Here are four top penny stocks I’d buy for my own UK shares portfolio next month.
A penny stock for the ages
Britain’s has been a top destination for overseas students for centuries. In fact, latest data shows that UK universities are perhaps more popular today than ever before. According to the Higher Education Statistics Agency the number of non-UK students enrolled in institutions jump 12% in the 2019/2020 academic year to a record 556,625.
It seems that the long-term outlook for accommodation provider Empiric Student Property remains quite robust then, at least in my opinion. And while bookings for the upcoming academic year are lower than they would be during this point in previous cycles, activity is picking up as pandemic restrictions are lifted. I think this penny stock is a great growth share to buy, even if its more conservative approach to acquisitions could see it lose business to rivals.
The decision to begin making hygiene products has helped save Creightons’ bacon and keep revenues and profits rising during the Covid-19 crisis. Indeed, financials this week showed sales rose 29% in the 12 months to March, to £61.6m. This was thanks to a £14.6m contribution from newly-launched ranges of soaps and similar hygiene-based goods.
I think things are looking up for the company’s traditional beauty and haircare products too, as government restrictions ease and people get out and about again.
It’s also worth noting that Creightons has its eye on expansion. Management said cash generated by the group’s growth has put it in “an excellent position to take advantage of any new opportunities that may arise,” adding it was “open to the acquisition of new brands with a digital presence.”
Remember though, that a return to lockdown conditions could drive Creightons’ recovery off the tracks.
A top value stock
Coats Group manufactures zips, trims and threads which are essential components in the clothing industry. This puts the penny stock in the box seat to ride the rebound in fashion sales as people return to all forms of socialising.
Indeed, revenues at the business rocketed 37% year-on-year in the first six months of 2021 to $732m, due to lockdown restrictions easing. However, Coats has a lot of debt on its balance sheet ($168m worth as of June) and this could cause a problem if demand for its products sinks again. Still, at current prices, I think the business could be too cheap to miss. It trades on a forward price-to-earnings growth (PEG) ratio of just 0.2.
I think Zoetic International could be one of the best penny stocks to buy if one is concerned about the ongoing public health emergency. This is because the company manufactures and then sells cannabidiol (or CBD) oil products in the US and Europe to people suffering from medical ailments. And so, like any drugs developer, it doesn’t have to wring its hands worrying about how economic, political or social crises will damage its top line.
People will still move heaven and earth to get their hands on its treatments. However, it’s important to remember Zoetic operates in a highly-regulated industry. Thus, the risk of revenue-smacking law changes to the sale and usage of cannabis products are high.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Coats Group. 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.