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Alliance Pharma

What it does: Alliance Pharma is in the healthcare market, and deals with the acquisition, marketing, and distribution of pharmaceutical products.

By Alan Oscroft. There’s no risky biotech or pharma research here. Alliance Pharma (LSE: APH) is in the consumer products business, and gets most of its revenue from Europe, the Middle East and Africa.

And it looks like it’s been a profitable business.

The stock has been highly valued in the past. But we’re looking at a forward price-to-earnings (P/E) ratio of around 13 now.

And with strong earnings rises expected in the next couple of years, that should drop to only a little bit over eight by 2025. If the analysts have it right, that is.

There are dividends, too, with a forecast 4.1% yield this year, rising to 4.7% by 2025 on current forecasts.

There are risks with this AIM stock, though. Profits have been a bit erratic, and we don’t know how solid these forecasts for earnings and dividends might turn out.

But I do like this combination of growth prospects and progressive dividends.

Alan Oscroft has no position in Alliance Pharma.

Gateley Holdings

What it does: Gateley is a full-service law firm with offices across the UK and a strategic overseas base in Dubai.

By Charlie Carman. Gateley (LSE:GTLY) became the UK’s first publicly listed law firm after its AIM flotation in 2015. Since most firms in the legal industry are structured as LLPs, rather than companies, Gateley shares offer investors a rare chance to gain exposure to this lucrative sector.

The Gateley share price has been on a downward trajectory in 2023, but strong H1 results suggest the sell-off might not be justified. Revenue grew 22% to £76.1m, underlying pre-tax profit increased 13% to £9.6m, and the dividend was boosted from 3.0p to 3.3p per share.

Granted, uncertainties exist regarding how listed law firms should be valued, including Gateley. After all, only a few have taken the IPO route, and the collapse of Ince Group earlier this year rattled investors in the niche sector.

Nonetheless, the AIM stock’s finances appear to be in good health. This could be a classic opportunity to be greedy when others are fearful.

Charlie Carman has no position in Gateley Holdings. 

Volex

What it does: Volex is a manufacturing company that specialises in power products. It serves customers in the healthcare, data centre, consumer electronics, and electric vehicle (EV) industries.

By Edward Sheldon, CFA. Volex (LSE: VLX) shares strike me as a great investment right now.

For starters, the company is doing well on the back of its exposure to the data centre and electric vehicle industries (it just partnered with Tesla). For the year ended 2 April 2023, revenue was up 17.6% year on year to $722.8m. Meanwhile, the company said that it was seeing high levels of customer demand in the current financial year.

Secondly, the stock is relatively cheap. At present, the forward-looking price-to-earnings (P/E) ratio here is about 13. I see that as quite low given the company’s level of growth. It’s worth noting that analysts at HSBC have a 510p price target for Volex, which is well above the current share price.

Finally, after a big pullback, the stock is now rising again. So, there’s positive share price momentum here.

Now, this AIM stock can be quite volatile at times. This is a risk to consider. However, I like the overall risk/reward setup. Taking a long-term view, I see a lot of potential.

Edward Sheldon owns shares in Volex.

The post Best AIM stocks to buy in September appeared first on The Motley Fool UK.

Growth stocks can be volatile in a slump though. And the risk is that the bottom can be hard to spot.

So fallen growth shares might still have a lot further to go. On that cheery thought, here are three I like the look of.

Growth reset

Alliance Pharma (LSE: APH) acquires and markets pharmaceutical products, and it brought in the growth investors.

The shares more than doubled in the five years to March 2022. But then the wheels came off, and they crashed.

Since that share price reset, we’ve had a modest recovery. And I think I see more to come.

FY22 results are due on 21 March, and the firm reckons they’ll be decent. The board says it expects cash flow to “build strongly in 2023“. That should help get debt down and reduce one of the main risks.

The City expects a price-to-earnings (P/E) ratio of 19. But earnings growth could drop that to around 12 by 2024.

If the results don’t impress, we could see more weakness. But if they do, might we see a new bull run?

IT services

Computacenter (LSE: CCC) put on a bit of a growth spurt in the Covid years. The work-from-home thing was a big help on that score.

The share price has since fallen back again though. I do think it got a bit too hot, but it looks to me like it’s cooled a bit too far now.

We’re looking at P/E multiples of only around 13. And that’s for a company that reckons it still has solid growth potential in the coming years.

The tough global economic conditions might well hold it back in 2023. And I suspect we could see some more price weakness.

Results are due on 20 March, and I think they might give the shares a boost.

Drug development

Ergomed (LSE: ERGO) is my third pick. This time, the share price hasn’t had a big fall. And it’s on a high valuation more in line with some typical growth shares. But I think it might be worth it.

The shares have soared by 500% over the past five years. Gulp! But at least they’ve eased off a bit since the start of 2023.

Forecasts put the P/E at over 30, and that might look a bit high. But it could fall to the low 20s by 2024. Results are due on 21 March, so we should get an idea of how things look.

The last update spoke of a 22.5% revenue growth. The order book is up 23% too. Oh, and there’s no debt.

Hmm, I almost forgot what the firm does. It provides a range of clinical services to big pharma companies around the world. That could be a big win.

I think this is the biggest risk of the three, but I like it. I need to dig deeper.

The post 3 dirt cheap growth shares to buy right now? appeared first on The Motley Fool UK.

A word of warning – AIM is more lightly regulated than the main market and also contains some high-risk speculative stocks. Careful research is needed to find the hidden gems, but I’ve found it’s worth the effort. Here are seven AIM market stocks that I’d consider buying for my portfolio today.

Safer profits from property

My first choice is AIM property developer Watkin Jones (LSE: WJG). This company specialises in building student accommodation and apartment blocks, which it then sells to big rental landlords. New buildings are often pre-sold before they’re built, so the risk of losing money on completed projects is low.

The main fear I have is that this business could face much tougher competition in the future. Purpose-built rental accommodation is a growing market with some big money behind it. But Watkin Jones is an established player with a good reputation. I think it should continue to do well.

The shares have slumped recently, and this stock now offers one of the higher dividend yields on the AIM market, at around 3.9%. I think Watkin Jones looks good value at current levels.

A potential bargain

My second pick is tableware and home fragrance group Portmeirion (LSE: PMP). This business grew out of a gift shop in North Wales, but today owns brands including Spode, Royal Worcester and Wax Lyrical.

One potential concern for me is that if it continues to buy up other businesses, Portmeirion could lose focus on its core pottery business. This still generates the majority of profits.

However, Portmeirion’s latest results suggest to me that this isn’t a problem yet. The group’s 2021 profits were only slightly below 2019 levels and City analysts expect profits to hit record highs this year.

The shares currently trade on just eight times earnings and offer a 4% dividend yield. I’m tempted to buy at current levels.

Promising newcomer

Franchise Brands (LSE: FRAN) only floated on AIM in 2016 but is growing fast and looks promising to me. This group owns a range of franchised businesses, including drain specialist Metro Rod.

Management recent expanded into the US with the acquisition of Filta, which provides commercial kitchen maintenance services through a franchise network in the UK and US.

Franchise Brands’ shares aren’t cheap, on 21 times 2022 forecast earnings. If growth slows, then the shares could fall sharply. But progress so far has been good, in my view.

Annual profit has risen from under £2m in 2017 to more than £5m last year. Franchise Brands is one AIM growth stock I’d consider buying for my portfolio.

Nuclear specialist

I normally avoid buying shares in building contractors. But I think that Renew Holdings is a bit different. This business specialises in essential infrastructure such as rail, water and nuclear energy.

Most of these areas are heavily regulated. Unlike housing and commercial property, they do not usually suffer from cyclical booms and busts. I’m particularly interested in the exposure to nuclear energy, which I think could be a growth area as the UK moves away from coal and gas.

Renew has delivered steady growth in recent years, with profits rising from £12m in 2017 to more than £30m last year. So far, management has been able to manage material shortages and rising costs without any impact on trading, we’re told.

If these problems continue, I think it might become more difficult for the company to manage them. That could cause profits to fall below expectations.

However, I’d see this as a short-term issue that would affect many competitors equally, so I’m not too worried. For now, I think Renew Holdings looks an interesting opportunity for continued growth.

A cash-backed 6% yield

Bank note authentication and brand protection specialist Spectra Systems has one of the highest dividend yields on AIM, at 6.4%.

This tempting payout looks fairly safe, in my view. Spectra has no debt and generates plenty of cash each year, thanks to its 35% operating profit margin. I think the main reason these shares don’t trade much higher is that the company’s growth rate has been fairly slow in recent years.

Investors worry that demand for bank notes and Spectra’s services could fall in future years. But there’s no sign of that this year and I think new products such as a machine-readable plastic banknote material could support long-term demand.

This is a niche business, but as an income investor I’m tempted to add a few to my portfolio.

Pharma growth

Healthcare is one of the long-term growth themes in my portfolio. One less well-known company in this sector is Alliance Pharma (LSE: APH).

Alliance specialises in buying mature consumer healthcare products and improving their distribution and marketing. The firm’s share price has doubled over the last five years.

This business may not sound that exciting, but profit margins have averaged over 20% since 2016 and sales have nearly doubled over this period.

I think management is a key risk here – misjudged future acquisitions could hit profits and damage the group’s growth record.

For now, though, I remain bullish about this company. I’d be happy to tuck a few shares away for the next five years.

25% growth forecast at this stock

My final pick is currency exchange specialist Argentex (LSE: AGFX). This small-cap specialises in providing foreign exchange services to corporate and private clients.

The business is led by founder and CEO Harry Adams, who has a 12% shareholding in the business. I reckon this should mean his interests are well-aligned with those of shareholders.

Perhaps the biggest risk I can see is that this is a fast-growing, competitive market. Will Argentex end up as a long-term winner or an also-ran?

I don’t know, but broker forecasts suggest it could report 25% earnings growth this year. Based on these estimates, I think the shares look very cheap on eight times forecast earnings. This AIM stock is on my list as a potential buy.

The post 7 top AIM market shares to buy now appeared first on The Motley Fool UK.

A top pharma stock

Our need for essential pharmaceutical products and consumer healthcare goods remains largely unchanged at all points of the economic cycle. This is what makes Alliance Pharma (LSE: APH) a great cheap UK share for me to buy if stock markets crash. The company makes products such as Kelo-Cote scar treatment gel, Vamousse lice treatment, and Nu-Seals blood clot prevention tablets, which it sells worldwide.

Alliance Pharma also specialises in acquiring products that have strong brand power and a leading position in the areas in which they trade. This provides an extra layer of protection.

However, I am keeping in mind that an M&A-led growth strategy like this can throw up a world of problems, from disappointing revenues to the buyer being forced to overpay for an asset amid a scarcity of other acquisition opportunities.

A premier UK share to buy

We also need to keep ourselves fed, even during the onset of economic, social, and political crises. This is why I’m thinking of snapping up Premier Foods (LSE: PFD). This food manufacturer makes cakes, custards, cooking sauces and gravies among ranges of other edible products. And its labels such as Mr Kipling, Oxo, and Homepride are ones that shoppers will stretch their shopping budgets to buy.

The food manufacturing industry is packed with competition, of course. And Premier Foods isn’t immune to pressure from other heavyweight brands, or generic supermarket labels. I get confidence from company data showing that its products can be found in 96% of British homes.

I’d also buy Premier Foods despite the threat of rising cost inflation. I think it should be able to effectively pass higher input costs on to its customers.

An unloved nearly-penny stock to buy

The personal goods sector is another which tends to perform robustly when economic conditions worsen. This is why I’m thinking of buying Revolution Beauty Group (LSE: REVB) today. Indeed, I’d buy it following its recent drop to record lows. Revolution’s share price has dipped 23% since its IPO in July.

I believe this almost-penny stock has a bright future as consumers become more conscientious about the environmental impact of their products.

Revolution Beauty is PETA-certified beauty product producer — none of its cosmetics (or product ingredients) are tested on animals. It is also taking steps to aggressively reduce the amount of plastic it uses, while it is bulking up its range of vegan products to latch onto this fast-growing segment.

Of course, the beauty market is highly competitive and Revolution will have to push mighty hard to make an impact. But as a long-term investor, I like its strong green credentials, and think they could deliver great shareholder returns in the years ahead.

The post 3 nearly-penny stocks I’d buy if stock markets crash appeared first on The Motley Fool UK.

Box clever

Food retailer Parsley Box Group (LSE: MEAL) hasn’t had an easy ride since its IPO back in April. In fact it’s halved in value from its launch price as investor confidence has eroded. It was last trading just above penny stock territory at 101p per share.

Parsley Box’s share price reached a new low following interims released last week. Though the retailer saw revenues leap 26% higher in the six months to June, to £1.4m, soaring costs caused pre-tax losses to rocket 432% year-on-year to £5.4m. There’s a danger that costs could remain elevated, too, if Covid-19 cases continue to harm the supply chain and Brexit-related trade disruptions persist.

That said, I think Parsley Box could be an attractive buy for long-term investors. This is because its products and services are aimed at the over-60s, a demographic that’s growing fast and which is one of the more affluent age categories. There are said to be more than 12m people aged 65 and over today,  according to the Office for National Statistics. This is a figure that’s set to keep surging and which will top 20m within the next 50 years.

And so far this cheap UK share seems to be making a splash here, the number of active customers rising 77% in the first half. With a healthy balance sheet Parsley Box has the means to keep growing its customer base through fresh marketing campaigns and further product innovation, too.

A cheap UK share in good health

Snapping up Alliance Pharma (LSE: APH) shares is another good idea, in my opinion. In fact, trading at this cheap UK share has been particularly strong of late and turnover bounced 24% in the six months to June. I’d buy it before its half-year results announcement is released on Tuesday, 21 September.

Alliance Pharma’s consumer healthcare portfolio is packed with market-leading global brands like its Kelo-Cote scar treatment, Nizoral anti-dandruff shampoo, and Amberen menopause product. The tremendous brand power of these must-have healthcare products allows the company to grow profits during both strong and weak economic periods.

That said, Alliance Pharma endured a rare profits decline in 2020 as Covid-19 closed retail outlets, making it harder for customers to get its products. Delays to routine treatments caused further problems as demand for the healthcare play’s prescription products also dropped. It’s important to remember, then, that further bottom-line trouble could be around the corner as coronavirus cases rise.

All that being said, I still think this cheap UK share’s a top buy for me as a long-term investor. In particular I’m excited by Alliance Pharma’s ambitious acquisition-led growth strategy, one that’s given annual earnings growth a significant boost in years gone by, and which the company has the balance sheet strength to continue pursuing. 

The post 2 cheap UK shares to buy right now appeared first on The Motley Fool UK.

I buy stocks for the long term, though. And so the prospect of temporary share price choppiness doesn’t put me off from buying low-cost shares. Here are a couple of top nearly penny stocks I think could soar in value in the years ahead.

The right medicine

The Alliance Pharma (LSE: APH) has risen an impressive 50% during the past 12 months. And in recent sessions this former penny stock has barged to record highs above £1. I reckon the business could gain further traction too when half-year results are unveiled on Tuesday, 21 September.

Alliance Pharma owns the marketing rights to scores of heavyweight brands in the fields of consumer healthcare and prescription medicine. These products, like Kelo-Cote scar treatment, Nizoral dandruff shampoo, and (following recent acquisition action) menopause reliever Amberen, sell in huge quantities in more than 100 countries. Indeed, latest financials showed like-for-like sales of its health products up 8% in the six months to June.

Its successful M&A-led growth strategy has helped Alliance Pharma’s earnings rise 33% over the past five years. So I’m encouraged that the stock has plenty of appetite and financial clout to keep going. But acquisitions are risky business and past form is not always a reliable guide to future performance. Revenues from acquisitions can disappoint and costs can swell, taking a big bite out of profits.

A dirt-cheap penny stock I’d buy today

It’s clear that housebuilding activity in the UK needs to ratchet up several gears over the next decade. And this bodes well for manufacturers of building products like Michelmersh Brick Holdings (LSE: MBH). I’ve already bought brickmaker Ibstock for my Stocks and Shares ISA for the very same reason.

I’d buy this nearly penny stock before it releases half-year results on Tuesday, 7 September. Most recent financials in June revealed “strong demand” for its products amid a “very active” construction sector. Many major housebuilders are ramping up production as favourable lending conditions supercharge demand for first-time buyers. So I expect trading at Michelmersh to remain quite robust for some time to come, a theme I don’t think is reflected at current prices. Today the low-cost share trades around 136p, resulting in a forward price-to-earnings growth (PEG) ratio of just 0.5.

I think Michelmersh is a top buy despite the impact that an economic downturn could have on its top line. The UK economy has bounced back strongly following 2020’s Covid-19-related washout. But the rebound could prove temporary and home sales could falter if the Delta variant continues spreading aggressively.

The post 2 nearly penny stocks to buy in September appeared first on The Motley Fool UK.

A gaming great

The staggering rate at which the video games market is growing offers plenty of UK shares to get excited about. I myself have invested in development services provider Keywords Studios to ride this theme. And I’d happily buy software developer Frontier Developments (LSE: FDEV) to make money from this phenomenon.

There’s no guarantee that a game title will be a success. Technical problems and a poor critical reception can prove a disaster for games developers like these. But Frontier has a decent track record on this front and Jurassic World Evolution for example — the sequel of which is set for later this year — sold a staggering 2m copies in the seven months following its release a couple of years back.

Analysts at Accenture say that the global video games market is worth a whopping $300bn. This is bigger than the music and movie industries combined. And they think there will be 3.1m gamers by 2023, a 400m rise from today’s levels. Frontier Developments could have a massive role to play in this fast-growing industry. And I think its low forward price-to-earnings growth (PEG) ratio of 0.7 makes it one of the best value stocks for me to buy today.

One of the best UK pharma stocks?

Buying UK pharmaceutical shares could also prove a wise strategy for me as global investment in healthcare grows. There are several British stocks I can buy to ride this strategy, perhaps most notably either AstraZeneca or GlaxoSmithKline. But I think a better way to play this theme could be to invest in Alliance Pharma (LSE: APH).

This is because drugs development is notoriously problematic. And even those two FTSE 100 giants I mentioned above are no strangers to disappointment at the lab bench. Such troubles can result in huge unexpected costs and a great big hole in the revenues column if they fail to launch on time (if at all). This is where Alliance Pharma could prove to be a better buy. The drugs that this pharmaceuticals stock acquires have already gone through the initial testing phase.

That’s not to say that this UK healthcare stock is totally without risk, of course. The products it chooses to snap up could come under scrutiny further down the line. And its acquisition-led model leaves it in danger of overpaying for a drug that may fail to deliver anticipated results.

However, Alliance Pharma has a packed portfolio of labels like revenues drivers Kelo-Cote and Nizoral, products that have underpinned splendid sales growth for years. This UK share doesn’t come cheap — it trades on a forward price-to-earnings (P/E) ratio of 19 times. But I think it could prove worthy of its slightly heavy paper valuation.

The post 2 of the best UK stocks to buy appeared first on The Motley Fool UK.

Alliance states its expertise is in the marketing and regulatory management of its products. The company’s products fit into two groups, consumer healthcare and prescription medicines, but are predominantly gained through acquisitions rather than in-house research and development.

Managing a portfolio of brands with expertise has delivered success. Alliance more than doubled its sales between 2015 and 2019. The Alliance share price was 33p at the start of 2015 but finished 2019 at 87p.

Obviously, 2020 was a tricky year for any company, but how did Alliance fare?

Coronavirus impact

The pandemic brought mixed fortunes for Alliance. On the one hand, its consumer healthcare division reported revenues of £85.3m for 2020, bettering the £83.7m of sales recorded in 2019. On the other, prescription medicine revenues slipped from £51.9m to £44.5m for 2020 due to routine medical appointments being delayed and cancelled during the pandemic.

Profits before tax slipped 58% from 2019 to 2020. However, a good chunk of that resulted from acquisition costs and non-cash impairment and amortisation charges — more on that latter. Alliance paid its shareholders a total of 1.61p per share in dividends in 2020, compared to 0.54p in 2019.

Expectations for 2021 are positive. Management reports 2021 has started well and sees a further rebound in sales for the year. This, together with the recent acquisition of Biogix, and its flagship Amberen brand, should help drive revenues back above 2019 levels.

Would I buy this penny share?

So could this penny share become a pound one in 2021? Possibly. The Alliance share price has been over £1 before. That was back in the summer of 2018. Interim results for that year, published in September, crashed the share price back down to 66p. Investors did not like the reorganisation of Chinese operations, which included a £2.5m write-down of a business line and a 35% slump in earnings per share for the period.

But assuming the world does get back to at least near normality in 2021, a positive half-yearly report might be enough to turn Alliance from a penny to a pound share. Although its price-to-earnings (P/E) ratio looks pricey at 65, I can see that Alliance does offer higher average revenue growth and higher margins than other personal care companies, as shown in the table below.

Source: FT equity market screener

But, growth is boosted by acquisitions, which can result in later write-downs. Alliance has decided to write off prescription medicine and other brands assets over 20 years. If they were all going off-patent within 20 years, that would make sense, but I see no mention of patents in the annual report. Without a patent, I am not convinced of the value of a brand of a prescription drug.

At the moment, I am neutral on Alliance. I need to do more digging and I will watch this penny share from the sidelines for the time being. 

The post Should I buy penny share Alliance Pharma? appeared first on The Motley Fool UK.

Having said that, this area of the stock market can throw up some very lucrative investment opportunities. So, it shouldn’t be ignored completely, in my view.

Here, I’m going to highlight two UK penny stocks I believe are worth a closer look right now. Both companies are profitable and appear to have decent long-term growth prospects.

Strong growth track record

One penny stock I believe looks interesting at the moment is Alliance Pharma (LSE: APH). It’s a UK healthcare company that owns the marketing rights to around 80 consumer healthcare brands and prescription medicines. Some of its key brands include Kelo-Cote, Nizoral, and Amberen.

What stands out to me about Alliance Pharma is that the company had a good long-term growth track record. Over the last five years, revenue has increased by around 170%. Revenue did take a small dip last year (which isn’t surprising given the environment). However, it’s expected to bounce back this year. For FY2021, City analysts expect top-line growth of 28%.

I also like the fact the company is profitable and pays a dividend. Quite often, penny stocks don’t. For FY2020, the company declared a full-year dividend payout of 1.61p. That’s about 46% higher than the one declared five years ago. At the current share price, the yield is about 1.7%.

There are plenty of risks to the investment case here, of course. A poor acquisition could set the company back significantly. Currency risk is also worth mentioning as the group generates substantial sales abroad.

However, the company appears to be confident about the future, stating recently that it looks forward to “regaining the strong momentum and revenue growth that the group has enjoyed in recent years.” So, I think it could be worth a closer look right now.

This penny stock just declared its first dividend

Another UK penny stock I believe is worth highlighting right now is EKF Diagnostics (LSE: EKF). It’s a leading global medical manufacturer that specialises in point-of-care and central lab devices. Its products are used in hospital and research laboratories, doctor’s offices and blood banks in more than 100 countries. EKF also manufactures and distributes products related to Covid-19.

EKF recently posted a very strong set of 2020 results that were boosted by its Covid-19-related activities. For the year, revenue was up 45% to £65.3m while profit before tax was up 180% to £15.4m.

As a result of this strong performance, the company declared a maiden dividend of 1p per share. The company also said it’s confident trading for the year ending 31 December will be “significantly ahead” of already-upgraded management expectations.

I don’t expect the company to keep growing at this prolific rate forever. Post Covid-19, sales and earnings growth are likely to normalise. It’s worth noting that if future growth is disappointing, the share price could fall as the stock has enjoyed a strong run over the last year.

Right now however, the company appears to have a lot of momentum. And after declaring its first dividend, I think it could be worth considering as part of a diversified portfolio.

The post 2 UK penny stocks to consider in April appeared first on The Motley Fool UK.

As we here at The Motley Fool have explained: “If an equity’s share price sits under £1, it can be deemed a penny share”. And like any UK share, these companies can enjoy significant price gains over the long term. However, their cheapness also means that they can be prone to significant price volatility.

2 cheap penny stocks on my radar

That said, here are two British penny stocks I think could help ISA investors like me make big profits in the coming years:

#1: Bakkavor Group

At 98p per share, UK food producing firm Bakkavor Group (LSE: BAKK) falls just inside penny stock territory. I’d buy this British stock because the long-term outlook for the ‘food to go’ (or FTG) sector remains extremely bright.

Covid-19 lockdowns caused sales in this food segment to fall sharply in 2020 following a decade of strong growth. But analysts at Lumina Intelligence think that demand will bounce back strongly as the world comes out of hibernation. They think the British FTG market will be worth £22.3bn by 2023, up more than a billion pounds from 2019 levels.

Bear in mind that the rise of homeworking could hamper long-term FTG growth rates. A sharp uptick in unemployment could derail food-on-the-move demand too, and profits growth at Bakkavor in turn. But there’s plenty more that I like about this penny stock. Along with its commanding position in the soaring FTG market (Bakkavor supplies the top four food retailers in the country) the company is also accelerating its drive into the huge US and Chinese marketplaces.

On top of this, I think Bakkavor looks like a mighty attractive buy at current prices. City analysts think annual earnings will rise 15% in 2021 and by another 11% in 2022. Consequently the company trades on a forward price-to-earnings growth (PEG) ratio of 0.8. It sports enormous dividend yields of 5% and 5.6% for 2021 and 2022 respectively.

#2: Alliance Pharma

Alliance Pharma (LSE: APH) is another cheap UK penny stock I think deserves a close look right now. At current prices of 82p per share, the company trades on a forward PEG ratio of 0.9, also below the benchmark of 1 that can suggest a share is undervalued. City brokers think earnings here will rise 16% in 2021 and 12% next year.

I like Alliance Pharma because the outlook for global healthcare investment is extremely encouraging. And this particular UK share doesn’t carry as much risk as other drug manufacturers, as it acquires and sells products that have already passed the unpredictable initial development stage and been on the market for some time. Remember, though, that problems with its products can always be recognised further down the line. And this can have repercussions on the bottom line if regulators decide to pull their approval for the sale of its drugs.

The post I’d buy these cheap penny stocks before the Stocks and Shares ISA deadline! appeared first on The Motley Fool UK.