3 penny stocks to buy in November

I’m searching for the best low-cost UK shares to buy for my investment portfolio. Here are three penny stocks I’m thinking of snapping up next month.

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British Pennies on a Pound Note

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The intensifying drive by lawmakers to slash car emissions bodes well for Jubilee Metals (LSE: JLP). The platinum group metals (PGMs) it produces are critical components in catalytic converters where they are deployed to reduce harmful gases.

Legislative changes across developed and emerging markets require higher loadings of these metals in car exhaust systems. The escalating climate emergency means that regulations could become even tighter too.

PGM production at Jubilee is soaring (up 23% year-on-year in the first six months of 2021). And the company’s investing heavily in its operations like expansion of the Inyoni PGM facility to boost long-term output.

It’s important to remember that raw materials production is highly complex business. Costs can balloon and output levels can disappoint, dealing a huge blow to profits. Still, in my opinion, this South African mining giant’s risk-to-reward profile is highly attractive.

A model penny stock

The surging number of hobbyists during recent Covid-19 lockdowns makes Hornby (LSE: HRN) an attractive penny stock to buy today. In fact, soaring demand of its miniature railways and model kits from people in lockdown gave the company’s recovery from the travails of previous years a serious boost.

Indeed, Hornby’s latest financial statement last month indicated that “our outstanding order book is very strong and substantially higher than a year ago.” Okay, the company’s rebound might be blown off course by supply chain problems and a weakening of consumer confidence.

However, I find the thumping brand strength of products such as Corgi die-cast miniature cars, Scalextric slot car racing packs and its own-brand railway kits extremely reassuring, a quality that should help it to ride the worst of these problems. I expect them to remain hugely popular with hobbyists for decades to come.

Making money with the housing market

The shortage of new homes entering the market in Britain represents plenty of opportunity for UK share investors. I own stakes in Barratt Developments and Taylor Wimpey. They’ve made me solid returns as supply and demand imbalances have pushed property prices through the roof (no pun intended). But I also have an opportunity to play the favourable Irish residential property market with London-listed stocks. Cairn Homes (LSE: CRN) is one such share I’d buy today.

This Dublin-based business said last month that “demand for new Cairn homes, across all price points from entry level starter homes to trade-up/down, has never been stronger.” Cairn Homes, which is taking steps to build 2,500 new homes a year by 2022 to exploit this trend, saw revenues rocket 61% in the first six months of this year.

While the penny stock’s profits could be hit by soaring building products costs, I’m encouraged by news that house price inflation continues to outstrip the rate at which raw materials are rising in price. I’d happily buy Cairn alongside Hornby and Jubilee Metals in November.

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 considered so you should consider taking independent financial advice.

Royston Wild owns shares of Barratt Developments and Taylor Wimpey. 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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