Top 5 ASX penny stocks to watch in 2025

What are penny stocks?

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.

Penny stock share trading requires a high degree of due diligence, as they represent smaller propositions that usually come with a far higher risk-to-reward ratio. Ensure you have adequate risk management in place before you consider trading penny stocks.

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

What to know about ASX penny stocks: the good and the bad

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 might not always be enough buyer demand when share traders 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 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 share traders, penny stocks should only form a small percentage of their 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, one of the largest stocks 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.

Top 5 ASX penny stocks to watch in 2025

We selected these penny stocks based on three main factors:

• Share price: As of the time of writing this article, all the shares on our list have a stock price of under A$1
• Diversification: We cover a range of industries, including communications, defence technology, construction, health supplements and software solutions
• Three-month share price jumps: The share price increases of these companies range from 18.92% to 144.44% since 15 May 2025

Overview of the penny stocks in this article

All the penny stocks on our list are available to share trade directly by buying them on our share trading platform, whereas the following ones can be traded via CFDs:

• Alfabs Australia Limited
• Clover Corporation Limited
• Reckon Limited

1. HighCom Limited (ASX: HCL)
 

Industry: Defence technology and communications

Market cap: A$49.29 million¹

Share price (15 August 2025): A$0.445

HighCom operates locally and internationally, with three primary business segments:

• Communications: Provides contact centre solutions and network infrastructure to enterprise clients
• Systems integration: Delivers complex technology projects, such as security systems, building automation and audio-visual solutions to commercial and government sectors
• Professional services: Offers consulting, project management and ongoing technical support across their tech portfolio

The company is undergoing a significant restructuring phase, focused on returning to profitability and positioning for future growth. HighCom is streamlining operations, optimising its service delivery models and concentrating on higher-margin business segments. It’s particularly emphasising its cloud-based solutions and recurring revenue streams.

Highlights:

• Recently received an order from the Australian Department of Defence to the tune of A$2.6 million for its Counter Small Unscrewed Aerial System. This signifies an expansion of solutions for the company²
• Its latest half-year report indicates the company’s principal activities consisted of HighCom Armor (focused on personal protection ballistic products) and HighCom Technology (unscrewed systems, control systems and sensors for defence)³
• The company’s share price, as of 15 August 2025, has soared 144.44% over the past three months

2. Austco Healthcare Limited (ASX: AHC)
 

Industry: Healthcare communications

Market cap: A$129.75 million⁴

Share price (15 August 2025): A$0.37

Austco Healthcare specialises in healthcare communication and workflow management solutions designed to improve patient care and operational efficiency. Its core product portfolio includes the Tacera platform, an integrated nurse call and communication system that connects patients, nurses and healthcare staff through clever alert management technology.

The company also provides staff duress systems (giving people the ability to call for emergency help discreetly), patient entertainment solutions and mobile communication platforms.

Additionally, Austco offers comprehensive maintenance services, system upgrades and 24/7 technical support to ensure the continuous operation of critical healthcare comms.

Highlights:

• The company is pursuing acquisitions to expand its operations, with the most recent one being the announcement of a New Zealand-based Guild and Spence Technologies (G&S) acquisition – completed in May 2025
• In its latest trading update, the company claims a 37%+ increase in revenue for FY25⁵
• In the same period, EBITDA was up over 54%⁶
• Its share price has jumped 23.33% over the past three months, as of 15 August 2025

3. Alfabs Australia Limited (ASX: AAL)
 

Industry: Construction

Market cap: A$123.23 million⁷

Share price (15 August 2025): A$0.445

Alfabs has built its reputation over several decades, serving the construction, architectural and industrial sectors. Originally focused on standard aluminium products, it’s evolved to become a comprehensive solutions provider for complex architectural and industrial projects.

The company’s product portfolio includes custom aluminium windows, doors, curtain walling systems, structural glazing and specialised industrial fabrications.

It serves multiple markets, including commercial construction, residential developments, infrastructure projects and industrial facilities.

Alfabs combines traditional fabrication techniques with modern CAD design capabilities and precision manufacturing equipment.

Highlights:

• Investing in energy-efficient building envelope systems and other advanced manufacturing techniques
• Its latest official update shows that FY26 cash flow is looking strong and positive⁸
• It’s seen 18.92% share price growth over the past three months, as of 15 August 2025

4. Clover Corporation Limited (ASX: CLV)
 

Industry: Health supplements and infant formula ingredients

Market cap: A$93.52 million⁹

Share price (15 August 2025): A$0.545

Clover Corporation was established in 1998 as a specialised health ingredients company, focused on developing and manufacturing omega-3 fatty acid products. It’s evolved from a small Australian startup to become a globally recognised producer of high-quality nutritional oils, particularly docosahexaenoic acid (DHA) and arachidonic acid (ARA) for infant formula.

DHA and ARA oils are essential for infant brain and eye development, and Clover supplies these to major infant formula manufacturers globally.

Its products serve critical markets in addition to infant formula, including medical foods, functional foods and dietary supplements, with operations spanning Australia, Europe, Asia and the Americas.

Highlights:

• The company aims to capitalise on growing demand for premium nutritional ingredients, particularly in Asia-Pacific markets
• FY25 net profit after tax (NPAT) is expected to outperform market consensus by around 20%¹⁰
• As of 15 August 2025, a three-month look at the share price shows a 25.58% jump in value

5. Reckon Limited (ASX: RKN)
 

Industry: Software solutions

Market cap: A$70.23 million¹¹

Share price (15 August 2025): A$0.63

Reckon became well-known for bringing QuickBooks to the Australian market through a licensing partnership with Intuit. Over the years, it’s evolved from a single-product company to a diversified business and legal software provider, expanding through acquisitions and product development to service various professional service markets.

It’s a software-as-a-service (SaaS) provider, specialising in business management solutions for small to medium enterprises and professional services firms. Its product portfolio includes cloud-based accounting software, practice management solutions for legal and accounting firms and document management systems. The company's flagship products are:

• Reckon One for small business accounting
• APS (formerly Advanced Practice Systems) for legal practice management
• Elite for larger legal firms

Highlights:

• Its latest half-year results show A$33 million revenue generated in FY25 thus far¹²
• It’s paying a A$0.025 dividend in September 2025¹³
• The share price has leapt 28.57% over the past three months, as of 15 August 2025

How to trade penny stocks with IG AU

CFDs

1. Open a CFD trading account with IG AU
2. Search for ASX penny stocks on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Share trading

1. Open a share trading account with IG AU
2. Search for ASX penny stocks
3. Choose the shares you want to buy
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about penny stocks 

Footnotes
 

1. TradingView, August 2025
2. HighCom, May 2025
3. HighCom half-year report, February 2025
4. TradingView, August 2025
5. Austco trading guidance, June 2025
6. Austco trading guidance, June 2025
7. TradingView, August 2025
8. Alfabs Australia update, April 2025
9. TradingView, August 2025
10. Clover Corporation, June 2025
11. TradingView, August 2025
12. Reckon half-year results, August 2025
13. Reckon half-year results, August 2025