2 penny stocks I’d buy with my last £1,000!

I’m on the lookout for the best low-cost growth shares to buy. Here are two penny stocks with great momentum I think could be too good to miss.

| 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.

Hand holding pound notes

Image source: Getty Images.

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.

The high-profile problems at The Works illustrates the growing importance of having robust cyber security systems. And it’s underlined the investment appeal of firms like penny stock Corero Network Security (LSE: CNS).

The Works said on Tuesday that “unauthorised access to its computer systems” had caused trading and operating chaos. Some of its stores were forced to close and shop deliveries halted.

The problem of cyber attacks worsened considerably during Covid-19 lockdowns. And it’s expected to keep growing strongly as the world becomes more digitalised.

Soaring sales

With a market cap of just £63m Corero Network Security doesn’t have the clout of the industry’s major players. It will have to work extremely hard then to succeed in this ultra-competitive sector.

But I’m impressed by the rate at which Corero is winning business. The tech giant added 44 new customers in 2021 and saw revenues soar 24% year-on-year. It said in January that its “strong momentum” has continued into 2022 too and that it is investing additional resources this year to bolster growth.

Worth the price

It’s important to know that Corero shares look expensive today. At around 12.75p the penny stock trades on a forward price-to-earnings (P/E) ratio of 141 times.

This is the kind of sky-high rating that might prompt a share price correction if company news flow begins to disappoint. For example if those competitive pressures start to hit revenues growth.

Still, it’s my opinion that Corero’s solid momentum — tied with the rate at which the cyber security market is tipped to keep growing — means that a premium share price is warranted.

Another great penny stock

Getting exposure to the housebuilding sector is another good investment idea today. Property prices continue to soar and Brickability Group (LSE: BRCK) could be a good way to exploit this phenomenon.

As you can probably gather Brickability makes the products that are essential in home construction. Many housebuilders are supercharging build rates as demand continues to exceed supply. A steady stream of positive industry data leads me to think that they’ll remain super busy on the construction front too.

Halifax data today shows average house prices up 11% year-on-year in March. A new record high of £282,753 was also up 1.4% from February, the largest on-month increase for six months.

A dirt-cheap UK share

Of course firms like Brickability could be hit by incoming interest rate rises in 2022. The Bank of England is tipped to step up rate hikes in what could be a blow to buyer affordability.

But so far rate rises and the increasing cost of living is failing to cool the British housing market. And besides, I think Brickability’s dirt-cheap share price reflects this threat.

At 93.5p per share the brickmaker carries a forward price-to-earnings growth (PEG) ratio of 0.3. This is well below the widely-regarded bargain watermark of 1. I’d happily buy Brickability alongside Corero Network Security right now.

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

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Looking for value stocks? Here’s 1 I’d buy and 1 I’d avoid!

This Fool delves deeper into two value stocks she’s had her eye on and explains why she’s bullish on one,…

Read more »

Young black woman using a mobile phone in a transport facility
Investing Articles

With the Airtel Africa share price in pennies, is it a bargain?

With the Airtel Africa share price having slumped by a quarter in just one month, this shareholder considers some of…

Read more »

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

Are these 2 defensive FTSE 100 stocks shrewd buys after recent updates?

This Fool takes a closer look at these FTSE 100 stocks. She admires their defensive traits -- but does that…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

The FTSE 100 closes up after full-year results from leading UK firms – are they buys?

Earnings season brings about a lot of ups and downs for the FTSE 100. Yesterday had some particularly good releases,…

Read more »

artificial intelligence investing algorithms
Investing Articles

Should I buy NVIDIA stock as a British investor?

NVIDIA stock is up two-thirds this year alone. Our writer considers some pros and cons, specifically given that he is…

Read more »

Investing Articles

With £2,000 in excess savings, I’d buy 41 shares in this Warren Buffett dividend stock

Stephen Wright thinks one of the best dividend shares to buy right now might be a Warren Buffett stock that’s…

Read more »

Investing Articles

How many Aviva shares do I need to collect a £100 monthly income?

Aviva shares are well suited for passive income purposes. Our writer works out how many would be needed for a…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

£2k to invest? I’d buy 883 shares of this overlooked dividend giant for a second income

This FTSE 100 dividend stock has had a mixed time since floating in 2019 but it looks like a brilliant…

Read more »