£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.

Man using credit card and smartphone for purchasing goods online.

Image source: Getty Images

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 considered so you should 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

Mixed-race female couple enjoying themselves on a walk
Investing Articles

UK shares: 1 burgeoning tech stock to buy for returns and long-term growth!

Jabran Khan is looking for the best UK shares to buy for his holdings that provide excellent returns and growth…

Read more »

Black father holding daughter in a field of cows
Investing Articles

2 FTSE 100 shares I’d buy for lifelong passive income!

These FTSE 100 shares have proved to be excellent dividend stocks for many years. Here's why I think they'll continue…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

1 cheap penny stock that boosts passive income and has great growth prospects!

This Fool likes this penny stock that currently looks good value for money, has an enticing dividend yield, and growth…

Read more »

Sun setting over a traditional British neighbourhood.
Investing Articles

Will the Taylor Wimpey share price rebound soon?

The Taylor Wimpey share price has jumped 10% since it bottomed last month. But will it continue its rally and…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Should I buy this growth stock at £10?

The ASOS share price has tumbled to its lowest price in the last 10 years. Surely at £10 per share,…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Is the bear market in stocks over? I fear not!

After the worst first-half bear market in 52 years, US stocks have rebounded in the past month. But what should…

Read more »

Happy male couple looking at a laptop screen together
Investing Articles

Is this FTSE 250 stock one of the best to buy for consistent growth and returns?

Jabran Khan takes a look at whether this FTSE 250 tech stock could be a good addition to his portfolio…

Read more »

Girl and father putting coin into piggy bank, sitting on sofa at home
Investing Articles

Here’s why I’d buy Legal & General shares to bag 7.5% dividends today

Legal & General shares are picking up, as the company reaches the halfway stage in its five-year cash and dividend…

Read more »