2 ASX Penny Stocks on the Verge of a Breakout

Penny stocks can be tricky — they’re volatile, often overlooked, and can swing sharply on just a single announcement. But it’s exactly that combination of risk and hidden potential that makes them so fascinating to investors hunting for the next breakout story. Small caps often catch fire after transforming earnings, landing game-changing contracts, or unearthing a new resource discovery.
Right now, two names on the ASX look primed for just that kind of move: Alfabs Australia (ASX: AAL) and Trigg Mining (ASX: TMG). Both companies are operating in sectors where news flow drives re-ratings, and both have credible growth stories that analysts believe could push them higher. Let’s take a closer look.

Alfabs Australia (ASX: AAL): Industrial Upside and Earnings Acceleration

Alfabs Australia isn’t your average penny stock — it’s a diversified industrial services and equipment company with deep roots in mining and infrastructure. From engineering and fabrication to equipment hire and refurbishment, AAL provides the backbone services that keep heavy industries moving.
The company’s FY25 results put it firmly on investors’ radar.

1. Numbers that matter: Revenue for FY25 reached $95 million, holding steady year-on-year, but earnings told a different story. Net profit surged to $12 million, a massive 242% increase, while earnings per share (EPS) grew 29%. Importantly, operating margins expanded as the company focused on higher-value services and renewed its fleet.
2. Attractive valuation: As of late September, AAL traded around $0.49 per share with a trailing P/E ratio of 10 and a forward P/E closer to 8. Investors are also enjoying a fully franked dividend yield of 7.5%, which is eye-catching for a small cap. Consensus analyst targets sit near $0.55 over the next 12 months, with most ratings leaning toward a “Buy.”
3. Future growth levers: Analysts are projecting double-digit revenue and EPS growth annually for the next three years. Return on equity (ROE) is expected to exceed 22% by FY27, reflecting efficient capital use. Add in low debt, strong free cash flow, and disciplined capex, and AAL appears well positioned even in a slower economic cycle.
   Why it’s poised for a breakout: Alfabs recently secured several large contracts, adding to forward revenue visibility. Analysts have also revised technical and fundamental outlooks upward, and sentiment is strengthening around the stock. With its combination of yield, earnings momentum, and growth contracts, AAL looks like a small-cap industrial name ready to punch above its weight.

Trigg Mining (ASX: TMG): Sulphate of Potash Meets Strategic Battery Metals

While Alfabs is all about industrial resilience, Trigg Mining is offering exposure to one of the hottest themes in global resources: critical minerals.
Traditionally, Trigg has focused on its Lake Throssell Sulphate of Potash (SOP) project in Western Australia. SOP is essential for food security, particularly in producing high-value crops. In late 2024, Trigg expanded the Lake Throssell resource by 90%, cementing its position as one of the largest SOP brine projects in Australia.
But in 2025, Trigg broadened its horizons by acquiring three high-grade antimony projects, stepping into the battery metals space. Antimony is used in energy storage, semiconductors, and advanced alloys — all areas seeing surging demand as global electrification accelerates.
Here’s why Trigg is catching attention:

1. Financial runway: After two well-supported capital raises in late 2024, Trigg entered June 2025 with $1.56 million in cash. That gives it the flexibility to fund exploration and development across gold, SOP, and antimony.
2. Resource growth: Expansion drilling at Lake Throssell continues, while Trigg also pursues gold targets in Queensland’s Drummond Basin and antimony prospects in New South Wales. Institutional investors took part in the most recent placement, signaling rising confidence in the company’s multi-commodity strategy.
3. Catalysts ahead: For Q4 2025, Trigg has active drilling underway across antimony and gold projects. Updates to the Lake Throssell SOP resource are also on the horizon, and any progress on offtake agreements or financing could be a major trigger, especially if SOP prices firm up globally.
   Why it’s poised for a breakout: Trigg is straddling two big structural themes — food security and battery technology. That kind of positioning often attracts long-term capital, and with catalysts lined up in the near term, TMG is one to watch closely.

The Upshot

So, what makes these two penny stocks worth watching in an often-crowded small-cap market?
Alfabs Australia (AAL): A turnaround in earnings, strong dividend yield, and credible growth forecasts give this industrial name plenty of upside. With analysts upgrading their outlook and fresh contracts secured, AAL looks like it has momentum on its side.
Trigg Mining (TMG): By blending its potash foundation with new exposure to battery metals, Trigg offers investors a play on two global megatrends. Funded exploration, resource expansion, and near-term drilling results could all act as breakout triggers.

Bottom Line

ASX penny stocks are never without risk, but that’s precisely why they can deliver outsized rewards. Both Alfabs Australia and Trigg Mining combine credible fundamentals with clear catalysts on the horizon.
For AAL, it’s about converting industrial expertise into sustained profit growth and rewarding shareholders with yield. For TMG, it’s about leveraging its potash base while adding exposure to the high-growth world of critical minerals.
In the high-volatility environment of small-cap investing, a breakout can be just one contract win, discovery update, or analyst re-rating away. These two companies have set the stage — and for investors looking for the next story stock on the ASX, Alfabs and Trigg may be names worth circling.

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