Market volatility continues to reign supreme on Friday. From the biggest multinational companies to the most modest penny stocks, UK shares of all shapes and sizes are sinking sharply.
As a long-term investor I don’t think I need to be overly concerned with current market volatility, anyway. Sure, the sharp falls in UK share prices more recently could take a bite out of my final returns. But I’m convinced that the value of my investments will rebound strongly. On a longer timescale I believe that history is on my side.
Investing like Warren Buffett
So I won’t be selling my shares in light of recent market volatility. In fact I’m looking for some top bargains to buy following the fresh share price falls today. I plan to follow the strategy of billionaire investor Warren Buffett when stock prices come crashing down. He famously claimed that one should “be fearful when others are greedy, and greedy when others are fearful.” This way I have the chance to make some robust returns when the market eventually rebounds.
Here is one top penny stock I’m thinking of buying following recent share price falls.
A top electric vehicle stock
Vertu Motors (LSE: VTU) doesn’t make low-carbon vehicles or the parts that help them run. But its role as a major auto retailer in the UK still makes it top electric vehicle stock to buy in my book.
Strong demand for these greener cars helped Vertu’s like-for-like sales rise 9.4% in the five months to January, latest financials show. And data from the Society of Motor Manufacturers and Traders (SMMT) today shows that the popularity of electric vehicles has continued to soar since then.
Sales of battery, hybrid and plug-in hybrid vehicles rocketed 123% year-on-year in February. This was higher than the 92.5% rise recorded in January, the SMMT said, a period when car showrooms were also affected by Covid-19 lockdowns.
A dirt-cheap penny stock I’d buy
As concerns over the environment grow, people are switching from their old petrol and diesel vehicles to battery- and hybrid-powered vehicles in huge numbers. And lawmakers are aggressively acting to speed up adoption of these greener cars too. The Mayor of London, for example, is reported to be planning to turn the whole of London into an ultra-low emissions zone. This all bodes well for Vertu Motors and its industry rivals.
My main concern with Vertu Motors is how soaring inflation could hit profits in the nearer term. Demand for its big-ticket items could come under severe pressure as consumer spending power crumbles.
Still, this is a risk I’d be prepared to take given the cheapness of the shares. The penny stock has fallen 17% in value since the start of 2022. This leaves the business trading on a forward price-to-earnings (P/E) ratio of just 9.6 times, below the bargain benchmark of 10 times. I think this is a great UK share to buy to capitalise on the green revolution.
