2 cheap penny stocks and 1 FTSE 100 share to buy in my ISA!

I’m searching for great-value penny stocks and FTSE 100 shares to buy right now. Here are three I’d happily add to my Stocks and Shares ISA.

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I’m thinking of buying these cheap penny stocks and this FTSE 100 share for my Stocks and Shares ISA today.

Home comforts

A bright outlook for the UK homes market encouraged me to invest in FTSE 100 shares Taylor Wimpey and Barratt Developments a few years back. Even though the pandemic has smacked the economy these theoretically-cyclical shares remain as attractive as ever, in my opinion.

A string of factors have helped homes demand to continue climbing in the UK, from increased government support for first time buyers, to low interest rates and extreme competition in the mortgages market.

These drivers look likely to remain in play in the Irish housing market too. And so I’d consider buying penny stock Cairn Homes (LSE: CRN) for my ISA. This particular UK share trades on a low forward price-to-earnings growth (PEG) ratio of 0.7. It carries a gigantic 11% dividend yield for 2021 too.

Analysts think annual earnings here will rise by around a fifth year-on-year in 2021, though bear in mind that shortages of key materials could hamper Cairn Homes’ build rates and thus cause these estimates to miss their target.

A pile of British one penny coins on a white background.

Another cheap penny stock

I believe Gaming Realms (LSE: GMR) offers some staggering value at current prices as well. City analysts think annual earnings here will climb around 280% in 2021, resulting in a corresponding PEG multiple of just 0.2. Remember that a figure below 1 suggests that a UK share might be undervalued at current prices.

This hi-tech penny stock builds software for slots and casino games that can be played on mobile phones and tablet PCs. It’s therefore in the box seat to exploit the stunning growth in the online gambling industry right now. Indeed, Gaming Realms, which licences its games to betting and gaming operators, launched with 26 new partners across the globe last year.

I think this company is a great buy despite the huge threats posed by the highly-regulated nature of the gambling sector. Any law changes could severely smack demand for Gaming Realms’ product.

A FTSE 100 favourite

BAE Systems (LSE: BA) doesn’t fall within penny stock territory of below £1 a share. But I think it’s still a great UK value share at current prices. City brokers think annual earnings at this FTSE 100 share rise 3% in 2021.

Therefore the defence contractor trades on a quite-reasonable price-to-earnings (P/E) ratio of 12 times. What’s more, the current BAE Systems share price means the dividend yield clocks in at an inflation-mashing 5%.

Like any UK share, this FTSE 100 firm isn’t without its share of risk. For one, the business sells a lot of its goods to Saudi Arabia. This leaves it vulnerable to possible export bans to the Kingdom like we’ve seen in the past. That said, I still think BAE Systems is a top blue chip to buy right now.

I expect global arms spending to keep rising annually for the considerable future. And key contractors like this are well-placed to benefit.

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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