As of Q1 2025, some stocks delivered eye-catching returns, especially for investors who took a chance on penny stocks.
Over 16 of these low-priced names recorded double-digit gains, with some more than doubling in just three months.
A N1 million invested at the beginning of the year in some cases yielded over N1 million return.
However, it is important to note that as well, some investors lost as much as N300,000 for every N1 million investment.
Penny stocks: big dreams at a small price
In context, a penny stock is typically defined as a stock that trades at a low price, usually under N5 per share.
Notable stocks include AIICO, SCOA, UPDC, Neimeth, Tantalizer, Jaizz Bank, C & I Leasing, Champion Breweries, Cutiz, Mutual Benefit Assurance Plc, etc.
A N100,000 investment in a penny stock trading at N2.00 per share buys 50,000 units, a number that instantly gives retail investors a psychological sense of ownership and influence. Contrast that with blue-chip names like Seplat, Airtel Africa, or Geregu Power, where the same N100,000 can barely secure between 18 and 100 units.
Moreover, many of these stocks operate in sectors undergoing transformation insurance, pharmaceuticals, leasing, or food services. They present opportunities for early entry into turnaround stories or undervalued plays long before institutional money pays attention.
For many retail players, especially those new to the market or trading with limited capital, the math is persuasive.
But penny stocks come with peculiar risks
Unlike bigger, more stable stocks, they often lack analyst coverage and have low daily trading activity. Dividends are rare, making them unattractive for investors looking for steady income.
- Another red flag is low free float, meaning only a small portion of shares are available for public trading. This can lead to sharp price spikes on little volume, or sudden drops when sellers outnumber buyers. It creates volatility that is not always tied to a company’s real value.
- That said, penny stocks can deliver solid returns for investors who are patient, informed, and disciplined, but they’re not for everyone. The key is to diversify, do thorough research, and only invest what you can afford to lose.
Still, the numbers speak volumes. Here’s how a N1 million investment performed in just three months across selected Nigerian penny stocks:
SCOA Nigeria Plc
SCOA was one of the top gainers in Q1 2025, rising by 116.99% as the share price moved from N2.06 to N4.47. If you had invested N1 million in January, it would be worth about N2.2 million by March.
- The company, valued at N2.9 billion, runs a mix of businesses from selling cars to power equipment, furniture, food, and farming. In 2024, it made N13 billion in revenue and N374 million in pre-tax profit. Still, no dividend was paid, likely because the profit was modest.
- Trading activity is low. Only 14.3 million shares were traded in Q1, and with just 20.5% (although it meets the NGX free float requirement) of its shares available to the public, the price can move up or down quickly, even with small trades.
Key point for investors: The share price has not moved much since the company released its results. That could mean most of the good news is already reflected in the price.
SMURFIT
Smart Product Nigerian Plc began the year with a share price N0.20 and since then has shown relative volatility closing at N0.39 in Q1. This means its investors that took a position with N1 million would have seen the holding gaining N950,000.
Since then, the share price has gained an additional 16% to N0.42 as of the closing of trading mid-April. The stock has traded a total volume of 2 million shares valued at N566,765 over the period.
Looking at the company’s financials, it appears the rally is driven by factors other than financial performance. The company’s 2023 financial statements show that post-tax increased to N6.6 million from N6 million in 2022 and paid dividend of 8 kobo.
UPDC
A N1 million investment in UPDC at the start of 2025 would now be worth around N1.87 million roughly 628,931 shares in Q1 reflecting an 87% gain in just over three months. Since then, the stock has added another 11.59%.
- The rally appears to be backed by solid numbers. In 2024, the real estate firm posted a 378% jump in pre-tax profit to N1.82 billion, up from N380 million the previous year.
- UPDC, a former UAC unit spun off in 1997, builds and manages high-end residential and commercial properties across key Nigerian cities. It also owns stakes in UPDC Hotels and Manor Gardens.
But the stock comes with a caveat: liquidity risk. Only 4.89% of its 18.56 billion outstanding shares are available for public trading, well below NGX’s Main Board free float requirement. That makes the stock highly sensitive to buying and selling pressure.
Still, interest is picking up. From January to mid-April, UPDC saw 335 million shares change hands in over 6,000 deals, ranking it the 25th most traded stock on the NGX.
Apart from SCOA SMURFIT and UPDC, a N1 million investment in other penny stocks such would have given investors return above N400,000 in capital gains above the inflation rate; and a positive real return.
- Mutual Benefit Assurance Plc – +N721,311
- The Initiatives – +N680,000
- Trans-Nationwide Express – +N449,275
- Tantalizer – + N414,634
Despite their reputation for risk, penny stocks have clearly shown they can deliver outsized returns, especially for retail investors priced out of blue-chip names or wary of macro headwinds.
For the informed and nimble investor, Q1 2025 proved that a N1 million bet on the right penny stock could generate gains well above inflation, fixed income returns, and even many large-cap equities.
Still, the message is clear: this is a game for those who do their homework, watch the market closely, and accept that the ride might not always be smooth.
For now, penny stocks remain one of the few places where small money can still dream big.
