2 lesser-known penny stocks to buy now and hold for 10 years!

I’m currently looking at penny stocks that could help my portfolio grow over the next 10 years. Despite recent volatility, now might be a good time to buy.

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Penny stocks are typically much smaller companies, and as the name suggests, trade in pennies rather than pounds.

Some giants of the stock market do trade in pennies. Just look at Rolls-Royce and Lloyds. However these firms are not typically considered penny stocks, given their market caps, even though you can buy them for pennies.

Owing to their small market caps, true penny stocks are often more volatile than other companies on the stock market. They are also thinly traded and normally have considerable spreads between the buying and selling prices.

Penny stocks can be a good place to look for young firms with high growth potential. So today, I’m looking at two penny stocks that I’d buy today and hold for a decade.

Inland Homes

Inland Homes (LSE:INL), as the name suggests, is a UK housebuilder. Its share price has been on a downward trend over the past year, despite a very strong housing market.

In fact, it’s down nearly 50% over the past 12 months. However, it’s also down a whopping 23% over the past five days. There are several reasons for this.

The company is heavily indebted and reported another loss in late June. It posted a pre-tax loss of £8.2m for the six months ending 31 March last Thursday, against a loss of £5.8m a year ago. 

However, there were some positive signs. Revenue rose and net debt fell to £96.2m versus £132.9m at the same point last year. Net assets also grew, standing at £174m.

On Monday the company also announced a £21m land sale to a build-to-rent developer. Inland Homes is working to bring its debt to more manageable levels.

Despite the near-term challenges posed by rising interest rates and the cost-of-living crisis, I’m particularly positive on the long-term prospects of the housing industry. As such, I’d buy this stock on its long-term prospects.

Kropz

Kropz (LSE:KRPZ) is an Africa-focused mining company that may play an important role in the food industry in the decades to come.

Kropz took control of the Elandsfontein phosphate project, in South Africa’s Western Cape province, back in 2010. The company created its business model having noted that while there was rising food demand around the world, fertiliser usage remained low in Sub-Saharan Africa.

The firm mines for rock phosphate — the raw material that’s used to produce phosphate fertilisers — in Africa. And this definitely looks like a good business to be in right now as fertiliser prices go sky-high. In fact, 85% rock phosphate is used in fertiliser production.

Kropz hopes to produce rock phosphate from its Elandsfontein mine later this year. However, it has already been forced to push back its first bulk sale.

The AIM-listed miner also owns the Hinda rock phosphate asset in Republic of Congo. The asset could be “one of the world’s largest undeveloped sedimentary-hosted phosphate reserves,” according to the group.

Getting production going is perhaps the biggest issue for this company. First production will likely ease investors’ nerves.

At today’s price, I’d buy Kropz stock and hold it for the long run.

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.

James Fox owns shares in Rolls-Royce and Lloyds. The Motley Fool UK has recommended Inland Homes and Lloyds Banking Group. 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.

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