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The best penny stocks on the ASX in 2023 (updated monthly)

Our proprietary algorithm picked 10 penny stocks that are worth watching in the year ahead.

Important note

Unfortunately there's no one magic stock or ETF that's 'best' for everyone. Instead, you should look at your own individual needs and investment strategy to decide what stock is right for you. Further, nobody can say for certain which direction a share will go as past performance is no guarantee of future results. So keep in mind these are stock ideas only and should not be taken as personal financial advice.

It has been a turbulent time for markets, with many of the pressures from 2022 remaining in 2023. Today's share market is still dominated by rising interest rates, stubbornly high inflation and the possibility of a recession. In this current market there has been nowhere to hide with commodities, bonds and shares all falling in recent times.

But as Warren Buffett famously said, "Be fearful when others are greedy and greedy when others are fearful." With markets focusing on the profitable big end of town, this could be an opportunity to snap up some penny stocks at a bargain price.

As such, Finder has come up with a few penny stocks that are worth adding to your watchlist in 2023.

Our best penny stocks methodology

To help you identify the latest penny stocks, we used Finder's proprietary algorithm to find ASX-listed companies that have strong fundamentals based on price performance, profit, revenue and dividends.

We also used filters to exclude companies that did not meet the following requirements:

  • Listed on the ASX for 5 years or more
  • A share price of under $1

Important: Our list of highlighted stocks aren't necessarily the best penny stocks for you or your personal situation. Investing in penny stocks is typically highly speculative and can be very risky. We do not guarantee the performance or returns of any investment. You should do your own research and consult an industry professional when in doubt.

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The algorithm was last updated on 1 December 2023.

4DS Memory (4DS.AU)

4DS Memory Limited, a semiconductor company, engages in the research and development of non-volatile memory technology in Australia. The company develops interface switching ReRAM technology for gigabyte storage class memory in mobile and cloud.
  • Market cap: A$152.127 million
  • YTD performance: -24%
  • 1-year performance: 265.39%
  • 5-year performance: 295.84%
  • Headquarters: Australia

DroneShield (DRO.AU)

DroneShield Limited engages in the development, commercialization, and sale of hardware and software technology for drone detection and security in Australia, and the United States. Its products include DroneGun Tactical, a countermeasure against a range of drone models; DroneGun MkIII, a compact, lightweight, and UAS countermeasure solution for one hand operstion; DroneSentry-X, a cross-vehicle compatible, automated 360° detect and defeat device; and DroneSentry that integrates company's suite of sensors and countermeasures in a unified platform deployed in permanent or temporary installations.
  • Market cap: A$192.593 million
  • YTD performance: 80.56%
  • 1-year performance: 80.56%
  • 5-year performance: 273.57%
  • P/E ratio: 90
  • Headquarters: Australia

Botanix Pharmaceuticals (BOT.AU)

Botanix Pharmaceuticals Limited engages in the research and development of dermatology and antimicrobial products in Australia. The company engages in development of novel treatments for common skin diseases and infections.
  • Market cap: A$269.701 million
  • YTD performance: 15.39%
  • 1-year performance: 183.02%
  • 5-year performance: 552.18%
  • Headquarters: Australia

Acrow Formwork and Construction Services (ACF.AU)

Acrow Limited provides smart integrated construction systems across formwork, industrial services, and commercial scaffolding in Australia. It offers falsework and shoring systems; formwork systems; scaffolding systems; specialized construction systems, such as Acrow screens, jacking systems, and universal soldier systems; and hardware and consumables, which includes props, timber and ply, containment, and scaffold accessories.
  • Market cap: A$283.25 million
  • YTD performance: 160%
  • 1-year performance: 66.67%
  • 5-year performance: 622.23%
  • P/E ratio: 10.83
  • Headquarters: Australia

Austco Healthcare Ltd (AHC.AU)

Austco Healthcare Limited, together with its subsidiaries, engages in the manufacture, distribution, marketing, supply, service, and sale of healthcare and electronic communications systems in Australia, New Zealand, Asia, Europe, and North America. It offers Tacera, an IP system, and Medicom cost-effective solution for nurse call system; and Pulse Mobile, a native app for iOS and android devices.
  • Market cap: A$55.99 million
  • YTD performance: 91.92%
  • 1-year performance: 72.73%
  • 5-year performance: 305.12%
  • P/E ratio: 24.36
  • Headquarters: Australia

Civmec (CVL.AU)

Civmec Limited, an investment holding company, provides construction and engineering services to the energy, resources, infrastructure, and marine and defense sectors in Australia. The company undertakes fabrication projects, such as structural steel, plate works, tanks, vessels, materials handling equipment, subsea and offshore structures, and pipe spooling services.
  • Market cap: A$502.53 million
  • YTD performance: 132.56%
  • 1-year performance: 78.58%
  • 5-year performance: 257.15%
  • P/E ratio: 8.87
  • Headquarters: Australia

Clime Capital Ltd (CAM.AU)

Clime Capital Limited is a closed-ended equity mutual fund launched and managed by Clime Asset Management Pty Ltd. The fund invests in public equity markets across the globe.
  • Market cap: A$117.352 million
  • YTD performance: -10.61%
  • 1-year performance: 4.58%
  • 5-year performance: 33.34%
  • P/E ratio: 8.55
  • Headquarters: Australia

Canyon Resources (CAY.AU)

Canyon Resources Limited, together with its subsidiaries, engages in the development and exploration of bauxite properties in West Africa. Its flagship property is the 100% owned Minim Martap Bauxite project located in central Cameroon.
  • Market cap: A$71.104 million
  • YTD performance: -33.33%
  • 1-year performance: 75.01%
  • 5-year performance: 75.01%
  • Headquarters: Australia

Ironbark Capital (IBC.AU)

Ironbark Capital Limited is an closed-ended balanced mutual fund launched and advised by Kaplan Funds Management Pty Ltd. The fund invests in the public equity and fixed income markets of Australia.
  • Market cap: A$49.247 million
  • YTD performance: -8.16%
  • 1-year performance: 1.13%
  • 5-year performance: 36.37%
  • P/E ratio: 9.05
  • Headquarters: Australia

Advanced Braking Technology (ABV.AU)

Advanced Braking Technology Limited engages in the research, design, development, manufacture, distribution, and sale of braking solutions worldwide. The company offers braking solutions for light, heavy, defense, and electric vehicles, as well as autonomous vehicle emergency braking and brake controllers under the ABT Failsafe, ABT Failsafe Emergency, and Terra Dura brand names.
  • Market cap: A$18.215 million
  • YTD performance: 20.52%
  • 1-year performance: 42.43%
  • 5-year performance: 571.43%
  • P/E ratio: 12.31
  • Headquarters: Australia

Should you invest in penny stocks in 2023?

Penny stocks are smaller, less established businesses which are often impacted by volatility. In a period like we have today where markets are punishing unprofitable companies with investors fearing a recession, it might seem like it is a bad time to be buying penny stocks.

And for anyone who hasn't got a stomach for volatility this might be true. Although there are a few caveats to this.

Just because a market is volatile, it doesn't necessarily make it a bad time to invest, especially for those who are buying for the long term. After all, the share price and business performance don't always align over the short term.

So over the long term owning shares that are cheaper, in businesses that are growing can be beneficial to your long-term wealth.

If you're looking at investing during a downturn, just look at the global financial crisis (GFC). While many businesses didn't survive, others thrived, taking advantage of a changing landscape. In the US, companies including Netflix, LEGO and Mailchimp took the opportunity to expand and have since become global leaders.

In Australia, the commodity boom off the back of the GFC helped power many of our penny stocks, especially in the mining and resources sector.

Also it's worth pointing out that not all shares follow the market. In fact many businesses can have differing performance to how the market is going. Again though, this will rely on buying the right business.

Finally some businesses perform stronger in a recessionary period. Service providers, repair services, small luxury items, consumer staples and commodities can be recession resistant.

How penny stocks perform in a bear market

Penny stocks are highly volatile and are often seen as riskier investments. But that doesn't mean all penny stocks fall in a bear market.

Historically, penny stocks have larger swings in both bull and bear markets. This means that when times are good, investors increase their holdings. However, when the market turns and the sentiment is low, these investments fall further than blue chip shares do.

But just like large caps, how the business performs and its share price vary based on its own circumstances and the sector it is in.

If you look at the current market technology, consumer cyclical and metal and mining companies are struggling as the ASX 200 continues its sell-off. On the other hand, consumer staples, health care and industrials are outperforming the market.

The same is true with penny stocks.

I’ll trade in things I believe have a lot of hype… I’ll have a very firm stop loss and a price I take a profit at. And once I take the profit, I take it and move on. I’m done. I’m not re-entering… Or if it hits my stop loss, I sell and take the loss. I’ve taken lots of losses and I’ve taken lots of profits.

Fred Schebesta

Fred Schebesta
Founder, Author

Type of investor suited to penny stocks

Penny stocks are highly speculative investments. The odds of you losing all your money are greater than gaining multi-bagger returns.

As such, these investments usually are tailored towards the following:

  1. Experienced investors
  2. Investors with high risk tolerance
  3. Hedge funds and other professional investors
  4. Those with a long-term horizon who are willing to ride out short-term volatility
  5. Investors who are happy to take a bit of a gamble for potential extra reward


  • Lower share price
  • Today's penny stock could be tomorrow's winner
  • Potential for multi-year returns as the company grows
  • Not necessarily riskier businesses, just smaller companies


  • Higher risk especially compared to blue chips
  • Liquidity issues
  • Increasing volatility
  • Prone to scams
  • On average have more losers than winners
  • The business might have a short history

None of us can see into the future. What happens next is anyone's guess. However, we do know some big themes that currently drive the market:

  1. Stubbornly high inflation
  2. Interest rate rises
  3. China reopening

Stubbornly high inflation

Despite the best efforts of central banks around the world, inflation remains high. In Australia this is led by high house prices, supply delays, energy shortages, higher-than-normal savings rates during the pandemic and decades of low unemployment. While signs are that inflation has peaked, it is still well and truly above the Reserve Bank of Australia's target range.

Interest rate rises

Going hand-in-hand with stubbornly high inflation is interest rate rises. In order to fight off inflation, central banks need to lift rates. As it currently stands Australia's interest rates are now at their highest levels in 12 years, although from a historical point of view they still remain low.

China re-opening

One of the key drivers of the world's growth for the last few decades has been China. The country has now re-opened following strict COVID lockdowns which lasted until the end of 2022. China is effectively a year or so behind the western world in that it opened later, meaning it might have the same surging demand that countries like Australia had in late 2021 and early 2022 after it re-opened.

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances and obtain your own advice before making any trades.

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