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3 ‘nearly’ penny stocks to buy

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These low-cost UK shares all trade just above the penny stock limit of £1. Here’s why I’d buy them for my shares portfolio today.

A ‘nearly’ penny stock for the e-commerce age

Having exposure to e-commerce is one of the hottest games in town today. One of the ways I’ve sought to embrace the stunning rise of online shopping is by buying FTSE 100 cardboard box manufacturer DS Smith.

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I think Macfarlane Group (LSE: MACF), which trades at 116p per share, could be another great UK share with which to play rising packaging demand. It designs and prints self-adhesive labels and creates protective packaging products.

Rising paper prices are a constant threat to companies in this sector. And the problem of soaring raw material values is particularly problematic today as the economy bounces back and supply issues persist.

Still, I think the rate at which e-commerce is tipped to keep expanding makes Macfarlane a top growth stock to buy. Insider Intelligence thinks global online retail sales will reach $6.5trn in 2023, up from $4.9trn today.

Testing titan

A recent price spurt has taken Calnex Solutions (LSE: CLX) above penny stock territory, recently trading at 103p per share. I think this could be a top UK share to buy as the digital revolution gathers pace.

And I think it’s particularly attractive at current prices. It trades on a forward price-to-earnings growth (PEG) ratio of just 0.7.

Calnex manufactures specialist testing and measuring equipment for telecoms customers across the world. This means it’s in great shape to exploit the rise of 5G and booming demand for cloud computing.

Revenues here leapt 31% in the last fiscal year as repeat business jumped and new customers came on board. I’d buy it despite the fact that almost all revenues are generated in US dollars. This could create a problem if the greenback falls in value against the pound (as many economists are predicting).

Sun king

I believe Bluefield Solar Income Fund Limited (LSE: BSIF) could be another top ‘nearly’ penny stock for me to own during the 2020s. As the name suggests, this UK share (which trades at 119p) acquires and then manages solar energy farms. This puts it in one of the prime seats to ride the green energy revolution.

Experts at Allied Market Research think the solar industry will be worth $223.3bn five years from now. That’s more than four times larger than the market was worth back in 2018.

It’s important to remember that operating solar farms is hugely expensive and costs can take a huge bite out of earnings. Another risk to Bluefield Solar is the energy industry is highly regulated and any changes on this front could severely damage its long-term prospects.

That said, the landscape currently looks promising enough to suggest cheap UK shares like this could generate terrific investor returns in the 2020s.

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Royston Wild owns shares of DS Smith. The Motley Fool UK has recommended DS Smith. 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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