Most penny stocks promise the world and quietly disappear. But every so often, a genuinely interesting business emerges from this volatile corner of the market and starts to deliver real, numbers-backed momentum.

And I think I may have just spotted one of these winners.

Explosive momentum and potential

Chances are most investors have never heard of Iofina (LSE:IOF). Yet since the start of April, the penny stock has surged over 92%, transforming a £1,000 initial investment into almost £2,000 in less than three months!

As a quick introduction, Iofina’s a vertically integrated iodine producer and speciality chemicals manufacturer operating in Oklahoma and, imminently, the Permian Basin. And the reason behind its sudden share price explosion sits almost entirely within its latest 2025 full-year results.

This was Iofina’s eighth consecutive year of achieving record revenue, which jumped 22% to $66.5m. With operations scaling nicely and margins expanding, this paved the way to an impressive 56% surge in adjusted EBITDA, from $7.6m to $11.8m, while pre-tax profits climbed even faster, by 75%, reaching $8.4m.

With that in mind, it isn’t a surprise to see Iofina shares start to gain some chunky momentum. The question now is, can the penny stock continue to climb even higher?

What’s on the horizon?

In December 2025, Iofina signed an agreement with Western Midstream Partners to build its first Permian Basin iodine extraction plant – the largest facility in the group’s history.

This new plant is expected to come on-line in the second half of 2026, adding between 170 and 220 metric tonnes of annual production. And at current iodine prices, that represents a potential $12.6m-$16.3m increase in annualised revenues.

At the same time, with production volumes improving across other parts of the business, management has also upgraded its production guidance for the first half of 2026. And the group is now “close to achieving 1000MT crystalline iodine production on an annualised basis once the Permian Basin plant comes on-line”.

It’s an impressive milestone. And a nicely-timed one as well, given that iodine prices are steadily marching upwards thanks to increased demand from medical imaging, LCD screens, and emerging opportunities in the solar sector.

So what’s the catch?

The Permian Basin plant is the group’s most ambitious project yet. Delivering it on time and within budget isn’t guaranteed, even with management demonstrating a solid track record so far. Any construction delay would push back the production ramp and could weigh on sentiment quickly.

There‘s also iodine price sensitivity to consider. While demand appears to be robust for now, commodity prices are notoriously cyclical and iodine spot prices have historically proven quite volatile. If prices fall significantly, then even with a ramp-up in production volumes, revenues and earnings could nonetheless suffer.

The bottom line

Iofina’s not your typical penny stock. It has a clear growth strategy, a track record of execution, and some genuinely exciting structural demand tailwinds behind it. And with the recent share price surge rooted in real financial progress rather than hype, I think investors should start paying attention.

Whether the current rally continues depends on the Permian Basin plant and iodine pricing. But on current evidence, this is a penny stock I’m watching very closely.

Should you invest £5,000 in Iofina Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Iofina Plc made the list?

Zaven Boyrazian does not hold any positions in the companies mentioned.