I’m searching for the best penny stocks to buy for 2022. And, right now, I’m paying Centaur Media (LSE: CAU) very close attention. City analysts believe that annual earnings here will soar 123% next year. This leaves the company trading on a very-low forward price-to-earnings growth (PEG) ratio of 0.2.
Centaur Media provides corporate information and marketing services to businesses. It also runs events. This means it’s well-placed to exploit the historical uptick in business investment that accompanies economic recoveries. Centaur Media is already riding the upturn impressively and it said last week that results for 2021 should be at the top end of expectations.
The media specialist will suffer if the Covid-19 crisis suddenly worsens. Advertising budgets could be scaled back and its events business might be mothballed again if lockdown restrictions return. That said, I think these dangers are baked into Centaur’s mega-low valuation, so I’d still buy it.
Another delicious penny stock on my radar
DP Eurasia (LSE: DPEU) is another dirt-cheap UK share tipped for explosive earnings growth in 2022. City analysts think annual profits will detonate more than 320% year-on-year. This leaves the company trading on a PEG ratio 0.1. Remember, a reading below 1 suggests a stock is undervalued.
DP Eurasia is the master franchisee of the Domino’s Pizza takeaway business in Turkey, Russia, Georgia and Azerbaijan. These are regions witnessing soaring demand for food delivery as personal income levels rise. Its latest financials showed revenues leap 58.3% between January and June, a result so strong the business hiked its earnings forecasts for 2021.
Industry experts think takeaway sales in these regions will keep rocketing too. Statista, for example, think revenues will grow at a compound annual growth rate of 10.2% through to 2025. I’d buy DP Eurasia to ride this trend, even though it faces intensifying competition from fast-growing local players.
Now, Sportech (LSE: SPO) doesn’t offer the same sort of eye-popping value as DP Eurasia. In fact, it trades on a pretty toppy price-to-earnings (P/E) ratio of 75 times for 2022. However, I think this big valuation could be considered fair given the huge opportunities it has in the US.
Sportech provides technology to gambling operators and lottery organisers. It also owns and operates around a dozen gaming and sports venues in Connecticut, alongside digital betting services. It’s had problems in days gone by securing a sports betting licence but it now seems to have turned the page after inking a 10-year deal with the Connecticut Lottery Corporation in August. It’s why City brokers are expecting the penny stock to break back into the black in 2022, following three years of consecutive losses.
Regulations on gambling in the US have eased significantly. This provides companies like Sportech with exceptional profits potential. Of course, future law changes in this highly-regulated market could have an adverse effect on Sportech and send its share price plummeting. But, today, I think Sportech’s growth outlook is pretty exciting.
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.