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Finding the right penny stock can turbocharge returns. Just look at Defence Holdings, a small-cap that’s developing AI-enabled software defence systems. It’s up 4,380% in one year!

In reality though, successful penny stocks are rare beasts, and this type of eye-popping return is rarer still. But for investors with a high risk tolerance, it may be worth digging into businesses operating in growth markets with untapped future potential.

Agronomics (LSE:ANIC) certainly falls into this category. It’s a venture capital company focused on the nascent fields of cellular agriculture and precision fermentation.

This area is often called ‘clean food’ or ‘cultivated meat’, as it involves growing animal products directly from cells instead of raising whole animals.

So far, Agronomics has invested in more than 20 start-ups. These include SuperMeat (cultivated chicken), BlueNalu (cultivated seafood), Meatable (cultivated pork and beef), and VitroLabs (cultivated leather).

Of course, these names will be obscure to most investors, as they’re still largely early-stage. However, some are starting to commercialise their products and services.

Last month, for example, portfolio holding Clean Food Group received regulatory approval for its CLEAN Oil 25 to be used as a cosmetic ingredient in the UK, US, and Europe. Clean Foods manufactures sustainable oils and fats through fermentation.

Developed in collaboration with THG LABS and Croda International, this breakthrough product is a sustainable alternative to conventional oil ingredients in the skincare, haircare, and wider personal care categories (all massive markets).

Palm oil is used in around 70% of cosmetic products, and it remains one of the leading drivers of tropical deforestation. For decades, the beauty industry has faced a difficult challenge, aware of the damage caused by palm oil, but unable to replace it due to its unique properties. Today, that changes with this new regulatory approval.

Significant commercial progress like this should start to drive portfolio returns. To date, Agronomics has invested a total of £1.6m into Clean Food Group. Subject to audit, the firm says this is currently carried at £6.9m, representing a significant uplift.

The position represents around 4.8% of Agronomics’ last stated net asset value (NAV), as calculated in June. That was 14.4p per share, which suggests the shares at just under 7p are trading at more than a 50% discount to NAV.

It goes without saying that this stock is very much in the high-risk, high-reward camp. There’s no guarantee these start-ups will ever find commercial success, while a consumer backlash against lab-grown food could torpedo investor sentiment (and funding) for the sector.

Also, while NAV gives a rough idea of value, calculating it is hardly an exact science. Agronomics’ holdings are all private, so their valuations only get updated periodically.

Nevertheless, this steep discount to NAV likely underpins the stock’s far higher broker price targets. The two analysts covering Agronomics currently have a median 12-month target of 14.9p.

That’s a whopping 113% above the current share price!

According to Agronomics, precision fermentation, biomass fermentation, and cultivated meat technologies represent a $200bn+ market opportunity by 2040.

Agronomics gives investors rare exposure to the ground floor of a potentially transformative industry. For those with a stomach for high risk and volatility, I think this 7p penny stock is well worth checking out.

The post Meet the 7p penny stock that two brokers think could soar 113% appeared first on The Motley Fool UK.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Croda International Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2025

Like Warren Buffett, I love buying top stocks when they’re trading cheaply. So I’ve used recent weakness in the Coca-Cola HBC (LSE:CCH) share price to boost my holdings in the FTSE 100 stock.

At £33.40 per share, the Coca-Cola bottler remains roughly 20% more expensive than it was at the start of 2025. But it’s dropped sharply from its record peaks above £41.02 hit back in May.

This was a bargain opportunity I thought was too good to pass up, and bought more at £32.87 per share. Here’s why.

Major consumer goods companies often command higher valuations than the broader market. Investors are drawn to their predictable earnings and robust cash flows, making them reliable selections over the long term.

In Coca-Cola HBC’s case, stock pickers have been willing to pay a premium for the exceptional brand power of drinks like Coke, Fanta, Sprite, and Monster Energy. The soft drinks market is largely immune to changes in the economic cycle. With globally-recognised labels like these, the FTSE company enjoys even greater demand resilience.

Furthermore, this unrivalled brand strength allows the drinks bottler to raise prices without losing much (if any) market share. This is a powerful weapon in offsetting rising cost pressures and growing profits over time.

Latest financials in August underlined these defensive qualities in action. Despite some tough conditions, organic revenues rose across all regions in the first half, improving 2.6% at group level. Its operating profit margin increased 50 basis points to 11.5%, while operating profit leapt 13.9% year on year.

It’s not just Coca-Cola HBC’s sturdiness that’s a major attraction, though. Thanks to its substantial footprint in fast-growing regions — including parts of Africa and Central and Eastern Europe — the business also has significant growth potential that investors are happy to pay for.

This is another advantage recently displayed in those half-year results. The firm’s organic revenues in emerging and developing markets rose 6.2% and 17.4% in the period. These regions now make up more than two-thirds of group revenues combined.

So given this resilience, why have the shares dropped so sharply? One reason could be that the ‘discount rate’ used to value future earnings rises when interest rates stay high. With hopes of sustained rate cuts fading, stable growth stocks like this are coming under pressure.

It’s possible that fears of how weight-loss jabs like Ozempic will impact demand have hit the shares. While a threat, my view is that the company’s large (and increasing) stable of low-sugar drinks and presence in regions where jab usage is low substantially reduces this danger.

Coca-Cola HBC’s share-price drop now leaves it trading on a forward price-to-earnings (P/E) ratio of 14.5 times. That some way below the five-year average of 18.7 times, and represented a compelling entry point for me to increase my holdings in the drinks bottler.

I’m convinced the FTSE 100 stock will rebound to reach new highs. If City analysts are correct, this could happen sooner rather than later. The average 12-month share price forecast among 17 analysts is £41.78. That’s up more than 25% from today’s levels.

The post At £32.87, I couldn’t resist this dirt-cheap FTSE 100 growth stock! appeared first on The Motley Fool UK.

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Royston Wild has positions in Coca-Cola Hbc Ag. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2025