2 top penny stocks I’d buy to hold until 2033!

I see plenty of attractive penny stocks that I’d buy today. But to commit to holding for at least a decade rules out most of them.

| 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.

Young mixed-race woman jumping for joy in a park with confetti falling around her

Image source: Getty Images

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.

Right, hand me some money to invest in a couple of penny stocks, and then close the stock market for the next 10 years!

It’s easy to convince ourselves we always invest for the long term.

But anything that made it impossible for us to sell for at least a decade… well, that would focus the mind, wouldn’t it?

I’d be tempted to look for investment trusts. But I think that might be cheating a bit.

Bricks and mortar

So, for 10 years, I’d go for Michelmersh Brick Holdings (LSE: MBH). With the construction squeeze, the shares have lost half their value since their 2021 peak.

Topps Tiles and Steppe Cement were other candidates, all suffering the same way. And I don’t think there’s much to choose between them.

I reckon the property sector will pick up again. And when it does, I expect the UK’s makers of bricks and tiles to do well, whoever leads at the sharp end of building and selling homes.

With an 88.5p share price at the time of writing, and a market cap of £86m, Michelmersh only just squeaks under the penny stock limit of 100p and £100m. But that’s good enough.

We’re looking at a forecast price-to-earnings (P/E) ratio of only 9.5, and there’s a 4.8% dividend yield on the cards. Looks like good value.

Diversified choice

Most of my favourite penny stocks are related to building or construction in some way. But with a 10-year tie-in, I’d want diversification.

So my second pick is healthcare provider Totally (LSE: TLY), whose shares have had a tough year.

Totally runs the 111 emergency help line, urgent care services, and out-of-hours GP surgeries, among its variety of services.

Healthcare is politically charged. And using the private sector for NHS services could be a bit of a hot potato in the coming years.

But with ever-growing demand, I can’t see any going back now. Will the NHS improve massively in the next decade and be able to take all its services back in-house?

That could throw a spanner in the works. But I put the chances of its happening at close to zero.

Oh, Totally pays nice dividends too, with a forecast yield of 5.1%.

Other candidates

There are other penny stocks that I feel optimsitic about. They include Nanoco Group, which develops nanotechnology, and Zinnwald Lithium.

But I expect those to be volatile, and I’d need the ability to bail out if I saw something go wrong. I could not commit to 10 years.

I like the look of Superdry now too. But 10 years can seem like a lifetime in the fashion business. So that’s out for the same reason.

Penny stock risk

These also-rans hint at the main risk of the two I’ve chosen, and it’s down to the volatility of small companies.

Another economic squeeze in the next decade? A new stock market crash? Tiddlers like these could be at the biggest risk of going bust.

That’s why I’d only ever buy penny stocks as part of a wider, diversified, portfolio.

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.

Alan Oscroft 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

Young woman holding up three fingers
Investing Articles

7%+ yields! 3 FTSE 100 and FTSE 250 dividend stocks I’d buy to target HUGE passive income in 2024

Good news! These UK blue-chip shares (including one from the FTSE) offer some of the biggest dividend yields on the…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

Here’s one 7.5% yielding income stock I’d snap up in a heartbeat!

Sumayya Mansoor explains why this income stock looks too good to miss out on, and why she’d buy the shares…

Read more »

2024 year number handwritten on a sandy beach at sunrise
Investing Articles

Should investors look to buy REITs for passive income in 2024?

Shares in real estate investment trusts have rallied as consumer defensives have started to fade. Where should passive income investors…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

This impressive growth stock has slumped 16% in days! Time to buy the dip?

It’s always interesting when a growth stock drops. This Fool takes a closer look at this high flyer to find…

Read more »

An airplane on a runway
Investing Articles

I missed the Rolls-Royce share price at 40p. Should I buy now at 300p?

The Rolls-Royce share price is up 220% in the last 12 months. So is the FTSE 100 turnaround stock now…

Read more »

Man smiling and working on laptop
Investing Articles

3 high-dividend UK shares I think are too cheap to miss!

These FTSE 100 and UK small-cap shares offer excellent all-round value. Here's why I'm looking to buy them for my…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Could this cheap 7% yielding FTSE 250 stock soar in 2024?

This FTSE 250 stock has experienced mixed fortunes this year, but could the New Year bring better tidings? Our writer…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

Why these 5 FTSE 100 stocks have my attention!

Dr James Fox details the five FTSE 100 stocks that meet his value criteria. But what are they and what…

Read more »