3 penny stocks to buy with £1,000

I’m searching for the best UK penny stocks to add to my investment portfolio. Here are three ultra-cheap shares I’d snap up right now.

| 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.

A person holding onto a fan of twenty pound notes

Image source: Getty Images.

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.

Shopping for penny stocks allows me to dig up gems that other risk-averse investors have missed. Providing you’re willing to accept the possibility of some share price turbulence and do some extra research, I think buying low-cost stocks like this could be a good way to build a winning portfolio.

Here are three top-quality penny stocks on my radar today. With £1,000 in my pocket this is why I’d buy them for my investment portfolio.

Playing the property boom

Trading at OnTheMarket (LSE: OTMP) has exceeded analyst expectations in recent times. The business — which operates the OnTheMarket.com property listings website — is thriving as demand for residential properties soars in the UK. Revenues at the business rocketed 46% year-on-year in the six months to June.

A mix of favourable lending conditions and support for first-time buyers has persisted, and last month the average price rose above £250,000 for the first time, according to Nationwide. I expect homebuyer demand to remain strong in the short-to-medium term too, in spite of upcoming Bank of England interest rate hikes. I’d buy OnTheMarket to exploit this theme, even though listings giants Zoopla and Rightmove pose a significant competitive threat.

Turkish delight

Gold miner Ariana Resources (LSE: ARR) first came to my attention last year when it released a stream of positive exploration updates. Since then, news on its drilling programmes at its assets in Turkey, as well as from the assets of other Eastern Mediterranean mining companies in which it holds stakes, have remained extremely encouraging.

For example, latest drilling action from Venus Minerals in late October — in which Ariana’s stake could rise to 50% as part of an earn-in agreement — revealed that the Kokkinoyia sector at the Magellan gold and zinc project in Cyprus is “significantly more exciting deposit than initially thought.”

While a falling gold price could hit Ariana’s bottom line hard, I still think this penny stock is a great way to get exposure to the safe-haven precious metal.

A penny stock with ambitious plans 

Budget greetings card retailer Card Factory (LSE: CARD) has ambitious plans to turbocharge revenues over the next five years. It plans to generate sales of £600m by financial 2026, up from the current peak of £451.5m recorded in 2020.

I think the business could make a decent fist of reaching this target for a couple of reasons. Firstly, it’s investing heavily in its digital operations to fully exploit the explosion in e-commerce. Secondly, value retail is tipped to be one of the megatrends of the decade as consumers demand more bang for their bucks.

Card Factory might not have things all its own way, of course. Online-only operators like Moonpig could provide a challenge to its growth target. So could fellow low-cost retailers like Cards Direct. But by offering the twin benefits of value and online I still think the penny stock could deliver impressive profits growth.

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 recommended Card Factory and Rightmove. 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

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

With an 8% dividend yield, I think this undervalued FTSE stock is a no-brainer buy

With an impressive yield and good track record of payments, Mark David Hartley is considering adding this promising FTSE share…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,500 in savings? Here’s how I’d try to turn that into £1,809 a month of passive income

Investing a relatively small amount into high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

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

Dividend star Legal & General’s share price is still marked down, so should I buy more?

Legal & General’s share price looks very undervalued against its peers. But it pays an 8%+ dividend yield, and has…

Read more »

Investing Articles

Dividend shares: 1 FTSE 100 stock to consider buying for chunky shareholder income

This company’s ‘clean’ dividend record looks attractive to me and I’d consider buying some of the shares to hold long…

Read more »

Investing Articles

3 of my top FTSE 250 stocks to consider buying before April

Buying undervalued UK shares can be a great way to generate long-term wealth. Here, Royston Wild reveals a handful on…

Read more »

Ice cube tray filled with ice cubes and three loose ice cubes against dark wood.
Investing Articles

Just released: our 3 top income-focused stocks to buy before April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

Is this the best chance to buy cheap FTSE 100 shares in a generation?

I want to buy shares when they're cheap, and sell... never, just keep taking the dividends. And the FTSE 100…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Could NatWest shares be 2024’s number one buy for passive income?

For those of us looking to earn some long-term passive income, how does NatWest's 7% dividend yield sound? It sounds…

Read more »