I’m searching for the greatest penny stocks to add to my portfolio in June. Here are two I’ll be looking to buy when I have spare cash to invest.
Mind Gym
The spotlight on workers’ mental health — as well the impact of poor mental health on company productivity — has intensified in the post-Covid climate. It’s why I think Mind Gym (LSE:MIND) could experience brilliant earnings growth.
This behavioural science consultancy goes into companies to improve employee wellbeing and enhance leadership culture. It saw revenues rise 12% during the 12 months to March. And it is likely to keep stacking up business wins as burnout across the global workforce picks up.
A survey by business loan provider Money.co.uk illustrates the scale of the problem. It shows that almost half (47%) of employees said they had reduced their level of effort at work over the past one to two years.
Some 63% of UK workers embrace ‘Bare Minimum Monday’, the report adds. A similar percentage have said they also take it easy on Fridays to avoid burning themselves out.
I like Mind Gym because it has a strong balance sheet to help it continue innovating to win contracts with blue-chip companies. It had cash of £7.6m on its books as of March, levels that beat the firm’s prior expectations. It also has a £10m debt facility that remains undrawn.
I’m conscious that trading here could be turbulent in the near term. A tough macroeconomic environment could see companies scale back spending in areas like staff motivation.
But I believe this is baked into Mind Gym’s rock-bottom valuation. City analysts expect earnings here to rise 127% in financial 2024, leaving the penny stock trading on a forward price-to-earnings growth (PEG) ratio of 0.1.
A share is considered undervalued if it trades on a reading below 1.
Andrada Mining
Buying some lithium stocks is also attractive to me as electric vehicle (EV) sales explode. Andrada Mining (LSE:ATM) is one such company I think is a top buy right now.
Formerly known as known as AfriTin, the company owns the Uis lithium mine in Namibia, an asset it has described as “a globally significant lithium and tin resource”. Tin production has commenced here and rapid expansion is planned to supercharge output. Completion of a lithium pilot plant there is also scheduled for next month.
Andrada also owns the nearby Nai-Nais mine, a project that the company announced this week has just produced maiden lithium concentrate. Chief executive Anthony Viljoen said that the milestone “moves us one step closer to full-scale lithium production”.
Lithium demand is tipped to take off as EV sales steadily rise. The International Energy Agency thinks global sales of these low-carbon vessels will hit 14m in 2023, up 35% from last year’s levels. Andrada could be one of the best UK shares to capitalise on future growth.
Of course the firm’s earnings could disappoint if it encounters mine development problems. But on balance I believe its portfolio of outstanding metal projects still make it a top penny stock to buy.
