2 speculative penny stocks I’m thinking about buying

I’m hunting for cheap UK shares packed with potential for the next decade. Here are two top penny stocks I think could be top buys for me.

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I think Scancell Holdings (LSE: SCLP) could be great penny stock to buy as the Covid-19 crisis stretches on. News flow coming from this cheap UK healthcare share on the development of a coronavirus vaccine has remained extremely positive.

Yet its share price has continued to trade basically sideways for the past six months. An update on testing in the second half could light a fire under the pharma play’s share price again.

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Of course, buying drugs developers can be high risk. There’s no guarantee trials will come back positive, in this case neither for the testing of said vaccine later in 2021, nor for its other products used to treat cancer and infectious diseases.

But at the moment, news flow surrounding its Covid-19 battler for one continues moving in the right direction. South Africa signed off for Phase 1 clinical trials to begin late last month.

Packed with potential

I think Scancell could be considered to be a very speculative buy. But if it gets things right, the rewards for investors could be considerable. As for Covid-19, analysts at McKinsey & Company predict the pandemic will drag on for the next few years, at least. And, pleasingly for the likes of Scancell, they anticipate “it is likely that some measures such as booster vaccines are likely to be required indefinitely.”

Scancell’s work in the fast-growing fields of oncology and infectious diseases also offers plenty to be encouraged by. Although it’s worth noting City brokers don’t expect the penny stock to turn a profit for the next few years at least. Drugs R&D is expensive business, and Scancell may well be forced to tap shareholders for cash before too long.

Another exciting penny stock

Powerhouse Energy Group’s (LSE: PHG) another penny stock packed with potential. The escalating climate crisis means legislators are accelerating plans to further their green agendas. And this plays into the hands of this UK energy share.

Powerhouse has developed proprietary technology than turns discarded plastic, tyres and other waste items into clean energy, in this case a hydrogen-rich gas.

Hydrogen is one area of energy in which lawmakers are stepping up investment. In the UK, for instance, the government plans to develop 5 gigawatts of low-carbon hydrogen production capacity by 2030. Analysts at Bank of America think hydrogen will take 25% of global oil demand by 2050.

This doesn’t mean Powerhouse Energy is a slam dunk for those seeking to ride the green revolution, of course. Okay, the penny stock generated its first-ever revenues in 2020, thanks to initial engineering work on the Protos energy recovery facility in Cheshire.

But this line of work is naturally complex and expensive. So any problems with getting its technologies up and running (it’s hoped Protos will be working by 2022) could hammer its sales expectations and force it to ask investors for cash.

Still, like Scancell, I think this penny stock’s still worth serious attention today.

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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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