£10,000 to invest! 2 top penny stocks to buy right now

Buying penny stocks can be a great way to turbocharge the growth potential of an investor’s portfolio. These two low-cost UK shares have caught my attention.

| 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.

sdf

I think now is a great time to shop for penny stocks. Even as the economic landscape worsens, there are great shares out there I think should still deliver excellent returns.

Here are two top penny stocks I’d happily spend £10k on right now. Each costs less than £1 to buy. And both have a market capitalisation of below £100m.

Alternative Income REIT

Price: 84.2p per share
Market-cap: £68.1m

I think buying property stocks could be a good idea during this period of high inflation. I also believe investing in Alternative Income REIT (LSE: AIRE) in particular could be an effective way for me to go about this.

Real estate businesses are a classic safe-haven when prices are rising sharply. The underlying assets of property shares tend to rise in value in inflationary environments. So do the rents they charge tenants, keeping revenues rising nicely.

I like Alternative Income because of its status as a real estate investment trust (REIT). This means at least 90% of annual profits must be distributed to investors by way of dividends. As a consequence, dividends often come in on the big side, which can greatly reduce the impact of inflation on my wealth.

This investment trust isn’t exactly immune to these difficult economic conditions. Some of its tenants like retailers and industrial firms could suffer as broader consumer spending slumps. Still, I think the company’s large exposure to stable sectors like healthcare, education and utilities helps reduce the danger this poses to profits.

Savannah Resources

Price: 4.1p per share
Market-cap: £70.9m

Savannah Resources (LSE: SAV) could be a great way for me to make big money from the electric vehicle (EV) boom of the next decade.

It owns the Barroso lithium spodumene project in Portugal, an asset which could play a critical role in the EV battery supply chain. Barroso contains some 27 million tonnes of lithium, making it the largest lithium mine in Western Europe.

Savannah applied for environmental approval at Barroso more than two years ago. But it is still waiting for Portuguese authorities to give the go-ahead for work to begin. The business remains a long way from initial production and its balance sheet may need reinforcing if it doesn’t start mining soon. This could come by placing more shares or by raising debt.

This is a normal part of investing in smaller mining companies however. And, in my opinion, the potentially-colossal benefits of owning this lithium stock still make it an attractive buy.

Analysts at Statista think global lithium demand will hit 2.1m tonnes by 2030 as EV sales explode. That compares with 559,000 tonnes it predicts for 2022. The prices that Savannah charges for its lithium could be exceptionally strong too if, as many predict, material shortages develop towards the end of the decade.


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

Businessman with tablet, waiting at the train station platform
Investing Articles

Consider these 3 FTSE 100 and FTSE 250 shares for long-term rewards!

The UK stock market is packed with long-term investment potential. Here are three top shares to consider, including one from…

Read more »

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

£10,000 invested in Santander shares 5 years ago is now worth…

Our writer digs into surging Santander shares to see whether they might be a good fit for his passive income…

Read more »

Close-up as a woman counts out modern British banknotes.
Investing Articles

Low P/E ratios and 6%+ dividend yields! Could these FTSE 100 shares be irresistible?

These FTSE 100 shares look highly discounted at today's prices. Does this make them brilliant bargains or possible investor traps?

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

With a 30% increase since the start of the year, does the Barclays share price still offer good value?

In light of an impressive Barclays share price rally, our writer considers the attractiveness of the bank’s stock relative to…

Read more »

British coins and bank notes scattered on a surface
Investing Articles

How much passive income could we earn from UK shares with just £10 per day?

Even with modest amounts of money to invest, we can still consider investing in the UK stock market to generate…

Read more »

Night Takeoff Of The American Space Shuttle
Investing Articles

3 booming growth shares in the Scottish Mortgage portfolio

Our writer highlights a diverse trio of red-hot shares from the portfolio of Scottish Mortgage Investment Trust. Are any worth…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

2 growth stocks absolutely smashing the FTSE 100

If you think the wider FTSE 100 is having a good year (and it is), check out the gains holders…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

FTSE 100: next stop 10,000?

As the FTSE 100 briefly hits 9,000 points, investors are already looking forward to when the next 1,000-point level might…

Read more »