Dirt-cheap UK shares! 3 sinking penny stocks to buy today

I’m looking for the best low-cost British stocks to buy following recent market volatility. Here are a few great penny stocks attracting my attention today.

| 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.

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.

I’m searching for the best cheap UK shares to buy following recent market volatility. There’s plenty of choice for value investors like me and today I’m searching for top-quality growth shares. With this in mind here are three great penny stocks I’d buy following recent share price weakness. Each trades on a rock-bottom forward price-to-earnings (P/E) ratio of below 10 times.


Severfield’s share price closed at its cheapest since November 2020 in recent days. And despite some light dip-buying, the fabricated steel manufacturer still looks mega cheap on paper. Severfield now trades on a P/E ratio of 9 times. It’s a reading I believe more than reflects the dangers it faces as soaring inflation and sanctions on Russia threaten the global economy.

You see, I think Severfield’s profits could rocket over the next decade as infrastructure spending heats up. The business sells it structural steel in Europe and in India, too, a market where urbanisation rates are soaring and wealth levels are increasing rapidly. Severfield’s steel is used in a wide variety of applications from bridges and train stations to hospitals and stadiums.

Pan African Resources

I think gold prices could continue to run higher as inflation rockets, the tragic events in Ukraine escalate, and Covid-19 cases rise sharply in parts of Europe and Asia. This is why I’d use Pan African Resources’ (LSE: PAF) fall from 14-month highs as a chance to invest (though its still up almost 40% on a five-year basis). Recent weakness leaves the South African gold producer trading on a prospective P/E ratio of just 6.3 times.

Bullion prices have retraced back below $2,000 per ounce following a recent surge towards new record highs. But many analysts are tipping a fresh charge as the macroeconomic and geopolitical landscape worsens, with some even predicting a rise to $3,000.

I’d buy Pan African Resources to try and capitalise on this opportunity. This is a risk though as asset prices prices can of course go up as well as down. Any appreciation in the US dollar, for instance, could pull precious metal prices lower and with it the share prices of mining shares like this.

Photo-Me International

Photo-Me International also trades on a rock-bottom earnings multiple today (in this case a figure of 7.7 times). This penny stock is perhaps best known for the photo booths found in shopping centres, train stations and other public places. It is therefore vulnerable to a fresh shock to the global travel industry that diminishing consumer spending power and rising aviation costs present. In this scenario, demand for passport photos would fall through the floor.

However, as a long-term investor I think Photo-Me’s an attractive buy at current prices. The business operates some 45,000 self-service machines across the globe. These include photo booth, washing machines and food vending machines. And demand for these sorts of technologies is tipped to soar due to changing consumer habits following the coronavirus and soaring retail staff costs. Allied Market Research thinks the self-service technology market will expand at a compound annual growth rate of 10.6% between 2021 and 2030.

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 no position in any of the shares mentioned. 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 senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

£20,000 in savings? Here’s how I’d aim for £14,710 a year in passive income

With spare savings, this Fool would start generating passive income for a more comfortable retirement. Here he details how he'd…

Read more »

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

£9,000 in savings? Here’s how I’d try to turn that into £581 a month of passive income

Relatively small investments in high-yielding stocks can grow through the power of dividend compounding into significant passive income.

Read more »

Photo of a man going through financial problems
Investing Articles

These are the FTSE’s biggest dogs over the last year!

The FTSE 100 has fallen far behind other major market indices over the past 12 months. However, these three sliding…

Read more »

Investing Articles

My top 3 stock market lessons from the Nvidia volcano eruption

Can we learn anything from the explosive rise in Nvidia's share price? Here are three Foolish reflections from this stock…

Read more »

Abstract 3d arrows with rocket
Investing Articles

Is boohoo the best near-penny stock to buy today?

This Fool asks why the boohoo share price has collapsed and whether now might be a good time to invest…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A brilliantly reliable FTSE 100 share I plan to never sell!

This FTSE-quoted share has raised dividends for more than 30 years on the spin! Here's why I plan to hold…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

This 7.7% yielding FTSE 250 stock is up 24% in a year! Have I missed the boat?

When a stock surges, sometimes it can be too late to buy shares and capitalise. Is that the case with…

Read more »

Investing Articles

£13,200 invested in this defensive stock bags me £1K of passive income!

Building a passive income stream is possible and this Fool breaks down one investment in a single stock that could…

Read more »