I’m hoping to buy these penny stocks in time for Christmas. Here’s why I think they could be brilliant additions to my UK shares portfolio.
Surface Transforms
Engineer Surface Transforms makes high-performance carbon ceramic brakes for cars and aeroplanes. I think profits here could take off from next year as it ramps up capacity to capitalise on the sports car boom.
Within the next three years the business hopes to have a new factory up and running that will support sales of £150m. That’s three times more than its 2024 production target.
Surface Transforms might not be a suitable pick for risk-averse investors, however. Recent production issues have caused it to reduce near-term sales forecasts and hammered the company’s share price. But recent weakness could prove an excellent opportunity for long-term investors to buy in.
DP Poland
I’m seeking to increase my exposure to rapidly-growing emerging markets. And I believe that fast food business DP Poland could be an effective way to do this.
The company is the master franchisee of the Domino’s Pizza brand in Poland and Croatia. These are significantly underpenetrated markets where sales continue to rocket. Latest financials showed like-for-like system sales in Poland jump 34.8% to new monthly peaks in October.
DP Poland plans to open more stores across its markets in the coming months to take the total number to around 120. It also continues to invest heavily in its digital proposition. I think it’s a top buy despite the threat of persistent cost inflation.
SRT Marine Systems
Marine technology company SRT Marine Systems faces choppy waters in the near term as the global economy cools. Sales of its gadgetry — which allow ships and boats to be accurately tracked — could disappoint if shipping activity drops off.
That said, a £160m order book (as of early October) helps provide decent earnings stability for the near term. It’s a share I remain bullish on as demand booms from multiple sectors including shipping, search and rescue, and fishing.
SRT is a market leader in automation identification systems (AIS). And only a fraction of the world’s vessels contain such tech, which provides exceptional growth potential for this penny stock.
Kodal Minerals
Buying commodities producers always entails a high level of risk. Exploring for minerals, developing mines, and excavating metals is highly complex and expensive business.
But investing in lithium stocks could be a good idea as demand for the light metal booms. Kodal Minerals is one mining stock I’d buy to target this market.
The company is developing the gigantic Bougouni mine in Mali. It has targeted production of 220,000 tonnes of lithium-rich spodumene each year there, and has sealed a $100m funding agreement with Chinese mining giant Hainan to get the project up and running. This helps reduce risk to investors.
I believe Kodal could surge as sales of electric vehicles and consumer electronics boom.
