Risk appetite on UK share markets is slowly creeping higher again, thanks to encouraging news concerning the economic recovery. The Bank of England’s decision to hike its growth forecasts on Thursday has provided the most recent boost to investor confidence.
I’m scanning the London Stock Exchange for some of the best penny stocks to buy right now.
It’s quite possible UK share prices could reverse sharply again should the Covid-19 crisis worsen. But this isn’t something that’s deterring me from continuing to invest in my Stocks and Shares ISA.
However, be mindful of how a stock’s profits will be hit if the public health emergency persists. Companies with high levels of debt that stand to be most affected by a prolonged pandemic should probably be avoided too. But as a long-term investor I’m still looking to invest right now.
Studies show that long-term share buyers like me tend to enjoy an average annual return of 8-10%. By buying quality British stocks today I’m still putting myself in with a chance of reaping such delicious returns. Here are two of what I feel are the best penny stocks to buy in my ISA if I had £10k to hand.
One of the best penny stocks to buy?
The Ryanair (LSE: RYA) share price has just closed above 17p per share, taking it to within a whisker of new three-and-a-half-year highs.
The UK airline share has soared on signs that the European aviation industry might be opening up again. Of course, the penny stock could reverse sharply again if Covid-19 cases spike again though, and travel barriers are re-erected en masse.
As a long-term investor though, this wouldn’t deter me from buying Ryanair’s shares. Firstly, the Irish flyer has more than €3bn worth of liquidity. It therefore has plenty of financial muscle to help see it through the coronavirus crisis.
And secondly, the stratospheric pace at which the budget end of the airline market looks set to expand suggests this could be one of the best penny stocks to buy for the 2020s.
A fast food firecracker
As someone who buys shares with a view to holding them for 10 years and above, I think DP Poland (LSE: DPP) is also an attractive UK share to buy today. As the operator of the Domino’s Pizza franchise in Poland, it stands to exploit rising wealth levels in this Eastern European territory.
Statista expects online food delivery revenues in Poland to rise at a compound annual growth rate of 10% through to 2024, for example.
I also like the steps DP Poland has taken to expand by buying pizza restaurant group Dominion in December. This low-cost share (which trades at 8.8p) could prove to be one of the best penny stocks to buy too if the pandemic flares up again.
System sales rose 7% in 2020, due in large part to Covid-19 lockdowns. Bear in mind though, competition is high in DP Poland’s marketplace and this could damage future revenues growth.
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.