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Growth stocks often dominate the headlines on both sides of the Atlantic. In the US, the S&P 500 is driven by giants such as Nvidia, while in the UK, Rolls-Royce has transformed itself into one of the FTSE 100’s hottest growth stories.
But some of the best growth stocks aren’t the big household names. They’re often smaller businesses hiding in plain sight, waiting for a breakthrough moment. This week, two such companies caught my eye — and I’ll admit I’d barely heard of them until now.
Both Shield Therapeutics (LSE: STX) and Pantheon Resources (LSE: PANR) soared by more than a third in just five trading days. Let’s take a closer look.
Shield Therapeutics
Shield Therapeutics is a niche pharmaceutical firm that I first discovered earlier this week. It has a single on-market product called Accrufer, used to treat iron deficiency. Despite being a penny stock, it has just posted results that lit a fire under the share price.
Earnings doubled, while revenue surged 139% year on year. The stock jumped 40% in response — although it remains down 94% over five years.
The business is still unprofitable, posting a £9m loss in H2 2024. But that’s a meaningful improvement from the £16m loss in H2 2023. Debt sits at £21m with £5m in cash, although it recently raised £10m from its largest shareholder, AOP, and renegotiated a £20m debt facility.
It’s risky, of course. With only one marketable product, everything hinges on Accrufer’s success and future approvals. That makes the stock highly speculative.
Still, I like the direction of travel. Losses are narrowing, sales are growing rapidly, and funding has been secured to push growth forward. For those with the appetite for higher-risk penny stocks, I think Shield could be worth considering.
Pantheon Resources
Pantheon Resources is a rather different beast. This £388m market-cap company is focused on oil and gas exploration in Alaska’s North Slope.
The shares shot up 35% this week after the company announced the spudding of the Dubhe-1 well in the Ahpun field. The results exceeded expectations, with the gross hydrocarbon column thickness coming in 26% above pre-drill estimates. Management reckons the net present value of the project could be as much as $1.74bn.
Financially, Pantheon looks sturdier than many exploration peers. It has £13.6m of debt against £307m in equity, with a price-to-book (P/B) ratio of 1.46. Like Shield, it remains loss-making — £9m down in 2024 — but that’s an improvement from a £13.5m loss in 2020.
Still, oil and gas exploration is notoriously volatile and valuations are often based on estimates and best-case scenarios, which may not materialise. While the Dubhe news is exciting, I’ll admit I’m no expert in mining and drilling valuations.
It could be one to consider for investors who know the sector well and can stomach the ups and downs.
My verdict
This week reminded me that not all growth stocks come wrapped in big brand names. Shield Therapeutics and Pantheon Resources are both high-risk, early-stage stories with plenty of uncertainty. But for investors seeking exposure to small-cap growth with big potential, they may be worth putting on the watchlist.
As for me, I’ll be watching from the sidelines — but I’ll admit, seeing them rocket nearly 40% in a week does pique my interest.