments, such as a new Chief Revenue Officer, highlight its commitment to growth and scalability. With its position in a high-growth sector and ongoing developments, Ovanti has captured the attention of investors seeking exposure to the booming technology and fintech markets.

At the time of writing, Ovanti’s share price return over the last three months is 475%.

James Bay Minerals (ASX: JBY)

James Bay Minerals is a dynamic player in the exploration and development of lithium resources, focusing its operations in the highly prospective James Bay region of Quebec, Canada. The company’s key projects, La Grande and Troilus, are strategically positioned in a region recognised for its rich lithium deposits, a critical material for the global energy transition. This positioning, combined with robust project management and exploration expertise, has bolstered its growth potential, as reflected in the company’s impressive share performance since listing.

As the demand for battery metals intensifies, driven by electric vehicles and renewable energy storage, James Bay Minerals stands out as a stock to watch. Its focused approach to high-grade lithium exploration in a geopolitically stable region aligns well with investor interest in sustainable and high-demand commodities. For traders, the company offers a compelling mix of growth potential and sector relevance, making it an attractive prospect on the ASX.

At the time of writing, James Bay Minerals’ share price return over the last three months is 458.3%.

NoviqTech Ltd (ASX: NVQ)

NoviqTech Ltd is a forward-thinking Australian company specialising in cutting-edge software solutions for carbon reporting and green energy certification. Its flagship platform, Carbon Central, empowers businesses to track carbon footprints, validate offsets, and produce guarantee-of-origin certificates for sustainable resources. Additionally, NoviqAI leverages artificial intelligence and blockchain technology to streamline supply chain transparency and authenticity verification, enhancing trust and efficiency for global businesses.

Positioned at the intersection of technology and sustainability, NoviqTech taps into the growing demand for eco-friendly solutions amidst stricter climate regulations. With its operations spanning Australia and Europe, the company is poised for growth in markets prioritising green innovation. For investors, its focus on the high-potential sectors of AI and clean technology presents an exciting opportunity for long-term value creation as global economies transition to sustainability-driven paradigms.

At the time of writing, Noviqtech share price return over the last three months is 400%.

Trigg Minerals (ASX: TMG)

Trigg Minerals is carving out a niche in the critical minerals space, focusing on antimony, an element essential for renewable energy, defence, and high-tech industries. Its flagship project, the Achilles Antimony Project in New South Wales, boasts Australia’s highest-grade undeveloped antimony resource, complemented by the Taylors Arm and Spartan projects, which show promising high-grade mineralisation. Trigg is also advancing gold exploration in Queensland’s Drummond Basin, further diversifying its portfolio.

As global demand for antimony surges, driven by its critical applications and limited supply chains, Trigg is well-positioned to capitalise on this opportunity. The company’s strategic approach to developing high-grade assets aligns with emerging market trends, making it a compelling choice for investors seeking exposure to essential minerals with transformative potential.

At the time of writing, Trigg Mining’s share price return over the last three months is 275%.

Metal Hawk Ltd (ASX: MHK)

Metal Hawk Ltd is a mineral exploration company focusing on early-stage discoveries of gold and nickel within Western Australia’s prolific Eastern Goldfields region. Their flagship Leinster South Project, featuring the promising Siberian Tiger prospect, has delivered high-grade gold assay results of up to 20.2 grams per tonne, highlighting the potential for significant resource discoveries. The company leverages innovative exploration techniques, such as UAV magnetic surveys, alongside traditional geological methods to refine its drilling strategies and maximise the potential of its tenements.

Metal Hawk stands out due to its technically skilled team with a proven record in resource discovery and its ability to secure funding for ambitious exploration goals. Recently raising $2.5 million to advance its exploration efforts, the company has demonstrated resilience and a forward-thinking approach in a competitive sector. With high-grade prospects and ongoing drilling campaigns, Metal Hawk is well-positioned to catch the eye of traders seeking exposure to the dynamic and lucrative resources market.

At the time of writing, Metal Hawk’s share price return over the last three months is 240.7%.

SportsHero (ASX: SHO)

SportsHero stands out as a niche player in the digital sports arena, offering an engaging gamified social prediction platform for sports enthusiasts. This innovative app allows users to predict game outcomes, interact with other fans, and compete in real-time across major sports. With features such as leaderboards, in-app rewards, and brand-sponsored competitions, SportsHero transforms sports fandom into a dynamic, interactive experience. By connecting global sports fans, the platform enhances viewer engagement and creates monetisation opportunities through brand partnerships and virtual currency. For traders, SportsHero represents an intriguing speculative opportunity driven by its ambition to dominate the growing sector of sports gamification and social interaction.

At the time of writing, SportsHero’s share price return over the last three months is 233.3%.

Mithril Silver & Gold Ltd (ASX: MTH)

Mithril Silver & Gold Ltd is a dynamic exploration company focused on unlocking the potential of precious metals deposits in Mexico and Australia. The company’s flagship project, the Copalquin Gold-Silver District in Durango, Mexico, lies within the prolific Sierra Madre Gold-Silver Trend. This historic mining district, rich in high-grade resources, is a cornerstone of Mithril’s strategy, which combines modern exploration techniques with a proven track record of discovery.

Under the leadership of experienced mining professionals, Mithril has carved a niche for itself in the competitive junior exploration space. Its strategic focus on acquiring and developing high-potential projects ensures robust prospects for growth. With ongoing drilling campaigns and rising demand for gold and silver, the company presents a compelling opportunity for investors seeking exposure to the precious metals sector and the exploration upside it offers.

At the time of writing, Mithril Silver & Gold Ltd’s share price return over the last three months is 220.8%.

Odessa Minerals (ASX: ODE)

Odessa Minerals stands out as a dynamic player in the exploration of rare earth elements (REE), lithium, and diamonds within Western Australia. With a portfolio spanning over 3,000 km², including high-potential projects in the Gascoyne and Kimberley regions, Odessa is positioned to capitalise on growing global demand for critical minerals. Key projects, such as Lockier Range and Lyndon, boast promising results, including REE grades as high as 14% and significant lithium anomalies, supported by advanced geophysical studies. These attributes place Odessa at the forefront of Australia’s resource exploration scene.

The company’s strategic focus on high-value minerals essential for technology and renewable energy, coupled with a seasoned leadership team, makes it an enticing option for investors. As rare earth and lithium markets gain momentum globally, Odessa’s substantial tenement holdings and innovative exploration methodologies provide a strong growth narrative. For those eyeing the ASX for emerging opportunities, Odessa Minerals presents a compelling case as a stock to watch.

At the time of writing, Odessa Minerals’ share price return over the last three months is 220%.

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