The London stock market’s off to a strong start in 2026, but many growth stocks still look dirt cheap. I’ve scoured the FTSE 100 and FTSE 250 to find the best of these bargain stocks to buy. I’ve also identified several top penny shares with brilliant growth prospects.
Want to see what I’ve found? Here are two ultra-cheap growth shares I’m considering for February.
Growth trust
Allianz Technology Trust (LSE:ATT) harnesses the enormous growth potential of the US tech sector. Since early 2021, it’s delivered an average annual return of 12%.
Yet right now, it trades at a juicy discount to the value of its share holdings. Major portfolio assets include Nvidia, Alphabet, Apple and Microsoft, four of the so-called Magnificent Seven tech giants.
At 557p per share, Allianz Technology trades at a juicy 8.5% discount to its net asset value (NAV) per share.
So what are the risks of buying this tech trust? Arguably the biggest one today is mounting speculation of an AI bubble. Doubts are growing over the profitability of this new tech frontier, one in which the US tech sector’s highly exposed.
If these fears worsen, shares in Allianz Technology could fall sharply. This is undoubtedly a risk. But my own feeling is that talk of an AI collapse are overblown, as results from industry specialists continue to smash forecasts.
Besides, Allianz Technology’s diversified portfolio of businesses (49 in total) operate across many different tech segments. This in turn would help limit the extent of any AI-related selling.
Indeed, with exposure to multiple red-hot tech trends like including cybersecurity, robotics, self-driving vehicles, and cloud and quantum computing, I’m expecting the FTSE 250 trust to keep delivering double-digit annual returns.
On Topp
Penny stocks like Topps Tiles (LSE:TPT) can be extremely volatile investments. Their prices can jump up and down on even the slightest piece of news. In this case, it could sink if negative news from the construction sector spooks the market.
Yet penny shares like this can also have significantly greater growth potential than FTSE 100 and FTSE 250 shares. I’m optimistic Topps can deliver huge investor returns, driven by government plans to supercharge new home creation.
Housing ministers want to build 300,000 new homes a year between now and 2029. That’s a heck of a lot of tiles. Given the advanced age of Britain’s housing stock, I’m expecting Topps to enjoy strong demand from the repair, maintenance and improvement (RMI) markets too.
But that’s not all, as the retailer can expect further benefits from its successful ‘Mission 365’ growth strategy. Key actions include expanding its product ranges and improving its digital and trade channels.
At 41.9p per share, the growth stock trades on a forward price-to-earnings (P/E) ratio of just 7.6 times. Earnings are tipped to jump 84% this financial year. An 7.7% dividend yield for this year provides an added sweetener for value investors.
