I don’t have unlimited sums of money to spend on UK shares. But here are four top penny stocks I’d buy for my Stocks & Shares ISA if I have cash to invest.
I think they could deliver exceptional returns through to the end of the decade, perhaps longer.
Chaarat Gold
Gold stocks like Chaarat Gold are famously sensitive to movements in the bullion price. This means profits at such companies could suffer in the near term as the Federal Reserve keeps hiking interest rates. Rate increases boost the US dollar and make it more expensive to buy gold.
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Yet I still think gold stocks are an attractive asset to own. The yellow metal is one of the world’s foremost safe-haven commodities. So when sudden economic shocks occur, these businesses can help investors to protect their wealth.
I particularly like Chaarat because of its strong production record. Output at its Kapan mine in Armenia hit a better-than-expected 63,000 ounces in 2022. The company also owns exciting development assets in Kyrgyzstan.
Eco Animal Health
The market for animal medicines is poised to expand strongly in the years ahead. The amount people spend on their pets is steadily rising, while increasing meat consumption is bolstering demand for livestock treatments.
This is why I’m considering investing in Eco Animal Health. This business specialises in providing medical products for food animals. And it has operations in Latin America and Asia, where meat consumption is rising especially strongly.
The ongoing Covid-19 crisis in China poses a significant risk to profits in the immediate term. The small-cap company sources a significant proportion of revenues from the country. Yet I believe Eco Animal Health is still an attractive buy for long-term investors.
DP Poland
Weak consumer spending and higher cost inflation remain a danger for DP Poland. But I believe the business remains a great penny stock to buy as food delivery demand ignites.
The business is the master franchisee of the Domino’s Pizza brand in Poland. And both sales and earnings remained robust in 2022 despite these headwinds. Like-for-like revenues jumped 21% last year while “profitability stayed on a positive trend over the last six months,” it said last month.
I’m also encouraged by DP Poland’s expansion into Croatia last June. Takeaway demand here is also forecast to boom as personal income levels improve.
Nexus Infrastructure
Housebuilding activity will need to be ratcheted up over the next decade. The government has set a target of 300,000 new homes per year to meet the needs of a growing population. This provides an excellent opportunity for Nexus Infrastructure to supercharge profits.
The penny stock builds infrastructure like roads and sewers on housing projects. Other services include digging foundations, creating basement space, and supplying reinforced concrete structures. This broad expertise makes it a popular choice with construction companies, which, in turn, helps it to grow earnings.
I’d buy Nexus Infrastructure shares even though earnings could suffer in the near term as the housing market cools.
