‘Nearly’ penny stocks! A dirt-cheap growth share to buy today

I’m searching for great penny stocks that could help me supercharge my wealth over the next decade. Here’s one that trades just above the limit of £1.

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Today, I’m searching for the best cheap stocks to buy for my portfolio. Here’s a brilliant bargain that trades just above penny stock territory.

A top share for tough times

The British economy is beginning to seriously toil as inflation leaps and the cost of living crisis worsens. The threat to many UK shares is growing and it could be time for me to take action.

One way I can do this is to buy some classic counter-cyclical shares. These are the companies whose products and services grow in demand as economic conditions become difficult.

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Insolvency specialist Begbies Traynor Group (LSE: BEG) is one such UK share I think could protect me from the rising threat. And latest data from the Insolvency Service illustrates why.

Insolvencies soar

According to the government body, there were 2,114 company insolvencies in March. That was more than double the 999 recorded in the same month in 2021. It was also 34% more than the pre-pandemic levels recorded in March 2019.

Rising interest rates mean businesses are having to pay more for their borrowings. On top of this, soaring power costs and sinking consumer spending is also pushing many companies over the edge.

So firms like Begbies Traynor are becoming increasingly busy. Their activity is likely to keep rising too as inflation continues to rocket and the Bank of England responds by hiking rates.

The Office for Budget Responsibility certainly thinks price rises have some way to go. It thinks consumer price inflation will peak at 8.7% in 2022.

Growth hero

It seems increasingly likely that severe inflationary pressures will stretch into 2023 too. So it’s also perhaps no wonder that City analysts expect Begbies Traynor’s long record of annual earnings growth to roll on.

Current forecasts suggest that earnings will rise 24% in the current fiscal year (to April). They expect the bottom line to grow an extra 10% and 3% in financial 2023 and 2024 too.

Acquisitions keep coming

Begbies Traynor’s long record of earnings growth shows it’s not just a great stock to buy for right now however. The business has been extremely active on the acquisition front to give earnings an extra kick. Its track record on this front is pretty solid too as its recent profits history shows.

Pleasingly, Begbies Traynor has kept momentum going here, acquiring MAF Finance Group and Daniells Harrison Surveyors in the current fiscal year. The business has plenty of financial headroom with which to pursue further attractive opportunities too.

Begbies Traynor currently trades on a price-to-earnings (P/E) ratio of around 11 times. I think this is a bargain given the ‘nearly’ penny stock’s excellent growth prospects in the near term and beyond.

Profits could suffer if its acquisition-led growth strategy fails to deliver the goods. Begbies Traynor could also see earnings slow during strong economic periods. Still, at 107p per share, I think this growth stock might be too cheap for me to miss.

But here’s another bargain investment that looks absurdly dirt-cheap:

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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.

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