2 Low Debt/ Debt Free Fundamentally Strong Penny Stocks That Can Be Bought On Declines

Penny stocks need to be dealt with meticulously and while these are growth oriented stocks that are on course of making their journey and can be multibaggers based on industry they are in and company specific fundamentals. Likewise, there are 2 stocks which can be bagged in for good gains in reasonable time in the short to medium term.

Here are the 2 fundamentally strong penny stocks that one can add in case of decline in their stock price for best take:

1. International Conveyors:

International Conveyors Limited is engaged in the manufacture and marketing of solid woven fabric reinforced polyvinyl chloride (PVC) impregnated and PVC covered fire retardant, anti-static conveyor belting. The company is a small cap concern with m-cap of Rs. 399 crores.

The company is attractively valued with PE of 25.08 as against sector's PE of 173.96. Net profit for the company has declined both YoY and quarterly but if we look at previous fiscal years it has turned from a loss making entity to a profit making company. Over the last 5 years, revenue has grown at a yearly rate of 14.66%, vs industry avg of 3.23%. Coming to its free cash flow, the company has been maintaining a healthy free cash flow of Rs. 47.25 crore as in Fy21.

The company's all time low and high price are Rs. 7.78 and Rs. 858.4, while its last traded price is at Rs. 59.2.

Another positive for the company is that it is even held by foreign institutions with their stake as much as 4.63% as at March 2022. Also on its books, the company has manageable debt.

The company's peers are AIA Engineering, Cummins, Thermax.

 

2. Rubfila International:

The company from the rubber space is into manufacturing heat resistant latex rubber thread. Its products include colored rubber threads, furniture grade rubber thread, rubber threads for medical applications, rubber thread for food/meat packing etc.

The company's PE is again attractive in comparison to the sector's PE. Also, the company is a dividend paying company. The another facet attractive about the company is that it is a debt free entity.
Its Return on Equity is above the usual benchmark of 15% at over 18%.

Also, the company in March this year announced the commencement of commercial production of a new production line at its unit at Madathukulam, Palani Taluk, Dindigul District, Tamilnadu.

 

Disclaimer:

So, considering the financials and positive fundamentals, one can consider buying into these stocks, but you need to be highly cautious of your risk profile and while this is an analysis, a thorough study of the stocks should be engaged into before resorting to including them in your portfolio.

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