One penny inventory I just like the look of is Revolution Magnificence Group (LSE: REVB).

Not all small-caps can flip into market leaders or blue-chips. Many do fail resulting from a scarcity of economic may, or are taken over by greater corporations.

Nonetheless, I reckon Revolution might see itself rising, and offering me with some juicy returns. Right here’s why.

Magnificence is within the eye of the beholder

Revolution is a magnificence and private hygiene enterprise that sells a number of manufacturers. It does this direct-to-consumers, and through wholesalers too.

The shares have meandered up and down like an thrilling curler coaster I used to get pleasure from once I was (a lot) youthful. They’re at the moment buying and selling for 24p, which is strictly the identical degree as at the moment final yr. Nonetheless, the shares have surpassed the 100p mark beforehand, in 2022, to be particular.

Revolution has been marred by boardroom politics in latest instances, which has in all probability held the shares again. The departures of high-level execs, and the rising stake within the fast-fashion enterprise boohoo, has been problematic, in my eyes.

With all this occurring, I’m not stunned that institutional buyers wish to see the lay of the land in respect of the agency’s management and route. Plus, full-year outcomes for the interval ending February 2024 haven’t been launched but.

The funding case

Persevering with the theme of points and dangers, boardroom instability is a fear. This will affect the route of the enterprise, which might harm operations, earnings, and investor sentiment. That is one thing I’ll hold an in depth eye on.

Subsequent, the wonder market could be very aggressive, and the margins aren’t at all times the most important, particularly with present inflationary pressures too. As I referenced above, a bigger participant might take the enterprise over, or simply outmaneuver it completely into non-existence.

Nonetheless, it’s not all doom and gloom, for my part. Forecasts point out the agency’s first worthwhile yr since preliminary public providing in 2021 is on the playing cards. This could possibly be large for the enterprise, and shares. Nonetheless, I’m aware that forecasts don’t at all times come to fruition. Plus, the agency possesses a good trying stability sheet, which is at all times constructive for small caps.

Subsequent, the enterprise has managed to develop an amazing footprint regardless of the actual fact it hasn’t been round a very long time. This features a huge geographic footprint, in addition to key wholesale relationships.

Lastly, from a normal perspective, the wonder market is a burgeoning one which reveals no indicators of slowing based on knowledge big Statista. This could possibly be excellent news for the enterprise and its progress aspirations.

What I’m doing now

Trying again at latest occasions, the overall panorama of the market, in addition to historic share price efficiency, I’m buoyed by Revolution. I reckon there’s potential for this inventory to climb a lot larger.

I’d be keen to purchase a small variety of shares at simply 24p per share once I can and see what occurs. I’ll be marking my calendar for full-year outcomes, and hope boardroom unrest is now a factor of the previous!