Best buys right now: 2 penny stocks I’d invest in

I’m on the hunt for some of the best penny stocks to buy today. And the following low-cost UK shares have caught my attention. Here’s why.

| 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.

The FTSE 100 and FTSE 250 are back on the front foot in early July as investor appetite for UK shares improves. I’m looking for some of the best stocks to buy as the global economy steadily recovers. And I’ve my eye on a number of penny stocks in particular.

Now a lot of people don’t like to trade in  penny stocks. This is because their low cost can lead to severe price swings. However, as a long-term UK share investor, the prospect of extreme choppiness doesn’t discourage me from investing. I buy companies with a view to holding them for a decade, perhaps longer. Over this sort of time horizon, I can be confident the quality stocks I choose will rise in price, regardless of whether or not they trade below £1 when I buy in.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Besides, by seeking out penny stocks specifically, I can dig out some top-quality companies that the broader market has overlooked.

Hand holding pound notes

2 penny stocks on my radar today

Here’s what I consider to be two of the best penny stocks to buy now. I expect them to soar in value in the years ahead:

#1: A top UK retail share

It’s true that competition in the clothing retail arena’s intense. But N Brown Group has a number of cards up its sleeve I think will lead to handsome profits growth over the long term.

Its online-only model will allow it to exploit the e-commerce explosion and keep down costs. The cheapness of its apparel will enable it to ride the fast-fashion wave to the full. And its focus on selling garments for plus-size and older consumers gives it the edge in two fast-growing ends of the market.

At current prices of 55.5p per share, this penny stock trades on a forward price-to-earnings (P/E) ratio of 8 times. I think this makes it too cheap to miss.

#2: Another tasty stock to buy now

Finsbury Food Group could face pressure in the short-to-medium term as Covid-19 rates rise sharply again. Profits at the breadmaker have suffered in recent times due to the closure of the hospitality sector. But, over a longer time horizon, I’m confident this penny stock will deliver great returns.

The opening of a new gluten-free bakery in Poland last year, for example, illustrates the company’s commitment to continental expansion. It also demonstrates Finsbury’s responsiveness to changing consumer diets (in line with rising environmental and health awareness) which also includes new product launches like its BOSH! range of vegan cakes.

Today, this UK share trades at 93.5p. This means Finsbury trades on a forward P/E ratio of 10.5 times, broadly in line with the widely-accepted bargain territory of 10 times and below.

This adds an extra layer of appeal in my book.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

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.

More on Investing Articles

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

With no cash to invest, here’s how a falling stock market could still help me to get rich

Stephen Wright explains why falling share prices might be good news even for an investor with no cash on the…

Read more »

Business people shaking hands
Investing Articles

Director dealings: Lloyds, IAG, SSE

Director dealings can indicate whether a company's doing well. So, here are this week's director dealings from three of the…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Why Kingfisher’s DIY empire could mean it’s a recession-proof stock

Kingfisher’s stock has been pummelled in recent months, but historically DIY stores have done well during recessions.

Read more »

Burst your bubble thumbtack and balloon background
Investing Articles

4 recession stocks that I’d buy to protect myself

Jon Smith talks through some of the recession stocks he has on his watchlist, ready to go if the economy…

Read more »

Happy diverse people together in the park
Investing Articles

My Stocks and Shares ISA is in the red… and I’m still smiling

Having not invested through a downturn before, this is the first time I've seen my Stocks and Shares ISA showing…

Read more »

University graduate student diploma piggy bank
Investing Articles

Should I be concerned about the windfall tax for my BP shares?

What does the new UK windfall tax mean for the BP share price? Michelle Freeman digs into the details to…

Read more »

Buffett at the BRK AGM
Investing Articles

What Warren Buffett’s wisdom and investing in stocks will teach you about life

Investing is a journey of self-discovery. So what will stocks and the words of legendary investor Warren Buffett teach you…

Read more »

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

5 ‘no-brainer’ income stocks to buy today!

Amid soaring inflation, I'm looking at these income stocks, offering big yields, to grow my portfolio.

Read more »