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Investors who get in early on the right penny stock can make off like bandits if and when it skyrockets.
Just look at Filtronic for proof. Shares of the communications technology firm were changing hands for as little as 9p back in 2022. Fast forward to today, you’d have to pay nearly £2 to snap one up!
With this in mind, I asked AI app ChatGPT to name a penny stock that could make me rich. Here’s what it said.
Annoying habit
As is widely accepted, AI chatbots can pump out inaccuracies like a drunk at the bar explaining geopolitics after five pints. And they sometimes hallucinate like they’ve had 10 pints.
I exaggerate, slightly. But in my experience, ChatGPT has an annoying habit of not giving me what I asked for. A penny stock is generally defined as trading for less than 100p, typically with a market-cap below £100m.
So what did ChatGPT give me? One trading for 118p, with a market-cap of £190m!
Corporate distress
Anyway, the stock it suggested was Begbies Traynor (LSE:BEG), an AIM-listed company specialising in insolvencies. I’m familiar with this one because I wrote about it in the summer, saying it should perform well due to the sorry state of the UK economy.
Begbies Traynor stock has only meandered sideways since, but it’s up 28% over one year, outperforming the FTSE AIM All-Share Index. Across five years though, it’s essentially flat.
ChatGPT called Begbies Traynor a “counter-cyclical beast”, as it makes money from insolvencies and corporate distress. Today, many businesses are failing and in need of restructuring. This is primary due to inflation, higher interest rates and weak consumer demand.
In the first half of 2025, the company’s revenue grew 7% to £82m, while adjusted diluted earnings per share lifted 6%, boosted by a share buyback programme. The interim dividend edged up 7%, the eighth consecutive year of growth.
In the firm’s property advisory unit, profit growth was 26% as it benefited from efficiencies and resilient property auction volumes despite macroeconomic uncertainty.
Begbies Taylor has a specialist team that provides pre-insolvency planning services to UK sports clubs. In October, it was appointed as the joint administrators to Sheffield Wednesday after the football club fell into administration.
The company says there’s “a growing structural financial distress among lower-league clubs in the UK’s three most popular sports — football, rugby league, and cricket“.
For the full year, the firm is confident of meeting market expectations for adjusted pre-tax profit of £23.7m-£24.9m.
Doom and gloom
One risk here is that the economy suddenly starts firing again (no laughing at the back). Begbies Traynor also faces competition, though it’s operating in a fragmented market in which it has been quietly buying smaller firms.
Earlier this week, the company published its quarterly ‘Red Flag Alert Report’ for Q4 2025. In this, it said the number of businesses in ‘critical’ financial distress rocketed 43.8% year on year.
On balance, I still think the stock will do well. It’s trading at just 10 times forward earnings while offering a 3.9% dividend yield.
Begbies Traynor could be considered as a hedge against the weak UK economy. But I doubt it’s one to make investors rich, despite what my chatbot chum says. I’ll keep looking.
