Could these low-cost UK shares be too good to miss? Here’s why I’m thinking of buying these top penny stocks for my own portfolio today.
Investing in UK-focussed cyclical shares is undoubtedly — at least on a general level — a risky endeavour as British GDP slows. There are however pockets of top stocks I think could still thrive this year. Staffline Group (LSE: STAF) is one of these that I’m considering buying: it’s a penny stock which provides recruitment and training services for companies.
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There’s a raft of data showing that 2022 will be a big year for job migration. The number of people seeking to further their careers following the Covid-19 shock, or who are seeking a better work/life balance, is tipped to continue soaring. A fresh survey this week shows that more than half of Britons are considering quitting their job this year. It seems like vacancy fillers such as Staffline could be extremely busy.
A strong recent trading update from industry rival Hays has bolstered my confidence in Staffline for 2022. It said that its net fees were up 33% in the final three months of last year, with fees for permanent hiring leaping 69% year-on-year thanks to strong business confidence.
Bear in mind, though, that Staffline isn’t completely immune to broader economic conditions. Individuals could choose to stay put and firms could put off hiring if the economy worsens significantly and confidence sinks.
Ready to fly
Raven Property Group (LSE: RAV) is a UK share that commands a meaty premium today. For 2022 the company — which specialises in letting out warehousing and logistics properties in Russia — trades on a forward P/E ratio of 32 times.
This sort of sky high valuation reflects investor expectations of strong earnings growth. But it also leaves Raven Property’s share price in jeopardy of a sharp fall if these profits hopes start to look a tad shaky. For example, a shortage of suitable assets for Raven Property to acquire could see the business struggle to make progress on its growth strategy. The property company has previously made reference to “strong competition” in Moscow, for instance.
This doesn’t mean I couldn’t be tempted to buy Raven Property for my portfolio, though. Indeed, the pace at which Russia’s e-commerce market is growing still makes it an attractive buy despite that premium.
Researchers at Statista think the country’s online shopping sector will be worth $69.8bn by 2025, up more than $28bn from what the body thinks it will be valued at this year. In this climate Raven Property can expect demand for its properties to heat up.
One final thing: at current prices Raven Property offers up a meaty 5.1% dividend yield. This beats the broader 3.5% average for UK shares by a large margin and reinforces its appeal to me. I think it could be a great penny stock for me to buy and hold for the long haul.