3 UK penny stocks I’d buy in June

UK penny stocks can offer great returns to patient investors. Here are three that I like for June.

| 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 investors see penny stocks as ultra-risky and volatile. Granted, plenty of small UK stocks priced under £1 can be prone to wild price moves.

That said, they shouldn’t be completely dismissed, in my opinion. Several UK penny stocks offer shareholders excellent potential returns.

High-flying penny stocks

One high-flying penny stock is Helium One Global (LSE:HE1). It aims to explore and supply high-grade helium to several growing industries.

Should you invest £1,000 in Dfs Furniture Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Dfs Furniture Plc made the list?

See the 6 stocks

Despite commonly being known for its use in balloons, that forms only a small part of its global usage. It’s used more in high-growth industries, including MRI scanners, data centres, and space rockets.

Helium supply is limited and demand is growing, leading to rising prices. If it can successfully find, extract, and supply the growing demand, Helium One could benefit.

A word of warning, however. Exploration is very risky. There are no guarantees that the expected levels of helium will be found and extracted. Also, mining licences are required and can be at risk of alteration by authorities. 

Mining for penny stocks

Another high-risk, high-reward penny stock I’d consider buying is Jubilee Metals (LSE:JLP). It’s exposed to and supported by strong and growing platinum-group-metal (PGM) prices.

Higher metal prices and increased output have helped the exploration company to significantly grow profits. In the second half of 2020, Jubilee saw profit jump by a whopping 355%.

Further growth could come from copper operations. That’s especially so as copper demand is being supported by global growth in the electric vehicle industry and US infrastructure spending.

That said, penny stocks in the mining industry can be high-risk. A fall in metal prices could have a material impact on Jubilee’s earnings. And some parts of the world it operates in carry additional risks.

Overall, I’d consider buying Jubilee Metals for the high-risk, high-reward part of my Stocks and Shares ISA.

Chain reaction

The next penny stock I’d consider in June is Renold (LSE:RNO). With a market capitalisation of just £61m, it’s tiny. However, what it lacks in size, it makes up for in potential. It’s not well known, but many of us may have walked past one of its industrial chains.

It’s a market leader in high-precision industrial chains and innovations. These have diverse applications, including escalators, underground trains, and even theme park rides.

Renold has a resilient business model. It’s a high-quality and reliable brand. Clients also tend to make repeat purchases for its chains. When chains need replacing in critical equipment, a high-quality product is the first point of call.

It’s currently undergoing a long-running turnaround plan. The results of this could deliver higher margins this year, in my opinion.

That said, there are some risks. It has large pension liabilities that could prevent it from increasing dividend payments. Also, if its turnaround and restructuring plans don’t work out, then the upside to its share price could be limited.

Looking at penny stocks can be a great way to find under-researched and relatively unknown companies. Risks can be higher, but overall, I think Renold is a cheap stock. As a result, I’d consider adding it to my Stocks and Shares ISA in June.

But there may be an even bigger investment opportunity that’s caught my eye:

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

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.

Harshil Patel owns shares in Helium One Global. 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

Jumbo jet preparing to take off on a runway at sunset
Investing Articles

Where could IAG shares go in the next 12 months? Here’s what the experts say!

After a stunning 129% rally, IAG shares have started to nosedive in recent weeks. Analysts are divided over the future…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The Eurasia Mining (EUA) share price is up 181% this year! What’s going on?

The Eurasia Mining (LSE:EUA) share price has had a simply stunning 2025 so far. What's going on -- and is…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

Is this the FTSE 100’s best dividend share?

Christopher Ruane weighs some pros and cons of a high-yield FTSE 100 share he believes investors should consider for their…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Down 27% in 3 days! Should I buy the dip in this FTSE 250 defence stock?

This FTSE stock has collapsed in recent days, leaving this Fool wondering if he's looking at a buying opportunity for…

Read more »

Investing Articles

Is ITV a screaming FTSE 250 bargain hiding in plain sight?

Down by over two-thirds in around a decade, this well-known FTSE 250 share now trades on what may look like…

Read more »

Investing Articles

Is this FTSE 100 AI growth stock beginning to run out of steam?

Despite it being a runaway success, Andrew Mackie is becoming increasingly concerned for the momentum of this AI growth stock.

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Up 12% today, here’s a great FTSE 250 growth share to consider!

Softcat's share price is soaring following a blockbuster first-half trading announcement. Here's why the FTSE 250 share is worth a…

Read more »

Growth Shares

Prediction: in 1 year, the easyJet share price could be as high as…

Jon Smith points out why the easyJet share price could head higher over the coming year based on the current…

Read more »