Many investors don’t like to buy UK shares that cost less than a pound a pop. This is because their low cost can result in extreme price voliatility. I consider this to be a great shame as there are tonnes of top penny stocks I think could make long-term investors piles of cash.
Here are what I think are four of the best sub-£1 stocks to buy now.
#1: A top UK tech share
One might think that gambling companies like Entain or 888 Holdings might be the best ways to ride the explosion in online betting. But I think XLMedia could be another great way to play this theme.
This particular penny stock provides digital marketing services to the betting and sports industries. I also like the fact that XLMedia services the fast-growing personal finance arena too. Remember though, the gambling industry is highly regulated and any clampdown on operators could have a significant knock-on effect on this UK share.
#2: Steppe on it
Steppe Cement could prove to be a great way to get rich with emerging markets, in my opinion. This UK share manufactures cement and sells the bulk of it in its operating base of Kazakhstan. It therefore has significant exposure to a territory in which construction activity looks set to keep growing strongly.
Indeed, GlobalData thinks the country’s construction sector will grow at an average of around 6% a year between now and 2025. Be warned though, the Kazakhstani economy could grow more slowly over the longer term due to its dependence on strong oil prices. Crude values could potentially slump as green energy slowly takes over. And this could have a big indirect impact on Steppe Cement’s revenues.
#3: A penny stock for the auto rebound
I believe Vertu Motors could be one of the best penny stocks to buy for the current economic recovery. This is because cars are an essential commodity in Britain, and indeed across the globe. And the amount consumers spend on them tends to recover extremely quickly when economic conditions begin to improve.
I also like this particular UK retail share as it sells both new and used cars, giving it a broader potential customer base. I’d buy it despite the threat posed to the economic rebound by rising Covid-19 cases.
#4: Playing the millionaire boom
I also think Surface Transforms could be a great way to play the car industry recovery. This particular penny stock manufactures high-performance ceramic brakes for major car manufacturers. In fact, I think the company’s a great way to play explosive growth in the premium car market in particular.
Knowledge Sourcing Intelligence analysts think the global car market will be worth $56.3bn by 2025, versus $31.6bn in 2019, as the number of millionaires and billionaires keeps growing. Bear in mind that the huge chip shortage hampering car production could dent Surface Transforms’ near-term profits growth however.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Vertu Motors. 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.