Healthcare hero

Buying certain UK-focused healthcare stocks like Totally (LSE: TLY) could be considered risky on one hand. The fast-changing political landscape creates uncertainty over what future levels of NHS funding will look like.

This particular penny stock provides a range of medical services. These include urgent care services alongside the NHS such as the 111 emergency phoneline and operating out-of-hours doctor surgeries.

However, I think Totally has a very bright future. Britain’s population is rapidly ageing and so demand for its services should steadily rise over the long term.

I also think the company’s essential operations make it a highly attractive share to buy today. Healthcare is one sector in which spending remains stable at all points of the economic cycle.

Totally awesome

The business also stands to gain from growing NHS hospital waiting lists (which hit new record highs of 6.5m last month). In this climate it can expect the nation’s free healthcare service to continue contracting out lots of work.

What’s more, Totally’s March acquisition of Pioneer Health Services will boost its chances of winning more of this business. The penny stock bought the specialist NHS secondary care services provider for £13m earlier this year.

City analysts think Totally’s earnings will rise 62% in this financial year ending March 2023. This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.2. A reading below 1 suggests a share could be undervalued.

Making money with uranium

Berkeley Energia (LSE: BKY), by comparison, is a penny stock that’s not expected to make profits any time soon.

This creates extra risk for investors. Firms in this position can be forced to tap shareholders for cash if they get into difficulties. They can also take on more debt to fund their activities.

Still, Berkeley is a mining share that’s packed with investment potential. The business owns and operates Spain’s giant Salamanca uranium project. This is a project which could produce 4.4m pounds of the radioactive element a year when production begins.

A top power play

Companies like Berkeley Energia will play a crucial role in helping countries reduce their carbon emissions.

Lawmakers across the continent are stepping up plans to extend the life of existing reactors, and/or to build new facilities to reduce their use of oil and gas. Their appetite has been intensified by Russia’s invasion of Ukraine and the uncertainty this creates for energy supplies too.

News from the European Parliament last week has boosted the outlook for Berkeley even further. This is because lawmakers have agreed that nuclear investments can be labelled as sustainable energy sources. This is significant as it could unlock billions of extra pounds to bolster the growth of the nuclear industry.

The post 2 top penny stocks I’d buy to hold until 2032! appeared first on The Motley Fool UK.

I have £753 sitting in my account waiting to be used. If I used this to buy stocks I could — based on the average rate of return of 8% a year — potentially turn this into £7,577 after 30 years.

Here are three of the best penny stocks to buy to boost my long-term wealth.

A top renewable energy stock

Manufacturers of hydrogen fuel cells like AFC Energy (LSE: AFC) will play a huge part in the clean energy revolution. This particular company specialises in ‘green’ hydrogen, too, the sort that doesn’t need to be generated using fossil fuels. Because of its lower carbon footprint it’s seen as the future of the hydrogen market versus dirtier ‘grey’ and ‘blue’ versions of the gas.

Green hydrogen is yet to be adopted on the scale of other low-carbon energies. And so AFC could be considered far more speculative than other renewable energy stocks. But momentum here is showing signs of improvement (in November, for instance, construction equipment giant JCB agreed a deal with Australia’s Fortescue Future Industries to import billions of pounds worth of the green gas).

Another low-carbon penny stock

I also think Berkeley Energia (LSE: BKY) could be a great stock to buy as the planet reduces fossil fuel usage. It isn’t a renewable energy stock but a uranium miner which is focussed on developing the Salamanca project in Spain. The radioactive material will be essential in helping the nuclear sector pick up some of the slack from reduced oil and gas demand.

Berkeley hopes that Salamanca will produce 4.4m pounds of uranium a year when it is up and running. That’s equivalent to a tenth of Europe’s total current usage. This penny stock is packed with potential, though remember that any issues developing the mine and getting production up and running could decimate profit targets and cause problems with project funding.

Protect and serve

I believe Corero Network Security (LSE: CNS) could deliver mighty shareholder profits as the digital revolution rolls on. As the name suggests, this tech share specialises in protecting users from cyber attacks. And more specifically, Corero provides defence from distributed denial of service (or DDoS) attacks. These are the attacks that bombard a website with large data requests that exceed site capacity and cause a crash.

Cyber attacks have been around for decades but the number is growing particularly strongly today. That’s thanks in parts to the rapid rise of state-sponsored electronic warfare to take down companies and government installations. Smaller operators like Corero will have to paddle extremely hard to survive alongside major industry players like IBM and Microsoft. But the rate at which this industry is growing still suggests this could still be a top penny stock to own.

The post £753 to invest? 3 of the best penny stocks to buy in April! appeared first on The Motley Fool UK.

Now in the 11th year of a bear market, uranium remains one of the most detested metals around. Having hit $137 back in 2007, its price tag drifted below $20 per pound in 2017. Things have got so bad that many of the biggest players in the industry have struggled to generate a profit — leading them to either cut production or suspend it completely.

Although it may take a period for the full impact of this to be felt, knowledge that the supply of any commodity is being constrained can often be a great time to consider taking a position. And while demand hasn’t soared just yet, things are beginning to look favourable.

Fifty-nine nuclear reactors are currently under construction (with many of these in China) and 170 are planned for the next decade. Having ceased using the metal following the disaster at Fukushima back in 2011, Japan is also restarting its plants.

Moreover, new mines take many years to be approved and built — a positive for those companies are already several stages into the process. If demand follows the same curve it took from 2004 to the middle of 2007, the rise in the price of uranium could be simply breathtaking. 

So how can I get involved?

As far as specific stocks are concerned, there are two ways a private investor can get exposure.

The first is via Spain-focused miner Berekely Energia (LSE: BKY). Construction of its Salamanca project is expected to begin later this year and should, according to the company, reach production when the “unavoidable” supply-demand deficit really kicks in.

In addition to July’s announcement of a potential €9m in cost savings associated with building the mine, Berkeley has recently joined the main market and listed in Spain. This listing should serve to raise its profile and encourage new institutional investors to climb on board.

Unfortunately, this progress hasn’t been reflected in the share price. Having hit a high of 69p back in January 2017, the stock now trades a little below 43p.

The second — and arguably less risky option — would be to buy shares in Yellow Cake (LSE: YCA).  Named after the appearance of powdered uranium oxide, the business plan is hardly complex: buy uranium at the bargain basement prices, hoard it, and wait for a recovery.

Based on recent performance, it would seem at least some market participants appreciate the simplicity of this strategy. Yellow Cake’s stock is already up 26% since its IPO in early July.

Buyer beware

Clearly, anyone considering investing in an uranium-focused stock needs to be aware of the risks involved. An obvious drawback is that no one knows when its price will recover. In the meantime, there’s no guarantee it won’t drop even further.

A related consideration, particularly for those with shorter investing horizons, is the fact that neither Berkeley or Yellow Cake pay dividends, which in this context could be regarded as a reward for being patient. Like any mining project, there’s also the possibility of the former encountering a host of setbacks between now and its target date for commencing production.

Nevertheless, should you be comfortable devoting a proportion of your capital to speculating on an eventual sustained recovery, I suspect uranium could prove a very rewarding investment in time.  

The post This contrarian play could have millionaire-making potential appeared first on The Motley Fool UK.

A play on clean energy

With the price of uranium at a 12-year low, it’s not all that surprising if Berkeley Energia (LSE: BKY) has been flying under many investors’ radars. However, it’s for this very reason — along with the huge potential of its wholly-owned and fully-funded Salamanca mine near Madrid — that I think the shares warrant closer inspection by those who believe the demand for clean energy can only go in one direction. 

Once up and running, the mine is expected to churn out 4.4m lb of uranium concentrate every year, making Berkeley one of the top 10 global producers. What’s even more remarkable, however, is the fact that the £120m cap still expects to make a profit even if uranium prices don’t budge. According to the company, it will have one of the world’s lowest production costs at $15/lb — far cheaper than FTSE 100 mining giants Rio Tinto or BHP Billiton.

To be sure, there’s no knowing when — exactly — the price of uranium will recover. Nevertheless, there are a number of potential catalysts. China is expected to double its nuclear capacity in two years (and double again by 2035) and Japan is restarting its nuclear programme after it was brought to a sudden halt following the Fukushima disaster in 2011. With hundreds of US and EU utilities also re-contracting up to one billion pounds of uranium over the next five years, Berkeley believes we are approaching a major demand/supply tipping point. 

Based on the notion that the only way to outperform the market is by doing the things that the majority of investors can’t or won’t, Berkeley looks a very interesting proposition at the current time.

Cop a load of this

Whether you like the idea of driving an electric vehicle or not, you’d better get used to the fact that the automotive industry is changing at a furious pace. 

One potential way of profiting from this is to buy shares in copper-focused miners such as Asiamet Resources (LSE: ARS), particularly as the current oversupply of the metal won’t last forever.

The £54m cap’s shares have rallied over the last few days following the release of an encouraging update on recent drilling near the company’s Beruang Kanan Main (BKM) prospect on the island of Kalimantan. In addition to its huge feasibility-stage copper project, Asiamet now believes it has found a standalone polymetallic deposit with tests revealing high grades of zinc, lead, silver and gold.

Aside from its assets (which also include the Jelai Gold project and part-owned Beutong resource), one other thing worth bearing in mind is the track record of Asiamet’s management team. Chairman and significant shareholder Tony Manini, for example, built up a $20m miner (Oxiana Ltd) into a £6bn commodity giant in just eight years. Sounds to me like he’s a good person to have around.

Like Berkeley Energia, Asiamet isn’t a stock for those with short investing horizons. Nevertheless, the prize for those able to sit on their hands could be worth the wait. 

The post Could these small-cap stocks help future-proof your portfolio? appeared first on The Motley Fool UK.

But in this energy revolution, there is relatively little mention of nuclear power. Yet most agree that this will be a crucial component of the future energy mix. The nuclear power industry is growing year on year, and China and India alone plan to build 300 new reactors.

The global nuclear industry is booming

That means this is a booming industry, and as well as growth in capital expenditure, there will be rising demand for uranium, the main fuel for these reactors.

And this is where firm Berkeley Energia (LSE: BKY) comes in. This little known company specialises in mining uranium. And it has made a discovery of a massive deposit in Western Spain. Yet this is a small cap with a value of just £63.8m, which doesn’t pay a dividend, and is not yet turning a profit. However, it seems to me to show particular promise.

The Salamanca project has the potential to power the whole of the UK’s electricity needs for five and a half years. EU, national and regional approvals have been received, and site works commenced in March 2016.

The main risk I see with this project is that uranium prices could slide as part of the falls in commodity prices as the mining and mineral bear market gets under way. Yet Berkeley argues that its low capital and operating costs cushion it from this; it plans to be one of the world’s lowest cost uranium producers.

What’s more, the sharply rising demand in uranium around the world suggests that spot prices won’t fall as low as other commodities. That’s why I think Berkeley Energia could well be worth looking into as a small cap growth play. But rather like fellow small cap Sirius Minerals, we will have to wait till mining starts to get an accurate picture of how much this firm is worth.

While metal and mineral demand is falling

In contrast, mining titan BHP Billiton (LSE: BLT) has seen its profits fall sharply as the commodities supercycle has ended. This is one of the world’s largest miners, and has operations across Africa, Latin America and Australia. Substantial over-investment during the boom years means that BHP will need to cut back severely to correct the global over-supply of metals and minerals.

China’s building boom is ending, which means that, in contrast to uranium, demand for commodities such as iron ore and copper is falling, while supply has increased.

Mining bulls will say that BHP Billiton has a dividend yield that is hard to ignore. Yes, that 9.07% income is high. But it is crucial to get a picture of the long-term viability of this dividend. High yields can sometimes be very deceptive, and it is highly unlikely that it will be maintained. Analysts estimate that it will be cut to just 2.61% in 2016, as the earnings that drive dividends dive.

So, the bottom line is that you should continue to avoid BHP Billiton, but, if you are not risk averse, Berkeley Energia may well be worth a closer look.

The post Is Berkeley Energia plc a better buy than BHP Billiton plc? appeared first on The Motley Fool UK.

Should shareholders hold on for further gains, or sell and take profits?

Berkeley Energy

Shares in uranium miner Berkeley have risen by 100% since June, as the small-cap miner has made solid progress towards developing its low-cost Salamanca project, in Spain.

The firm’s test drilling has found that the Zona 7 deposit at Salamanca is likely to deliver a high grade of ore at low cost. Zona 7 has significantly improved the economics of the Salamanca project.

According to Berkeley, the inclusion of Zona 7 gives Salamanca has a net present value of £580m, or 322p per share. That’s 13 times the current share price! In an update today, Berkeley’s managing director Paul Atherley said that Berkeley is now focused on making Salamanca the world’s lowest-cost uranium producer.

This work forms part of the feasibility study which is currently underway. This study will be needed to enable Berkeley to secure financing for the project, which already has all the permits required for development to begin.

I suspect there is more upside to come for Berkeley shareholders, and rate the shares as a buy at 24p.

IG Group

Spread-betting firm IG is probably the UK market leader, but are the firm’s shares a buy?

IG said this morning that trading during the second quarter had been slightly ahead of the first quarter. Heading into the second half of its financial year, IG remains on track and says “it is pleased with the ongoing strength in client recruitment”.

Although IG is vulnerable slumps in trading activity, when times are good the business is extremely profitable and cash generative. Last year, IG reported an operating margin of about 40% and net cash of £148m.

IG’s dividend is usually covered by free cash flow. As a result, I think that the group’s 3.9% yield is quite attractive. While IG shares may not seem cheap at 18 times 2016 forecast earnings, I believe that the firm’s strong balance sheet and high profit margins make this a reasonable price.

IG could deliver more in 2016 — I wouldn’t sell just yet.

Victoria

AIM-listed flooring manufacturer Victoria (LSE: VCP) has rocketed 175% higher this year. The increase seems to have been driven by the ambitious growth plans of chairman Geoff Wilding, whose family trust controls a 33% shareholding in the firm.

Victoria’s expansion has been fuelled by the issue of new shares and new debt. The firm’s share count has risen by 69% to 11.9m this year, while net debt has risen from £36m to £81m. Mr Wilding has used this influx of investor cash to fund a string of acquisitions.

At the moment, it’s too soon to say how successful these acquisitions will be. The shares trade on 18 times 2016 forecast earnings but 81 times trailing earnings. My reading of this is that the shares could crash if results are not up to expectations.

Personally, I would take some profits and sell at today’s price of nearly £13 per share. I think the risks outweigh the potential gains.

The post Will Berkeley Energy Ltd (+62%), IG Group Holdings plc (+8%) & Victoria PLC (+175%) Beat The Market Again In 2016? appeared first on The Motley Fool UK.