2 nearly penny stocks to buy before the Stocks and Shares ISA deadline!

I’m looking for UK shares to buy following recent market volatility. Here are two nearly penny stocks whose share prices today look mighty attractive.

| 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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

Recent market volatility gives me a chance to search for bargains before the Stocks and Shares ISA deadline. And right now I’m looking for some top companies that trade in and around penny stock territory. I think these top UK growth shares could help me make fantastic returns in the coming years.

A bolt from the blue

2022 has so far been a year to forget for Trifast’s (LSE: TRI) share price. The business — a giant in the manufacture of screws, bolts, and other types of fastenings — has plunged to within a whisker of penny stock territory. At 111p per share, it’s down 31% since January trading began.

I think this recent collapse makes Trifast’s share price hard to ignore. City analysts think the firm will follow a 78% earnings rise in this financial year (to March 2022) with a 27% year-on-year increase. This leaves Trifast trading on a forward price-to-earnings growth (PEG) ratio of 0.4 for the upcoming period. Any reading below one suggests that a UK share could be undervalued.

Trifast makes its products for a wide range of applications like consumer electronics, white goods, and automotive. It could therefore see sales slump if the cost of living crisis continues to worsen. However, as a long-term investor I find the business highly attractive. And I believe its share price today makes it something of a steal.

I like the fact that its end markets should grow strongly over the long haul on account of soaring emerging market wealth. I also like Trifast’s commitment to global expansion through acquisitions (in August it acquired US distributor Falcon Fastening Solutions for £6m to boost its North American footprint). And I think demand for the company’s fastenings could surge on the back of the electric car revolution too.

Another nearly penny stock I’d buy

I’d also use Greencore Group’s (LSE: GNC) plunge towards the 99p penny stock limit as an opportunity to buy. A forward price-to-earnings (P/E) ratio of 13.8 times doesn’t look shockingly cheap on paper. But recent market volatility has driven the food producers’ dividend yield through the roof. For 2022, the readout sits at a healthy 4.8%.

Any fresh pickup in the pandemic could threaten the recent recovery at Greencore. The food to go specialist saw revenues tank during Covid-19 lockdowns as people stayed at home. But as things stand, the outlook is pretty rosy for the business (City analysts think earnings here will rise 11% in 2022).

I’d buy Greencore because changing consumer habits mean the ‘food on the move’ marketplace is tipped to resume its strong growth of the last decade. Analysts at Mordor Intelligence think the ready-to-eat segment will expand at a compound annual growth rate of almost 5% between 2022 and 2027. And pleasingly Greencore is investing heavily to help it capitalise on this opportunity (it’s spending £30m to increase capacity at three of its manufacturing sites following recent contract wins). I think its plunge to 116p could make the company too cheap for me to miss.

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 Greencore. 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

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

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »