I think these three penny stocks could deliver exceptional returns over the next decade. Here is why I would buy them for my shares portfolio right now.
A penny stock for the pandemic
Soaring Covid-19 cases means investing in medical testing companies could be a very good idea. EKF Diagnostics (LSE: EKF) is a share that has been on my radar long before the Omicron variant sent infection rates spiralling again. Medical experts think that coronavirus could be around forever, even when the current pandemic has passed. Therefore, the market for virus-detection kits could remain highly lucrative.
EKF Diagnostics not only manufactures antibody tests. It also makes kits that allow samples to be safely collected, transported and handled. All of these products will remain in high demand for some years yet as governments prioritise individual testing over mass lockdowns so as not to disrupt the economic recovery.
I’d buy EKF to capitalise on this theme, even though competition in the testing space is intensifying.
Riding the copper train
I think getting exposure to some classic commodities stocks is an attractive prospect too. Inflation is widely tipped to get worse in 2022, as energy prices increase and rising Covid-19 cases exacerbate supply chain problems. Raw materials like copper tend to rise in value when prices are accelerating, history shows us.
Phoenix Copper (LSE: PHX) is a penny stock I’m considering buying to protect myself from the inflationary threat. To recap, Phoenix is developing the Empire red metal mine in Idaho with a view to recording first production towards the end of 2022.
I wouldn’t just buy the mining stock for near-term security though. I think demand for its highly-conductive metal could soar as electric vehicle (EV) sales take off. Sales of these low-carbon vehicles in China — the world’s largest market for low-emission vehicles — rocketed 18% month-on-month in November, according to Bloomberg. But mining delays or slowing EV sales could still dent the stock’s prospects.
Another top housing stock
I’m capitalising on soaring home prices with my Barratt Developments and Taylor Wimpey shares. But the rocketing cost of buying residential property isn’t a UK-only problem, of course. I’m thinking of buying Glenveagh Properties (LSE: GLV) shares to play the favourable Irish housing market and give my portfolio a little added geographic diversification in the process.
House prices in Ireland are going from strength to strength. Latest data from the country’s Central Statistics Office showed average property prices rose 13.5% in October. This was the highest year-on-year increase since the summer of 2015.
Encouragingly for Glenveagh investors, the company is increasing production to make the most of this opportunity. The penny stock has plans to put up 3,000 new homes each year by 2024. My main concern for construction stocks like this is building materials are becoming scarce. This could make it more expensive for the business to build and could even derail the firm’s productions.
That said, the rate at which house prices are rising still makes Glenveagh a top buy, in my book.
