Fancy investing in some top-quality penny stocks? If you have money that you want to invest as part of this year’s ISA allowance you’d better be quick. The new tax year begins at midnight. Any contribution room left over can’t be rolled over to the 2021–22 tax year.
I certainly wouldn’t suggest rushing out and buying any old UK shares before the deadline. Acting in haste can cost investors a fortune in the long run. Remember that there’s no obligation to invest straight away with the money you’ve parked in an ISA. But those that have done their research might be more confident to splash the cash and not want to waste any time.
Here are a few five-star penny stocks I think would look good in my own Stocks and Shares ISA:
#1: A penny stock for the newbuild craze
I already own FTSE 100 housebuilders Barratt Developments and Taylor Wimpey in my ISA. This is because the UK (like large swathes of Europe) has a colossal shortage of new homes that means demand will remain strong for many years ahead. Another great way to play this theme is to invest in building product suppliers like SIG as home construction rates will remain strong to meet this shortfall. Finally, this particular penny stock has leading positions in areas like roofing and insulation. Bear in mind, though, that SIG generates around 60% of revenues from mainland Europe. So the spread of Covid-19 in this region poses a significant danger to earnings there.
#2: Property powerhouse
I also think Hibernia REIT is an attractive penny stock to buy right now. Though let’s get the elephant in the room dealt with straight away: almost all of the company’s Dublin property portfolio comprises office buildings. This could cause a considerable problem as the adoption of more flexible working practices by business takes off. That said, there are still reasons to be bullish about this UK property share. Ireland has a long track record of attracting foreign investment. Inflows could surge too following Brexit as the country is the only European Union member where English is the primary language. All this means that demand for Dublin’s office space could keep climbing over the long term.
#3: Solar surfer
Those that are involved in the production of green energy have an exciting future as lawmakers try to slash their carbon footprints. This is why I think NextEnergy Solar Fund is an attractive penny stock for the next decade at least. This UK energy share operates scores of solar power plants in the UK and a cluster in Italy. Remember that these sorts of ethical shares aren’t guaranteed to deliver monster shareholder returns, however. Building, running, and energy storage costs at solar projects are quite high and this can take a huge bite out of profits, for example. I still think investing in the green revolution is a good idea though. And NextEnergy is an appealing way to do so.
Royston Wild 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.