Centamin

Buying gold stocks remains a good idea in my book as prices rocket and economists raise their inflation forecasts.

This week, Bank of England (BoE) policymaker Michael Saunders was the latest to warn of the strain. He said: “Inflation pressures would probably be greater and more persistent” than the BoE expects, if further rate rises are not forthcoming.

This comes just days after the BoE said consumer price inflation would hit 10% in 2022.

The big question is if the BoE (like other central banks) will be able to hike rates as aggressively in the months to come as global growth grinds to a halt. I’m not so sure they will.

As I said, buying gold mining stocks could be a good idea amid this high prospect of low growth and high inflation (or ‘stagflation’). And Egypt-focussed Centamin (LSE: CEY) is one on my radar, thanks to its 5.3% dividend yield.

I must remember though, that resurgent safe-haven buying of the US dollar could harm Centamin’s profits. A rising greenback essentially makes it more expensive to buy gold, hitting metal demand from investors.

Glenveagh Properties

Ireland’s shortage of new housing is vast. Even as interest rates rise, homes demand continues to outpace supply, supporting strong trading for the country’s homebuilders.

Glenveagh Properties (LSE: GLV) is a case in point. In late April’s trading update, the business said it continues to witness “strong demand” for its homes. Revenues rose 105% at Glenveagh back in 2021, thanks to higher completions (up 64%) and climbing property prices.

Pleasingly, Glenveagh’s boosting production to make the most of these fertile trading conditions too. It is on track to deliver 1,400 suburban homes in 2022, up from the 1,150 completions it sealed last year.

However, I am concerned about the impact of rising raw material and labour cost on Glenveagh’s bottom line. But as of today, the business continues to bat back against these pressures. It said last month that “the underlying strength of the market and [our] attractive product offering” means house price inflation continues to outpace cost rises.

Today, Glenveagh carries a mighty 6.5% dividend yield. I expect dividends here to impress long beyond 2022 as well.

Banco Santander

Investing in economically-sensitive shares like banks is risky business today as global growth cools.

However, some financial industry stocks are so cheap that I think they represent attractive value. Banco Santander (LSE: BNC) is one such stock that has caught my attention with its excellent all-round value.

For 2022, Santander trades on a forward price-to-earnings (P/E) ratio of around 5.1 times. The banking giant also carries a mighty 6.9% dividend yield.

As a long-term investor, Santander has plenty of appeal for me. This is because the company has significant exposure to Latin America. And it’s stepping up investment there to capitalise on soaring demand for financial products.

In December, it announced plans to spend $6bn on digital transformation there between 2022 and 2024. It said the investment would “expand operations and further improve customer service” in the region.

Rising personal incomes are supercharging demand for loans, bank accounts and similar services. Yet product penetration here remains low, giving Santander colossal sales opportunities. Researchers at McKinsey & Company have said they expect Latin America “to remain the growth leader in banking” and for banking penetration rates to keep climbing.

Antofagasta

FTSE 100 mining stock Antofagasta (LSE: ANTO) is another stock I’d buy for its big dividends today. The yield here for 2022 sits at a tasty 5.5%.

Unlike Centamin — whose share price could rise strongly in the near term alongside gold prices — Antofagasta is in danger of slipping as stagflation sets in. Copper is an economically-sensitive commodity and prices could slip sharply, pulling Antofagasta’s profits down in the process.

Particularly concerning are signs of economic strain in China. Fresh Covid-19 lockdowns are hitting the country hard and latest data showed exports hit two-year lows. Worringly for Antofagasta, China accounts for half of all copper demand.

However, I’m someone who invests in stocks based on their long-term outlook. And I think Antofagasta is looking good as the green revolution clicks through the gears.

Soaring demand for electric vehicles (and associated infrastructure) and renewable energy technology look set to supercharge copper consumption this decade. Antofagasta can also expect demand for its metal to light up as global construction rates soar and sales of consumer electronics boom.

Goldman Sachs thinks copper demand will soar 600% between now and 2030.

Royal Mail

Royal Mail’s (LSE: RMG) share price has fallen heavily during the course of 2022. This has pushed the dividend yield up to a robust 7%.

I think this makes the FTSE 100 firm a screaming buy. That’s even though there are risks facing Royal Mail in the near term and beyond. E-commerce sales have fallen sharply from Covid-19 levels, hitting parcels traffic at the courier. Conditions could remain tough too as the cost of living crisis hits consumer spending.

There’s also the problem of high restructuring costs as Royal Mail adjusts to the digital shopping era. The threat of industrial action is also never far away.

But it’s my opinion that Royal Mail still remains a top buy today. I think traders and investors have been quite short-sighted in selling the stock so heavily. E-commerce in the UK is set for strong and sustained growth following this post-pandemic adjustment.

Analysts at Worldpay think the British e-commerce market will grow 26% between 2021 and 2025 to $260bn. Demand for Royal Mail’s services should rebound strongly, in my opinion.

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This particular mining stock pulls copper (alongside lead and zinc) out of the ground in Kazakhstan and North Macedonia. These metals are used in massive quantities in electric vehicles, to name just one reason why I’m paying it close attention.

Earnings here are forecast to rise 3% in 2022. This means the metals digger trades on a forward price-to-earnings (P/E) ratio of just 6.5 times. On top of this, Central Asia Metals boasts a mighty 6.9% dividend yield at current prices.

I’d also buy CAML because of its impressive production record of late. The company produced a forecast-beating 14,041 tonnes of the stuff in 2021, up 1.3% year-on-year, ahead of guidance. I think it’s a top buy despite the backdrop of rising political instability in Kazakhstan.

A penny stock on my radar

Property prices are booming in the UK. But of other countries are seeing higher prices too. Therefore I’m thinking of giving my portfolio a bit of geographical diversification by investing in overseas housebuilders (I already own Taylor Wimpey and Barratt in my portfolio).

Penny stock Glenveagh Properties (LSE: GLV) is one such construction stock on my watchlist. This UK share builds properties in Ireland, a market in which the average home price jumped 7.7% in 2021.

Glenveagh is ramping up production to fully capitalise on these fertile trading conditions as well. It is seeking to complete on 1,400 homes a year from 2022 (by comparison it completed on 1,150 last year). Forecasters think earnings here will swell 66% in 2020, leaving the builder trading on a price-to-earnings growth (PEG) of just 0.3. I’d buy it despite the threat rising raw material costs poses to profits.

A top US share for the gaming boom

I’m considering buying shares in Take-Two Interactive Software (NASDAQ: TTWO) too as video games demand rockets. It’s an industry powerhouse with massively-popular franchises like Grand Theft Auto and Civilisation in its stable.

Take-Two is also joining in on the M&A craze sweeping the sector and is looking to seal the biggest games company buyout in history. More specifically, the US share’s planned acquisition of Zynga would help it become a major player in the fast-growing mobile games segment.

This may be needed given the huge supply problems affecting Sony’s PS5 and Microsoft’s Xbox Series X consoles. These shortages could have a permanent impact on console usage and, by extension, demand for Take-Two’s titles on these platforms.

City analysts think Take-Two’s earnings will soar 37% in the year to April 2022. This leaves it trading on a forward PEG ratio of 0.9. A stock could be undervalued with a reading below 1.

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Even the best penny stocks to buy can be prone to extreme share price volatility though. But as someone who invests for the long term, the prospect of some choppiness doesn’t put me off. Like any other UK share, I’m confident that with the right research I can find low-cost stocks that should rise in value over a longer time horizon.

Here are two such penny stocks I’m thinking of buying in September.

Tin star

AfriTin Mining (LSE: ATM) is a share that’s not without its degree of risk. The process of digging for raw materials is a costly and complex endeavour and problems can be common that can significantly hit the bottom line. What’s more, the company trades on a price-to-earnings (P/E) ratio of around 19 times. This sort of valuation could prompt a share price correction if confidence in the company starts to wane.

That said, this is a penny stock I’m paying very close attention to. AfriTin’s share price has risen 160% over the past 12 months, carried higher by an electrifying rise in tin prices. The soldering metal recently hit record highs of around $36,600 per tonne. And I think it could keep going as Covid-19-related supply issues drag on and demand from the consumer electronics sector rises strongly.

I also like AfriTin’s plans to add lithium and tantalum to its product suite. Lithium uptake looks set to soar thanks to its critical role in powering electric vehicles, a market set for explosive growth. And tantalum demand should rise as global smartphone production steadily rises.

Another thriving penny stock

Glenveagh Properties (LSE: GLV) is another penny stock I’m thinking of buying today. The Irish housing market is suffering from the same supply crunch as here in the UK, a dynamic I’ve sought to play by buying FTSE 100 stocks Barratt Developments and Taylor Wimpey.

Latest financials from Glenveagh have illustrated the great investment potential across the Irish Sea. All 1,150 properties it plans to build in 2021 have been sold, the builder said, and a further 300 that are scheduled for next year too. Unsurprisingly, Glenveagh is ramping up production to make the most of this environment and it expects to build 3,000 homes a year by 2024.

Home price growth continues to pick up steam and latest data showed the average property value jumped 6.9% year-on-year in June. A major shake-up in housebuilding policy is needed to soothe the supply and demand imbalance and stop prices from continuing to rocket. But signs of progress on this front are not yet forthcoming, meaning that profits at the likes of Glenveagh remain on course to continue booming for some time yet. A word of warning, though: this penny stock is still highly cyclical and so a severe economic downturn could hit demand for its product hard.

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Take Land Securities (LSE: LAND) for instance. This FTSE 100 business, which owns a large portfolio of shopping centres and retail parks, has seen its share price barge through the £10 barrier for the first time in almost two years this December.

But I fear that market-makers may be a bit premature in piling in on the hope of a miraculous improvement in shopper appetite. Data from Springboard has shown the amount of footfall on British high streets drop[ed 8% year on year on the final Saturday before Christmas, annexing hopes of a perky late rush following this month’s general election and providing a serious warning for the coming year.

But Landsec’s woes aren’t compartmentalised to its retail assets, of course. Earlier this month, analysts at Deutsche Bank downgraded the business given the murky outlook for the London office sector, a reflection of persistent Brexit uncertainty that threatens to dominate 2020.

In this environment, City analysts expect Landsec to record earnings dips of 1% and 3% in the fiscal years to March 2020 and 2021 respectively, not catastrophic but periods for which forecasts have been slashed in recent months. And the prospect of more painful reductions in the weeks and months ahead encourages me to avoid the share despite its big dividend yields of 4.8% and 5% for this year and next.

A better property pick

Those seeking a slice of the property market would be much better served buying shares in Glenveagh Properties (LSE: GLV), in my opinion.

Its operations are a world away from those of Landsec, the business being a major player in the Irish housebuilding sector. But thanks to the colossal size of Ireland’s homes shortage, just like here in the UK, it looks likely that profits should keep pounding higher. It’s why property website Daft.ie estimates that despite Brexit uncertainty, the value of the Irish property market is still rising 1% year-on-year to total €519bn.

No wonder that City analysts feel that Glenveagh, undergoing a period of significant production increases is set to record electric profits in 2020, then. A 52% bottom-line rise is currently forecast, one which leads to expectations of a first-ever dividend too.

One for the 2020s

A subsequent 0.6% dividend yield might not be much to get excited about, although Glenveagh’s exciting growth plans make the prospect of electric payout growth over the next decade a very real possibility. The Dublin company’s cluster of open sites the length and breadth of Ireland have a capacity for more than 4,000 new homes, while current planning applications have the potential to deliver in excess of 6,500.

Besides, at current prices, a sub-1 forward price-to-earnings growth (or PEG) ratio of 0.4 times helps to offset this marginal near-term yield. Glenveagh is a share that could  deliver some terrific shareholder returns over the next decade.

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BBA Aviation’s (LSE: BBA) one such share I reckon could burst forth. Despite concerns over the health of the US economy, the FTSE 250 company’s share price has remained on the up-and-up, rising 33% in the year to date. I see no reason why the aviation services provider can’t add to these gains, either, when interims are unpacked on August 5.

The stock published a stunning set of results last time out in May, and whilst US economic conditions are expected to have worsened more recently — putting strain on overall air traffic in the country — I’m confident that the massive investment BBA’s made in its broadening and improving its fixed-based operator (FBO) network should deliver yet more splendid sales growth.

A great growth and dividend share

The flying ace can’t exactly be considered a bargain on paper. But I’d argue that its forward P/E ratio of 16.2 times is in fact an indicator of great value, given its ability to thrive in difficult market conditions, not to mention the exceptional long-term earnings opportunities delivered by that aforementioned spending programme as well as booming air traffic volumes.

Indeed, on the latter point, Airbus believes that surging traveller numbers and consequent growth in plane deliveries will cause the aviation services business to more than double in size over the next two decades, from around $150bn per annum today to $330bn by 2037.

Add in a bulky 4.1% corresponding yield and I reckon BBA’s a terrific buy today.

Massive yielder one day?

I’d also happily buy Glenveagh Properties (LSE: GLV) before half-year results of its own are unpackaged on August 23.

Those seeking a slice of the property sector might want to look at some of the major players on the other side of the Irish Sea because, as I mentioned in a recent piece on Cairn Homes, the housing shortage that’s propelling earnings relentlessly higher for British operators is similarly boosting their peers on the Emerald Isle.

This was again evident in Glenveagh’s most recent trading update in early May in which it celebrated the “strong private buyer interest and sales for its starter-home schemes in the spring selling season.” It’s no wonder that City analysts are expecting the Dublin firm to burst into profit in 2019 and for the bottom line to keep surging through 2020.

But this isn’t the only reason to pile into the company today, in my opinion. While investors here may have to wait longer for big dividends than for those over at BBA, predictions that Glenveagh will start rewarding investors from next year means that it sports a jaw-dropping 12.7% forward dividend yield.

At current prices, Glenveagh trades on a high prospective P/E rating of 24.2 times, although I’d argue that the stunning dividend takes the edge off. Like BBA, I’d happily buy the builder ahead of August and hold it for years to come.

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