3 sinking penny stocks I’d buy today to hold for 10 years!

I think these penny stocks are top buys following recent price falls. Here’s why I’d buy them today and hold for the long haul.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’m searching for the best penny stock to buy right now. Here are three I’d snap up today and aim to hold forever.

Testing times

It seems the world will experience a long and choppy recovery from the coronavirus crisis. Global Covid-19 cases continue to grow as the Delta virus variant spreads. Vaccination rates have flattened in many regions and the emergence of new mutations could worsen the spike at any moment.

BATM Advanced Communications (LSE: BVC) is a UK share that stands to thrive in this climate. Revenues at its Bio-Medical division soared 10% in the first six months of 2021 as demand for its testing and diagnostic products boomed. However, BATM isn’t just a one-trick pony. It also makes networking and cybersecurity products, providing it with plenty of profits opportunities in an increasingly digital world.

Be aware though, that BATM Advanced Communications trades on an elevated P/E ratio of 39 times. Such a high valuation could cause the penny stock’s share price to collapse if anything other than explosive earnings growth becomes apparent. Today the company, which has fallen 27% in value over the past 12 months, changes hands at 86p per share. I’d buy in at these levels.

Playing your cards right with penny stocks

The Card Factory (LSE: CARD) share price has fallen 50% in value in less than five months. Confidence in the penny stock has plummeted as concerns of surging inflation and its impact on consumer confidence have increased. I think the market may have overreacted here however. I’d argue that retailers focussed on value like Card Factory stand to gain from falling shopper sentiment.

I’d also argue that Card Factory operates in one of the more defensive areas of the retail sector. People don’t stop sending greetings cards or celebrating special occasions when economic conditions worsen, right? While the UK share faces increased competition from online players like Moonpig and Thortful, the company’s investing in its own digital presence to exploit the e-commerce boom. I think the business is a great buy at current levels of 49p per share.

The African Queen

The Airtel Africa (LSE: AAF) share price has slipped from September’s record peaks of 103p, providing a decent opportunity for dip buyers, in my opinion. The telecoms share has risen 37% over the last 12 months, and I expect the business to resume this uptrend soon.

Airtel Africa is one of the biggest telecoms providers on the continent. It’s also a major player in Africa’s fast-growing mobile payments industry. Its activities are highly regulated, and so the threat of profits-damaging action from lawmakers is an ever present. But as wealth levels in Africa balloon, and demand for telecoms services and financial products leaps as a result, I believe this UK share can still expect to deliver blockbuster profits growth in the coming decades.

Airtel Africa shares go for 93p a pop right now. Consequently, it trades on a rock-bottom forward P/E ratio of 6 times. With the company boasting a chunky 4.3% dividend yield too, I think it’s one of the best-value penny stocks to buy today.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Airtel Africa Plc and Card Factory. 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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »