2 of the best penny stocks to buy right now

I’m searching for the best penny stocks to buy for my investment portfolio today. Here are two quality low-cost UK shares on my watchlist.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Many UK share investors remain reluctant to invest their cash in penny stocks. These cheap shares can be prone to bouts of massive price volatility due to their low liquidity. And their prices can fall off a cliff if negative news flow related to the company hits the airwaves.

I don’t have a problem buying penny stocks for my own shares portfolio, however. This is because I buy UK shares with the aim of owning them for a long period of time, say 10 years or more. So the possibility that prices could be choppy at times doesn’t put me off. I’m confident that the stocks I’ve chosen to buy will demonstrate the quality to rise in price over the next decade.

Here are what I think could be two of the best UK penny stocks to buy right now.

Meat-free mammoth

Companies that help develop and manufacture so-called ‘clean’ and meat-free foods could prove to be great investments as people change their diets on health and welfare grounds in huge numbers. This is where Agronomics (LSE: ANIC) comes in, an investment firm chaired by Innocent Foods co-founder Richard Reed. This penny stock’s investments include fake beef manufacturer Mosa Meat, synthetic cheese maker Formo, and Bond Pet Foods which makes meat-free foods for companion animals.

The field of ‘next gen’ foods is attracting huge investment from specialised businesses (like those of Agronomics) as well as from multinational food manufacturers. Even global meats giant Tyson Foods is splashing the cash to exploit the vegan revolution. So Agronomics is operating in an extremely competitive environment which means that success is not guaranteed.

That said, the stock has stakes in a number of cutting-edge firms whose industry-leading technologies could have a huge part to play in our dietary changes over the next few decades. Nielsen says that plant-based food sales rocketed 264% year-on-year in the nine weeks to 2 May, illustrating the huge potential of companies like this.

Another top penny stock

I think getting a slice of the electric vehicle (EV) market is another good idea for UK share investors like me. And I believe that investing in Savannah Resources (LSE: SAV) is a good way to play this theme.

Why? Well this penny stock owns the Mina do Barroso lithium project in Portugal. And so it’s in the box seat to exploit exploding demand for EV vehicles. The European Commission has set a target of having 30m EVs on the road by the end of the decade. That compares with fewer than 2m at the end of 2020.

A word of warning, though. Setbacks in the development of Mino do Barroso could have serious ramifications for Savannah Resources’s profits outlook and cost models, and critically for small-cap UK shares like this, its balance sheet. Still, the company’s share price has dropped sharply in recent months due to fears over car production rates on supply chain issues. And I think this makes the penny stock an attractive dip buy for long-term investors like me.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

Is the S&P 500 going to 10,000 by 2030? This expert thinks so

One stock market strategist sees animal spirits taking hold and driving the S&P 500 index even higher by the end…

Read more »