E-commerce is a business activity to which I’ve bulked up my exposure following the Covid-19 era. I loaded up on Tritax Big Box REIT and Clipper Logistics, shares that have soared in value as demand for their warehousing and logistics services have boomed. And I’m thinking of snapping up penny stock Attraqt Group (LSE: ATQT) to ride the online retail boom as well.
This particular UK share allows e-tailers to provide personal shopping experiences to their customers using AI algorithms. And it’s doing a roaring trade as the virtual marketplace becomes more competitive and companies try to get an edge. Attraqt’s annual recurring revenues ballooned 40% year-on-year in the six months to June.
Analysts at eMarketer think e-commerce market will continue soaring. They think it will account for 21.8% of all global retail sales in 2024, up from a predicted 19.5% this year. The sales opportunities for shares like Attraqt therefore look pretty compelling, at least in my view. Though I’m aware that this software share is loss-making. And any delays to moving into the black, whether through rising costs or disappointing revenues, could have a significant impact on the Attraqt share price.
The cannabis market is another that’s tipped for big growth, over the next decade at least. Boffins at Fortune Business Insight think the market will be worth $97.4bn in five years. It should grow at a compound annual growth rate of 32.9% between 2018 and 2026. Kanabo Group (LSE: KNB), which makes cannabidiol-based products, could be well placed to exploit this boom.
As well as selling products such as oils, the business is betting big that its medical-grade VapePod vaporiser will make it big profits in the years ahead. The penny stock shipped its first batch of cartridges for the technology into the UK earlier this month. Lawmakers are becoming increasingly receptive to the use of cannabis to treat physical and psychological disorders. But the issue remains controversial and any U-turn by legislators would have a devastating effect on Kanabo’s operations.
A penny stock on a roll
Consumers are demanding more and more bang for their buck. The rise of discount supermarkets Aldi and Lidl over the past decade is the most obvious illustration of the booming demand for value. It’s a theme that is playing into the hands of facial tissue, and toilet and kitchen rolls, manufacturer Accrol Group Holdings (LSE: ACRL).
This stock manufactures private label products that are sold by almost every major British supermarket. And it is grabbing market share at an impressive rate. Accrol grew its share of the market to 15.9% in the last fiscal year (to April 2021) from 12% two years earlier.
I’m tipping Accrol’s sales to continue chugging steadily higher. However, it’s important for me to remember that rising raw material costs could have significant consequences for the company’s bottom line.
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Royston Wild owns shares of Clipper Logistics and Tritax Big Box REIT. The Motley Fool UK has recommended Clipper Logistics and Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.