3 penny shares under 70p to buy right now?

When stock markets fall, penny shares can often drop the furthest. I’ve been examining AIM in search of today’s best value buys.

| 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.

Stacks of coins

Image source: Getty Images

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.

Penny shares are often seen as riskier than usual, and they can be. That means they can fall more than others when the market is dropping and investors are looking for safety.

Does that mean it a good time to buy penny shares now? With a bit of care, yes, I think it is.

I’m looking at three here with market caps between £50m and £100m, and share prices between 50p and 70p. They’re all listed on the Alternative Investment Market (AIM).

Investment

Ebiquity (LSE: EBQ) provides investment analysis and marketing analytics.

We’ve seen losses for the past couple of years. But forecasts show a profit for 2022, with results due on 30 March.

Revenue is reportedly up by 20%, with organic revenue up 9%. A 12% operating margin is four percentage points up on the prior year.

There’s £8.9m of net debt. But against a market cap of £63m, that looks fine to me.

Profit forecasts suggest a price-to-earnings (P/E) ratio of around 20. And that’s not obviously cheap. But if the outlook for the next couple of years is accurate, we could see it plunge to only around seven by 2024.

Ebiquity’s business must be vulnerable to any extended economic downturn, and I think that’s the biggest risk.

But if profits are sustainable now, I think it could be a long-term buy.

Lithium

CleanTech Lithium (LSE: CTL) floated on AIM in March 2022 at 30p. Since then, it’s up 66%.

The company has two lithium prospects in Chile. And any investment is a play on the future of demand from the battery business.

There are no profits on the table yet. Or, in fact, any revenue. So CleanTech has got to be the riskiest of the three. But I think it has a few things in its favour over rival lithium explorers.

Its operations in Chile appear stable and uncontroversial, and it has plentiful renewable energy resources at its disposal.

And thanks to its IPO and subsequent cash-raising activities, it looks to be sufficiently funded at the moment.

The success of an investment will depend on how long it takes CleanTech to reach profit. And forecasts don’t go that far yet. But I’m tempted to risk a small amount.

Property

Property shares seem like poison right now. And OnTheMarket (LSE: OTMP), which provides a residential property portal for potential buyers, sellers, landlords, and tenants, has suffered.

The company has had a couple of very tough years, and its shares have been on a long, slow slide.

And, well, the 2023 outlook for the property market isn’t exactly the brightest I’ve ever seen. But forecasts suggest it could be a turnaround year for the firm.

OnTheMarket’s year ended in January, and the latest trading update looks good. Operating profit should be between £4m and £4.5m (up from £2.7m).

And there’s £10.4m in cash on the books, with no borrowings.

Forecasts indicate a big rise in profits, which could drop the P/E to around nine by 2025. Even with today’s property risk, I think that’s cheap.

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.

Alan Oscroft 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

The flag of the United States of America flying in front of the Capitol building
Investing Articles

2 UK shares that could rise if Trump wins the Presidential election

These UK shares are among the FTSE 100's most popular stocks. And they could rise in value if Donald Trump…

Read more »

Closeup ruffled American flag representing US stocks and shares
Investing Articles

2 UK stocks that could rise if Harris wins the Presidential election

Royston Wild believes these UK stocks could receive a bump if Kalama Harris wins the Presidency, giving their share prices…

Read more »

Investing Articles

After a 96% plunge, is buying more Aston Martin shares throwing good money after bad?

Just two weeks after buying Aston Martin shares Harvey Jones found himself nursing a painful loss. Yet after recent news…

Read more »

Investing Articles

After crashing 45% in October, should I buy this FTSE 250 share for my Stocks and Shares ISA?

Roland Head explains why he’s tempted to add this risky FTSE 250 turnaround share to his Stocks and Shares ISA…

Read more »

Investing Articles

Could I use a stock market crash to turn £20k into half a mil in just over a decade?

A stock market crash might sound terrifying to some but it can also present a once-in-a-lifetime opportunity to accumulate generational…

Read more »

Investing Articles

Recently released: October’s small-cap stock recommendation [PREMIUM PICKS]

We believe the UK small-cap market offers a myriad of opportunities across a wide range of different businesses and industries.

Read more »

Investing Articles

Here’s how a Stocks and Shares ISA and Lifetime ISA could supercharge my wealth!

Individual Savings Accounts (ISAs) can help UK share investors take their earnings to the next level. And their importance is…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

A high-yield dividend ETF and an investment trust to consider this November!

Investors wanting to boost their passive income could benefit from investigating these high-yield funds and trusts, says Royston Wild.

Read more »