I’m on a quest to find the best stocks to buy in April. Here are three that have caught my attention following recent share price falls.
#1: Central Asia Metals
I’ve recently tipped penny stock Steppe Cement as a top stock to buy because of its pivotal role in Kazakhstan’s urbanisation programme. Demand for the building material is likely to surge as construction in towns and cities picks up. For the same reason I’d buy Central Asia Metals (LSE: CAML), too, a copper miner in the transcontinental country.
Thanks to its high conductivity, malleability and resistance to disintegration copper is a popular material in the construction industry. And Central Asia Metals pulls this red metal from its Kounrad project in Kazakhstan, putting the business on the doorstep of this urban revolution.
Riding the electric vehicle craze
I also like Central Asia Metals because it’s a great way to play another twenty-first-century phenomenon: the electric vehicle (EV) boom. Copper demand is exploding as adoption of these low-emissions vehicles takes off. But this is not the only way Central Asia Metals is exploting the EV market. It can expect the zinc and lead it pulls from the Sosa mine in North Macedonia to soar as well. These materials are essential in the manufacture of car batteries.
Central Asia Metals is packed with potential, then. However, it’s also not without risks and any production problems at its Asian and European operations could hit profits hard. It’s also worth noting that political instability has risen in Kazakhstan in recent months and could ignite again at any moment.
Disruption to Central Asia Metals’ operations could follow, whilst fresh turbulence could hit construction activity in the country too and consequently demand for the miner’s metal. That being said, as things stand right now I think the rewards of owning this stock outweigh the risks.
#2: Ediston Property Investment Company
Inflation is heading through the roof and is something I as a share investor need to be prepared for. The tragic war in Ukraine has supercharged already-elevated levels of inflation in the UK as supply chain issues have worsened. The stalemate in Eastern Europe has raised the prospect that extreme price rises could persist too.
Reflecting this chilly outlook the Bank of England now warns that inflation here could beat its prior forecast of 7.25% by “several percentage points”. So I’m considering adding Ediston Property Investment Company (LSE: EPIC) to my portfolio. Property stocks have long proven to be a great hedge against inflation as the rents they charge tend to rise in line with broader prices.
Playing the retail revolution
I wouldn’t just buy this penny stock to protect me from the ravages of inflation, though. I think it’s a great way to capitalise on the changing way that we do our shopping in the post-pandemic age. You see Ediston operates retail parks up and down the country. The large shopping units these are home to are becoming increasingly popular as people prefer spacious shopping outlets over cramped high streets.
Retail parks also play a critical role in the online shopping industry, a quality that Savills says is attracting brands to consider their expansion in these retail destinations. The estate agency says that
“[these] large and comparatively low-rented units, combined with good car parking provision and accessibility means that retail park assets are suitable for servicing click-and-collect orders, customer returns and home deliveries.” Savills adds that this means shopping parks are essentially “functioning as last-mile fulfilment centres.”
A dirt-cheap penny stock
The Ediston share price has slumped despite that aforementioned boost that inflation will provide to its rent rolls. This fall is due primarily to fears that the cost of living crisis could hit its tenants hard, in turn prompting requests for rent reductions and resulting in empty lots as retailers go bust.
However, I think the scale of recent selling is over the top. At 78p per share the property giant is trading at an 11% discount from January’s two-year closing highs. I think this represents a juicy dip buying opportunity for me.
#3: Springfield Properties
A stream of positive trading updates have continued to flow in from Britain’s listed housebuilders. A number of encouraging home price reports have also flowed in, suggesting that Britain’s housing market remains rock solid since the turn of 2022. This makes me believe that ‘nearly’ penny stock Springfield Properties (LSE: SPR) remains an attractive buy.
In fact Scottish housebuilder Springfield (which trades at 146p) may be one of the savviest ways to play the housing market. This is because residential property prices north of the border are rising particularly quickly. Latest HM Land Registry data showed average prices in Scotland rise 11.2% year-on-year in December. That’s around half a percentage point higher than the UK average.
Record order books
The strength of market conditions can be seen in Springfield Properties’ private housing order book. This rose to record levels at the end of 2021.
The business is taking aggressive steps to capitalise on the favourable marketplace, too, and it recently entered the thriving private rented sector. Furthermore, Springfield also remains committed to expansion through acquisitions and in recent months snapped up Highlands-focussed developer Tulloch Homes for £56.4m.
I think the main danger facing housebuilders is that of raw materials shortages. It’s a problem that could send costs through the roof and even disrupt its construction plans. However, as of right now house price inflation continues to outpace the rate at which building product prices are increasing. And whilst I can’t be sure, I expect this to remain the case long into the future. So I’d happily buy Springfield Properties for my portfolio this April.
