I don’t have a bottomless well of cash that I can use to invest in UK shares. But here’s a collection of top penny stocks I’d like to buy in 2023. I believe they could provide market-beating returns for decades.
Corero Network Security
Corero Network Security is a tiny operator in a highly competitive industry. It has neither the brand power nor the huge marketing and product development budgets of the likes of Microsoft.
Yet I still think it could deliver vast long-term rewards. This is thanks to the pace at which the cybersecurity market is growing on our increasingly digitalised planet. Research suggests the market will more than double in size between 2022 and 2029 alone, to be worth $376.3bn.
I’m encouraged by the pace at which Corero is making progress in this market too. In October, the firm predicted order intake will grow between 15% and 25% in 2022.
Michelmersh Brick Holdings
Brickmaker Michermersh’s products are much less high tech. But a likely ramping up in housebuilding activity means earnings here might also rise strongly in the years ahead.
The British government says 300,000 new homes are needed in the UK each year. This will be driven by a combination of steady population growth and, over the longer term, the impact of climate change on coastal areas.
Michelmersh could suffer in 2023 if the housing market sinks. But a healthy repair, maintenance and improvement (RMI) market could help reduce the impact of this on profits.
Shanta Gold Limited
Buying mining stocks can be a rough ride for investors. Problems with project exploration, mine development and mineral production can be common. And they can have a devastating impact on company earnings.
But on balance, I still think Shanta Gold is a top investment. The company has ambitious production plans and aims to increase output to 100,000 ounces in 2023 as its Singida mine in Tanzania comes online.
Drilling work elsewhere in East Africa underlines Shanta’s exciting investment case. Recent testing at its Ramula Camp project in West Kenya indicated the possibility of a “significant” resource increase, it said.
The gold miner has said that Ramula “has the potential to become one of Africa’s next quality, high-grade gold mines”.
Aura Energy Limited
Appetite for nuclear power is picking up as the world moves away from fossil fuels. Demand is growing particularly strongly in emerging markets as population levels there balloon.
I think mining company Aura Energy’s profits could also soar as a result. It owns the Tiris project in Mauritania from which it hopes to begin producing material in 2024. It also owns an exploration project in the country and another in Sweden.
Changing environmental legislation could harm Aura’s earnings in the coming decades. But right now, things look very bright for the uranium producer. The International Atomic Energy Agency thinks nuclear power capacity will more than double between now and 2050, to 873 gigawatts net electrical.
