3 rising penny stocks I’d buy with £500 each

These three penny stocks have all risen in value in recent weeks. Here’s why I’d buy them despite the increasingly murky economic picture.

| 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.

UK share prices are (broadly speaking at least) under severe pressure right now. Rising tension over soaring inflation have served to push many British stocks firmly to the downside, from FTSE 100 goliaths to the smallest penny stocks.

There have been rare causes for cheer, however. The following penny stocks, for example, have all risen  in value over the past month. Here are three I’d spend £500 on each right now.

More forecast-beating trading news

The HSS Hire Group (LSE: HSS) share price has risen 9% during the past month. This means that in the last 12 months it’s gained 28% in value. The business hires out tools and construction equipment and is thus highly cyclical. Yet the strength of trading here has allowed its share price to rise despite fears over the British economy. The penny stock hiked its earnings expectations yet again in half-year financials released last month.

Trading at HSS Hire would likely cool again if soaring inflation chokes off the economic recovery. But the business has made huge strides to improve its balance sheet, which should help cushion it against any fresh trading problems. The sale of its All Seasons Hire division last month has pulled its leverage down to just 1x. Its improving financial position will also help it to execute its long-term growth plans.

Sporting great

Science in Sport (LSE: SIS) is also managing to defy the broader gloom enveloping UK share markets. The protein shake manufacturer has risen 2% in value over the past month, taking total 12-month gains to 111%. Sales of its products are booming as consumers’ fitness focus boosts demand for its nutritional products. Revenues at the penny stock jumped 24% in the six months to June, financials last month showed. And encouragingly, new product innovations made up a quarter of this total.

The sports supplement market is one that looks set for further stratospheric growth too. Analysts at Grand View Research think it will be worth $34.5bn by 2028, more than double its size today. I think Science in Sport is a great way to ride this phenomenon despite the threat of intense competition to future sales.

Another penny stock on a roll

Like Science in Sport, Finsbury Food Group (LSE: FIF) has also risen 2% in the last month. Consequently the bread, cake and morning goods manufacturer is up 71% on a 12-month basis. I think its role in a defensive sector (we need to eat regardless of economic conditions, right?) makes it a top buy for these uncertain times.

As a long-term investor, I’m excited by the impressive progress Finsbury Food is making on foreign shores. Sales outside the UK account for just 12% of the group total today. But the rate at which they’re growing demands serious attention. Up 13.4% in the 12 months to June, this was far better than the 1% increase reported on home turf. I’d buy this penny stock despite the threat that rising Covid-19 cases poses to its foodservice business.

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.

More on Investing Articles

Young Woman Drives Car With Dog in Back Seat
Investing Articles

This unloved UK stock could rise 120%, according to a City broker

Some City analysts reckon a once-popular UK stock can recover from its massive recent decline and go on to more…

Read more »

Investing Articles

These FTSE dividend shares all offer 6%+ yields!

Paul Summers highlights three FTSE dividend shares that offer big yields. But is the passive income stream sufficient to offset…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

Is Legal & General Group one of the FTSE 100’s greatest value shares?

Legal & General shares boast low P/E ratios and massive dividend yields. Could they be one of the London stock…

Read more »

Front view photo of a woman using digital tablet in London
Investing Articles

I’m looking for the best FTSE 100 value stocks to buy now. Have I found them?

Barclays, NatWest, and Imperial Brands shares are recovering strongly. But these FTSE 100 stocks still trade on rock-bottom earnings multiples.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Where on earth will Nio stock be in 1 year?

Nio stock has demonstrated extraordinary volatility over the past 12 months, but where will it be in a year's time?…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

6.9% dividend yield! 2 cheap stocks to consider for a £1,380 passive income

Looking for a market-beating passive income? These FTSE 100 and FTSE 250 dividend stocks could provide a healthy second income…

Read more »

Mature black couple enjoying shopping together in UK high street
Investing Articles

Potentially 34% undervalued, should I be watching the boohoo share price?

The boohoo share price has seen a rocky few years, but with signs that the economy is improving, could this…

Read more »

Investing Articles

Is the Amazon share price primed for a drop?

The Amazon share price has been on a tear for the last year, but can this trend continue? Gordon Best…

Read more »