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. Otto Energy
2. Resource Mining Corporation
3. Raptis Group
4. Locksley Resources
5. GreenHy2
6. Forrestania Resources
7. Saferoads Holdings Ltd
8. Trigg Mining
9. Eden Innovations
10. Trek Metals

Otto Energy (ASX: OEL)

Otto Energy is an oil and gas exploration company with a focus on the Gulf of Mexico.

The company recently announced a special dividend distribution, payable on June 16, 2025, reflecting its strong operational performance and commitment to returning value to shareholders. Additionally, Otto Energy reported a 6% increase in quarterly production and a 4% rise in revenue, highlighting its robust financial health.

The company has also reaffirmed its long-term strategy of balancing shareholder returns with disciplined capital investment across its portfolio. As energy prices remain firm, Otto’s low-cost production model provides a margin buffer that may continue to support earnings momentum.

At the time of writing, Otto Energy's share price return over the last three months is 1,070%.

Resource Mining Corporation (ASX: RMI)

Resource Mining Corporation is engaged in the exploration of copper and gold projects, with recent acquisitions in Tanzania's Mpanda and Mbozi regions.

The company successfully raised $2 million to accelerate exploration activities at its Mpanda Copper-Gold Project, aiming to capitalise on the growing demand for critical minerals.

Management has flagged the potential for shallow, near-surface mineralisation to deliver small-scale production options in the near term, providing early cash flow to fund broader development. The focus on battery metals and electrification-aligned resources positions RMI favourably in a thematically strong sector.

At the time of writing, Resource Mining Corporation's share price return over the last three months is 460%.

Raptis Group (ASX: RPG)

Raptis Group is a property development company based on the Gold Coast.

The company recently resolved a significant discrepancy involving 90 million shares between its register and ASX records, enabling the lifting of its voluntary trading suspension. Raptis is now seeking to raise approximately $1.75 million through a fully underwritten placement and entitlement offer to purchase the management rights of the Sterling Broadbeach residential tower.

With the Gold Coast experiencing strong population growth and housing demand, Raptis is positioning itself to capture value in a buoyant property market. Its pipeline includes several high-rise residential projects, supported by renewed investor confidence following its trading reinstatement.

At the time of writing, Raptis Group's share price return over the last three months is 388.6%.

Locksley Resources (ASX: LKY)

Locksley Resources is focused on the exploration of critical minerals, particularly at its Mojave Project in California.

The company recently secured a heavily oversubscribed $1.47 million capital raise to accelerate drilling activities targeting high-grade rare earth elements and antimony.

Notably, Locksley reported assay results with antimony levels up to 46% and significant silver findings, underscoring the project's potential.

The project’s strategic US location, coupled with growing demand for non-Chinese sources of rare earths and antimony, adds geopolitical relevance to the investment case. Locksley’s next steps include defining resources and obtaining environmental permits, both of which are currently underway.

At the time of writing, Locksley Resources' share price return over the last three months is 370.6%.

GreenHy2 (ASX: H2G)

GreenHy2 is a renewable energy company specialising in hydrogen storage solutions.

The company recently signed a contract with European technology supplier H2Core to provide advanced storage solution technologies, including supercapacitor batteries and low-pressure hydrogen storage.

The company is also developing a pilot-scale production facility in Australia, aimed at demonstrating the scalability of its storage solutions. This move is seen as a key milestone for commercialisation and potential government-backed funding in the clean energy sector.

At the time of writing, GreenHy2's share price return over the last three months is 366.7%.

Forrestania Resources (ASX: FRS)

Forrestania Resources is engaged in the exploration of lithium, gold, and nickel in Western Australia.

The company recently confirmed the discovery of lithium-bearing mineral spodumene at its South Iron Cap East prospect, indicating the potential for significant lithium resources.

Forrestania also holds ground adjacent to known lithium deposits held by major players, making it a speculative takeover candidate if exploration success continues. With demand for lithium forecast to grow, Forrestania offers leveraged exposure to an essential energy transition metal.

At the time of writing, Forrestania Resources' share price return over the last three months is 315.8%.

Saferoads Holdings Ltd (ASX: SRH)

Saferoads Holdings provides road safety solutions across Australia.

The company recently completed the settlement of its Road Safety Rentals (RSR) asset sale contract, resulting in a special dividend of 10 cents per share. Despite these positive developments, the company's share price has declined, presenting a potential opportunity for value investors.

The company continues to streamline its core manufacturing and product innovation arm, which includes temporary and permanent road barriers, smart lighting, and signage. With Australia investing in regional and urban infrastructure, Saferoads could benefit from project-linked procurement.

At the time of writing, Saferoads Holdings Ltd's share price return over the last three months is 268%.

Trigg Mining (ASX: TMG)

Trigg Mining focuses on the exploration of high-grade antimony and gold projects.

The company has recently advanced its critical minerals strategy with a major U.S. acquisition, enhancing its portfolio and market positioning. Additionally, Trigg reported high-grade mineralised zones confirming the continuity of antimony at its Antimony Canyon Project.

As antimony is listed as a critical mineral by multiple governments due to its role in battery and defence technologies, Trigg’s project portfolio may attract attention from strategic investors or offtake partners. The company has flagged further drilling and metallurgical testing in the coming months.

At the time of writing, Trigg Mining's share price return over the last three months is 200%.

Eden Innovations (ASX: EDE)

Eden Innovations specialises in developing and marketing innovative products based on its proprietary EdenCrete technology, which enhances the performance of concrete.

The company's products have applications in infrastructure and construction, offering improved durability and sustainability.

The company has recently announced pilot programs with local councils in Australia and is exploring potential interest from U.S. infrastructure contractors. As governments invest in climate-resilient construction materials, Eden’s tech-forward product may find increasing market uptake.

At the time of writing, Eden Innovations' share price return over the last three months is 200%.

Trek Metals (ASX: TKM)

Trek Metals is engaged in the exploration of base and precious metals, with a focus on projects in Western Australia.

The company's portfolio includes the Hendeka Project, which has shown promising results in recent drilling campaigns.

The company has also been expanding into lithium exploration, with early-stage activity underway in prospective zones. As a diversified explorer, Trek offers multiple catalysts for traders looking to capitalise on thematic interest in battery metals and gold.

At the time of writing, Trek Metals' share price return over the last three months is 200%.

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