In fact, if the experts are correct, a £1,000 investment in this tiny business could almost double to £1,935 by this time next year. By comparison, the forecasts surrounding Lloyds’ shares suggest an outcome of only £1,250.

So what is this mystery stock? And should investors rush to buy?

A capital-light gaming leader

Following a successful transition away from running its own consumer-facing gambling sites, Gaming Realms (LSE:GMR) now licenses mobile-optimised casino games for other gambling operators around the world.

The business model’s pretty simple. Gaming Realms builds the games for players, licenses them to regulated online casinos, and receives a share of the revenues generated.

Since the company doesn’t have to deal with the hassle of attracting players and running a gambling site, its underlying margins are among the highest in the sector. In fact, looking at the latest trading update, its popular portfolio of titles generated £31.4m in revenue last year – £15m of which was core underlying profit.

That’s a 47.8% adjusted EBITDA margin business growing at a double-digit rate on a near-debt-free balance sheet – an exceptional rarity for penny stocks. And it’s on the back of these highly scalable unit economics that the team of analysts at Peel Hunt have issued a 60p share price target.

Compared to where the penny stock trades today, that represents a 93.5% potential return over the next 12 months! So what’s the catch?

Risk versus reward

Such explosive potential performance rarely comes risk-free. And Gaming Realms’s no exception. While the firm has a vast portfolio of 200+ games, most are built entirely around one game format: Slingo – a hybrid bingo-slot machine mechanic.

So far, this has proven to be quite lucrative. But it also introduces significant concentration risk. If a competitor launches a credible Slingo alternative that online casino operators prefer, or consumer tastes shift away from this style of gaming, revenues could quickly dry up.

Even if Gaming Realms stays ahead of rival developers and shifting consumer tastes, there remains the ever-present regulatory risk. Restrictions on online gambling operators could handicap long-term growth, something we’ve already seen here in the UK.

And while Gaming Realms now generates the bulk of earnings from the US, future regulatory changes across the pond could similarly adversely impact the business. So is it worth the risk?

The bottom line

The regulatory landscape surrounding Gaming Realms is complicated. But with the business having extensive long-term experience in navigating these headwinds, an underlying price-to-EBITDA ratio of just 5.8 seems unusually cheap for a business with near-50% profit margins.

Investors will be getting a much more detailed picture of the business when management releases its full-year 2025 results at the end of March. And if there are no glaring red flags, investors may want to consider taking a closer look at this potential hidden gem of a penny stock.

The post Meet the 31p penny stock that’s forecast to smash Lloyds shares over the next 12 months appeared first on The Motley Fool UK.

An attractive business model

I’m talking about Gaming Realms (LSE:GMR). The current share price is 31p, but analysts have a positive outlook for the company. Based on the three analysts with a rating, all are forecasting strong gains in the coming year. Peel Hunt has the highest target price at 60p, with Investec the lowest at 56p. In theory, if the stock did reach 60p, it would almost double an investor’s money based on the current price.

Part of the reason for this outlook is the highly scalable, high-margin business model. Gaming Realms is a gaming content developer and licensor for other businesses. It creates games and then sells them on. This means that, once a game is built, each new partner adds recurring revenue at minimal extra cost.

This bodes well for the coming year because North America is now the largest market. The full-year results should be out shortly, but the latest annual accounts showed this geography accounted for 54% of content licensing revenue. I expect this has grown and will only increase further based on the fact that more US states are likely to legalise online gambling.

A dip to consider buying

Some will look at the 17% fall in the stock over the past year and be concerned. This is mostly down to new UK gambling stake limits, which have negatively impacted licensing revenue in this market. Back in September, half-year results showed overall revenue increased by 18%, but the UK market fell by 13%.

Of course, this remains a risk going forward, but I believe continued international expansion will help offset it. In fact, the UK could end up being a relatively small part of group revenue in the years to come. This is especially true if the planned push into Brazil and British Columbia goes well.

As a result, some may see now as a good opportunity to buy the stock at a low level. The price-to-earnings (P/E) ratio is 10.37. When I compare this to the average P/E ratio of the FTSE 100 at 18, it could be used to suggest the stock is undervalued.

As with any penny stock, caution is needed. Volatile share price movements make it hard to keep emotions under control. However, with a market cap of just £88m, Gaming Realms could rally significantly without becoming overvalued if its expansion abroad starts to yield financial results.

I won’t be buying the stock purely on ethical grounds, as I don’t want to hold companies associated with gambling. However, if investors don’t have the same concern, it could be a stock to consider.

The post Experts think this penny stock could rise by 80% or more in the coming year appeared first on The Motley Fool UK.

However, for adventurous investors with a higher risk appetite, the firm’s growth estimates are worth considering.

City analysts have pencilled in a surge in earnings of just over 24% for 2024 and more than 32% for 2025.

An optimistic outlook

Accelerating earnings like that are rare. Read most how-to books focused on growth investing and that’s what many previously successful investors have searched for – earnings getting bigger by ever-increasing percentages.

Quite often we see the figures the other way around with the biggest percentage increase in the nearest forward-looking period and then a decline in the percentages.

No business can keep up earnings acceleration indefinitely. But when it’s happening, we sometimes see the biggest share price gains too.

The business develops, licenses and distributes mobile-focused real money and social gaming content. It has operations in the UK, US, Canada and Malta.

In April’s full-year results report, the group posted some impressive numbers and delivered an optimistic outlook statement. Chief executive Mark Segal said the company is seeing “growing demand” for its Slingo portfolio in the international igaming markets.

Progress includes licensing games into 20 regulated markets and launching with 44 partners in 2023. The company has 75 live games, Segal said,“which demonstrates the scale of our content licensing business”.

Back then, the company had seen a “promising” start to 2024, with 14 new partners secured already, and new Slingo games “driving new players to Slingo”.

With such momentum, Segal said the directors are “excited” to continue delivering further game launches, partner deals, and an expanding global footprint. For example, there are planned launches for West Virginia and Greece.

From zero to hero

The business is performing well and that reflects in recent share price progress:

However, in 2019 and 2020, the business was loss-making, suggesting the presence of cyclicality in the industry.

There’s risk in that situation for shareholders. On top of that, it’s possible for the company’s offering to fall out of fashion with gamers. So progress likely depends on constant product launching to keep the punters interested. That strikes me as a scenario in which it may be easy for the business to take a mis-step – perhaps with dire financial and trading consequences.

As if that wasn’t enough risk, the fact Gaming Realms is a small-cap business means a likely extra layer of volatility for shareholders.

Meanwhile, the forward-looking earnings multiple for 2025 is running around 11.5 when set against analysts estimates. That doesn’t strike me as being an excessive valuation given the growth expected. In fact, the company has a price-to-earnings growth ratio (PEG) of about 0.6, where less than one is often considered to be good value.

This isn’t one for widows and orphans, and there are absolutely no guarantees of a successful investment outcome. Nevertheless, I’d consider it for a risk-adjusted position (read smaller) within a diversified portfolio of stocks and shares.

The post The City expects explosive growth in earnings from this almost-penny stock appeared first on The Motley Fool UK.

Online gaming and gambling

Gaming Realms is an online gaming business. It creates, licences, and distributes entertainment software. Furthermore, it works alongside some of the bigger players in the industry and creates games on their behalf as well as its own platforms.

It is worth remembering that a penny stock is one that trades for less than £1. So what’s happening with Gaming Realms shares currently? As I write, they’re trading for 31p. At this time last year, they were trading for 24p, which is a 29% increase over a 12-month period.

To buy or not to buy?

Let’s start with the bull case then. To start with, the gaming and online gambling market is a mammoth one and is only growing. This is good news for Gaming Realms. I’m buoyed by the fact it possesses strategic partnerships with some established firms in the space, namely Entain, DraftKings, and 888 Holdings. These agreements can only bolster Gaming’s performance and boost its shares and potential investor returns.

In addition to this, Gaming Realms owns the intellectual property to Slingo. Slingo is an extremely popular and lucrative game, over 30 years old, which combines slots and bingo. It has risen in popularity and Gaming has added 12 additional games in 2022 to the original series, bringing the total to 65 as I write.

Next, Gaming Realms has a decent track record of performance growth in recent years. It has grown revenue for the past four years in a row and profit for the past two years. In its most recent results for 2022, pre-tax profits jumped over 200%. However, I am conscious that past performance is not a guarantee of the future, especially when it comes to a penny stock as they are prone to more volatility.

Lastly, Gaming Realm’s growth aspirations seem to be coming to fruition, especially aggressive expansion in the US market. This is because online gambling and gaming is growing exponentially. This is due to loosening regulation in that territory. I believe this is shown through the recent performance growth mentioned earlier.

On a bearish note, tightening regulation is a looming spectre for Gaming Realms, especially in the US. This regulation can change at any time and could prohibit its growth prospects, in turn, impacting performance and potential investor returns.

Finally, there are moral considerations to take into account when looking at gaming and gambling firms like Gaming Realms. Some people take issue with investing in firms that derive income from gambling. This could impact investor sentiment, and even performance.

A penny stock I’d buy

I’ve decided I would be willing to buy a small number of Gaming Realms shares when I have the spare cash to do so.

I view Gaming Realms as a low-risk, high-reward prospect. At 31p per share, I won’t be investing hundreds so my exposure is limited. I do believe it is in a perfect position to provide me with decent long-term returns. This will be through its strategic agreements, gaming portfolio, especially its lucrative Slingo series, and growth plans.

The post £100 to invest? Here’s 1 exciting penny stock to consider! appeared first on The Motley Fool UK.

Here are two I’m aiming to buy for my portfolio soon.

CleanTech Lithium

Soaring electric vehicle sales paint a bright picture for lithium demand in the years ahead. Chile-focused miner CleanTech Lithium (LSE:CTL) could prove a great way to profit from this theme.

Indeed, the penny stock leapt on Monday after significantly upgrading resource estimates for its gigantic Laguna Verde asset. The flagship mine is now said to contain 1.8m tonnes of the battery metal, while measured and indicated resources were lifted by 39% to 1.1m tonnes.

Chief executive Aldo Boitano has said that the upgrade “[provides] more confidence in the resource potential and further de-risking of the project after an extensive work programme this year”. The pre-feasibility study is now underway, with CleanTech seeking annual production of 20,000 tonnes at the project.

The AIM company is also working on two other assets, one of which — Francisco Basin — is also expected to yield resource upgrades this quarter.

Purchasing early-stage miners is always risky. Buying lithium specialists in Chile adds another layer of peril for investors, too. Earlier this year the country’s government vowed to nationalise important assets on economic and environmental grounds.

But CleanTech’s mission to produce ‘green’ lithium from brine projects reduces the nationalisation risk. Its Direct Lithium Extraction method negates the need for evaporation, thus cutting the impact on local environment. The projects will also be completely powered by renewable energy.

Gaming Realms

Online gambling is big business and has much more scope for growth, and especially so in North America. Mobile games developer Gaming Realms (LSE:GMR) is a penny stock I’d buy to capitalise on this opportunity.

The business creates, licences, and distributes entertainment software to some of the biggest names in the gambling sector like DraftKings, Entain, and 888 Holdings. Pre-tax profits here surged 224% in 2022 as the firm launched in six new markets in North America and Europe.

Gaming Realms’ most lucrative title is Slingo, which, as the name implies, combines elements of slots and bingo. It’s been a massive money spinner since its launch in 1996, and the company is launching new titles in the franchise to keep the revenues streaming it (it rolled out three more last year alone).

I especially like Gaming Realms because of its plans for rapid expansion in the US. Loosening regulations there mean the market is growing strongly, and analysts at Researchandmarkets.com expect it to expand at an annualised rate of 11.8% through to 2028.

That’s not to say that the regulatory environment will remain friendly for operators, of course. Any changes could have a significant impact on the company’s profits. But on balance I believe this looks like a good penny stock to own.

The post 2 penny stocks I’d buy to hold for 10 years! appeared first on The Motley Fool UK.

Although they add considerable volatility risk to my portfolio, I’ve been looking for some of the best penny shares to buy. I don’t want to be too exposed to smaller companies, but I do think they could potentially provide a handy boost to my returns if I choose the right ones.

One stock that currently trades under 31p with a market cap just shy of £90m is Gaming Realms (LSE:GMR), a mobile games developer, licensor, and distributor. Here’s why I think this business has a bright future.

Slots and Bingo!

Gaming Realms focuses on the B2B market for real money and social games. It has long-term relationships with a range of big names in the gambling industry including 888 Holdings, Flutter Entertainment, and DraftKings.

The jewel in the firm’s intellectual property crown is Slingo, a 30-year old game that combines slots and bingo. In FY22, the company added 12 new games to its Slingo Originals portfolio, bringing the total to 65.

Business has been good over the past year and the Gaming Realms share price has jumped 23% in 2023.

Highlights include a 27% revenue increase in FY22 to £18.7m and a 34% rise in EBITDA before share option and related charges to £7.8m.

The company’s revenue compound annual growth rate is nearly 39.5% for the 2019-22 trading period. Plus, the group turned a healthy pre-tax profit of £3.5m last year — a 224% increase on FY21.

North American expansion

Perhaps the most exciting development for the company is the potential for growth in its licensing business across the Atlantic. North America is the firm’s largest territory for content licensing.

It recently launched in Ontario, Quebec and Connecticut, boosted its market share in Michigan and Pennsylvania, and continues to expand its presence in New Jersey — the first US state the company entered, back in 2017.

The regulatory environment in the US is improving for iGaming companies. Some analysts expect the US could be the world’s largest sports betting and iGaming market by 2026. Gaming Realms is in pole position to benefit from this trend.

A risky industry

However, this is a challenging sector to be in. The approach to regulation in many jurisdictions is in a constant state of flux. This exposes the company to the possibility of hefty fines if it falls foul of the rules.

What’s more, the firm’s prospects could quickly change if lawmakers in key territories decided to take a more stringent approach towards real money games.

Plus, some people may have moral concerns about investing in a company that derives its income from gambling. Accordingly, this penny stock won’t necessarily be an appropriate option for all.

Why I’d buy this stock

As things stand, I’m bullish on Gaming Realms’ growth prospects. Its progress in the colossal North American market is promising and recent financial results show the company’s investment in its intellectual property portfolio is bearing fruit.

Overall, at 31p, this stock looks like a good buy for me. If I had spare cash, I’d add it to my portfolio today.

The post 1 penny stock under 31p that I’d buy today appeared first on The Motley Fool UK.

Gaming Realms

A change to gambling legislation is a constant threat to Gaming Realms (LSE:GMR). But the profits potential here remains immense as online gaming goes from strength to strength.

This UK share builds and licences casino games that are played on mobile phones and tablets. Its most famous franchise is the Slingo line of games, the popularity of which helped drive group revenues 27% higher in 2022.

Unsurprisingly Gaming Realms remains committed to developing its cash cow. It launched three new Slingo titles last year and signed an intellectual property (IP) agreement to release a Tetris-based game later in 2023.

I also like the company’s ongoing commitment to rapid expansion to boost user numbers. It has launched with 13 new partners in the year to date (including with Bet365 in the UK and Betway in Pennsylvania). I’m especially excited by plans for further launches in the gigantic US marketplace.

OnTheMarket

The dangers to Britain’s homes market remain severe as interest rates rise and the cost-of-living crisis endures. Property listings business OnTheMarket (LSE: OTMP) is one UK share that could suffer if housebuyer appetite remains weak.

Yet encouragingly the company continues to grow revenues at a rapid pace. And its technology-led approach is proving popular with major estate agency chains.

OnTheMarket is moving away from simply providing property listings. It’s designing technologies that provide a one-stop-shop for estate agents and housebuilders, its platforms also providing data and information management and marketing functions.

This provides considerable potential for earnings. And pleasingly the company has a strong balance sheet to help it develop its suite of tech products. It had cash of £10.4m on its books at the end of 2022.

Rainbow Rare Earths

Profits at commodities businesses like Rainbow Rare Earths (LSE:RBW) are very vulnerable during economic downturns. As consumers and businesses feel the pinch, the amount they spend on products loaded with metals can be impacted.

But this wouldn’t deter me from investing in certain mining stocks given that we’re likely on the cusp of a new ‘commodities supercycle.’ Demand for rare earth minerals (such as neodymium and praseodymium) is tipped to grow strongly too as the manufacturing of electric vehicles and renewable energy projects both heat up.

Rainbow Rare Earths owns the Phalaborwa mining project in South Africa and Gakara asset in Burundi. Both of these are significant sources of such minor metals. They also have other benefits like close proximity to good infrastructure and low cost bases when production begins. The profits potential here is colossal.

Mine development is a risky business and setbacks can place huge strain on the balance sheet. But Rainbow is well capitalised following a recent $7.52m share placing that will fund Phalaborwa through to early 2024. This provides an added layer of protection to investors and makes the stock worthy of serious attention, I feel.

The post 3 penny shares I’d buy to hold for the next 5 years! appeared first on The Motley Fool UK.

Here are four top penny stocks Id happily sink £500 into right now.

A high-energy growth stock?

Hydrogen power could be a massive growth market in the 2020s as people seek cleaner energy sources. It’s why I’d buy AFC Energy (LSE: AFC) for my portfolio. It’s a company whose alkaline fuel cells are used to power vehicles in the Extreme E racing series.

AFC’s contribution to Extreme E (for which it extended its contract last month) has given it a stage to show off its technology and prove its reliability. It’s a strategy that could reap huge rewards because sales of hydrogen-powered vehicles are tipped to boom.

Indeed, Transparency Market Research thinks demand for hypercars — a category which is leaning more heavily on hydrogen technology to improve speeds — will grow at an annualised rate of 11.6% between now and 2031.

It’s possible that AFC could enjoy soaring demand for its products for other applications as well. Just this week, the business announced an agreement with Spain’s ACCIONA to deploy its first hybrid fuel cell at a site near Cádiz, Spain.

AFC Energy faces intense competition from other providers of energy-producing technology. But this is still a penny stock that’s packed with potential as the clean energy revolution takes off.

Going for gold

I think gold stocks remain an attractive asset class to buy today. Buying bullion-producing companies rather than the metal itself exposes investors to the often-risky mining sector. Exploration, development and production setbacks that smack profits can be common.

That being said, the pull of big dividends still makes many gold producers highly attractive, in my book. This is why I’d buy shares in Centamin (LSE: CEY) today. The dividend yields here sits at 5% for 2022 and 5.1% for next year.

Gold prices recently exploded to their highest since late 2020 as tension surrounding the Ukraine war intensifies. At $1,940 per ounce, it seems that the yellow metal could be primed for a charge to fresh record highs in the days ahead too.

But it’s not just geopolitical and macroeconomic worries that are spooking investors as the West and Russia collide. Gold prices have been steadily gaining ground because of fast-rising inflation in parts of the world. This is a problem that threatens to worsen too as energy values increase along with prices of other key commodities, from wheat and aluminium to coffee beans.

Consumer prices are rising at a rate not seen for decades in the US and the UK. And data earlier this week showed such inflation hit 5.8% in February. This was up sharply from 5.1% a month earlier and the highest level on record.

I wouldn’t just buy Centamin shares because of the positive near-term outlook for gold prices however. I think the penny stock could deliver excellent shareholder returns as it steadily ramps up annual production from its African assets. It is looking to produce half a million ounces of gold each year from its Sukari mine.

Riding the gaming revolution with penny stocks

The mobile gaming segment looks set for further strong growth in the post-pandemic era. It’s why I’m considering buying Gaming Realms (LSE: GMR) today. This penny stock develops and licences games software to betting companies and broadcasters. The business is perhaps best known for the blockbuster Slingo line of games.

I like the aggressive steps the business is taking to exploit this theme as well. The US market is opening up rapidly to the gambling industry and Gaming Realms last year launched its products into Pennsylvania and Michigan. Its rapid international expansion has also seen the software giant launch its titles in the Netherlands and Spain in more recent months.

Gaming Realms added dozens more licensing partners to its books in 2021. This helped revenues and adjusted earnings rise 27% and 70% respectively year-on-year.

But I am concerned about the threat of tightening regulations to the gambling industry and, by extension, to Gaming Realms. Last week, UK regulators slapped 888 Holdings with one of the largest fines in history in a sign that patience is beginning to wear thin. But, on balance, I still think the potential benefits of owning Gaming Realms outweigh the possible risks.

Things are warming up

I think demand for insulation products could also soar as fears over the climate crisis increase. This is why I’m considering loading up on Kingspan Group (LSE: KGP) shares right now. The business sells a wide range of building materials across 70 countries, but is perhaps best known for its energy-saving products.

Kingspan reckons the total energy saved by its insulation boards, panels and similar products between 1993 and 2018 was equivalent to 20m cars being taken off the road. The huge difference that these types of products can make to reducing carbon footprints means people are spending small fortunes to improve their home insulation. Businesses are also spending increasing amounts here to help them meet their carbon targets.

Sales of Kingspan’s insulated panels leapt 45% year-on-year in 2021. And I think they could continue rising strongly too as people take steps to protect themselves from soaring energy costs. A recent study showed that Britons living in F- and G-rated homes on the energy efficiency scale stand to be £390 worse off than those in C-rated properties when new price-cap rules come into force in April.

It’s true that Kingspan could see demand for its materials sink if the global construction market slows. But, on balance, I still think the pivotal role of its products in tackling climate change could help me make solid long-term returns.

The post £500 to invest? 4 penny stocks to buy today appeared first on The Motley Fool UK.

Demand for the penny stock’s dairy products could fall sharply as diets which contain no, or lesser amounts, of animal-derived products grows. But I think sales of its nutritional supplements and ingredients might explode as participation in sports and fitness activities takes off. And this provides plenty for UK share investors like me to get excited about.

Glanbia is the largest producer of whey isolate in the US. It also makes products under the Optimum Nutrition label, the world’s most popular performance nutrition brand. The sports nutrition market is tipped for monster growth (Grand View Research, for example, thinks the market will be worth $34.5bn in 2028, versus $16.7bn today). And it’s focused on global expansion to make the most of this opportunity.

Taking steps for growth

I also like the steps it’s taken to embrace the e-commerce growth boom. A whopping 70%-plus of revenues at its Glanbia Performance Nutrition were generated online last year, up from below a third just five years earlier.

Today, Glanbia changes hands on a price-to-earnings (P/E) ratio of 22 times. This isn’t exactly low and could prompt a sharp share price reversal if profits don’t grow as expected. Still, I think its extensive exposure to one of the fastest-growing consumer industries makes it worthy of a premium rating.

A penny stock for the gaming boom

Grabbing a slice of the mobile gaming market is another good idea, in my opinion. This is where Gaming Realms (LSE: GMR) comes in, a tech business which creates and licences casino games for use on mobile phones and tablet PCs. Its most famous product is the line of highly-popular Slingo games.

Gaming Realms is making big strides in North America and this week it announced its provisional iGaming Supplier Licence in Michigan had been upgraded to a full licence. This matches the licences it already has to operate in Pennsylvania and New Jersey. The business also has submitted an application to operate in Ontario.

Revenues are soaring!

In other encouraging news Gaming Realms said that content licensed revenues had leapt 35% year-on-year in the third quarter. It added too, that its new licensing and games pipeline “has also grown”.

The business has terrific opportunities for growth across its North American European markets, and I’m impressed by the pace at which its expanded its list of partners over the past year alone (industry heavyweights like 888casino.com, DraftKings and Paddy Power Betfair, for example, all launched Slingo Originals titles in 2020).

Of course gaming is a highly-regulated industry and any legislative changes could have a significant impact on Gaming Realms’ profits. However, as things stand today I think there’s a lot to be encouraged by here. Like Glanbia, I’d happily buy it for my shares portfolio today.

The post 2 penny stocks to buy straight away appeared first on The Motley Fool UK.

As a long-term investor however, I’m not put off by the prospect of any short-term price volatility. This is because I do proper research to identify quality before buying UK shares of any price. This way I can be confident that, over an extended time horizon, any penny stocks I buy will rise in value just like any other stock. And I can potentially make lots of money in the process.

With this in mind, here are two top penny stocks I’m thinking of buying for my Stocks and Shares ISA today.

A gaming great

Online gambling has gone from strength to strength in recent years. City analysts don’t think this phenomenon is anywhere close to running out of road either, which is great news for Gaming Realms (LSE: GMR).

This UK penny stock designs and licences casino games for mobile devices, putting it in one of the box seats for the next decade. Fortune Business Insights reckons the internet betting market will be worth $158.2bn by 2028. This compares with the $74.2bn it’s been estimated at this year.

Encouragingly, Gaming Realms is making sound progress in the gigantic US marketplace too. It’s been granted supplier licences this year in both Pennsylvania and Michigan. And last month, it launched its Slingo Originals games in Michigan with industry giant BetMGM.

It’s true that Gaming Realms operates in a highly-regulated environment, representing a clear danger to future earnings. But the popularity of its brands and its games, allied with its ambitious expansion in this fast-growing marketplace, should still make its investors handsome returns, in my opinion.

Catch a top penny stock

Fishing has long been a popular British pastime, and the number of people taking up the hobby has boomed since the Covid-19 outbreak last year. The Environment Agency sold a staggering 1.02m individual freshwater rod licences to adults living in England last year. This was up 16% on an annual basis and bodes extremely well for penny stock Angling Direct (LSE: ANG). Sales at the retailer rocketed 27% higher in the 12 months to January.

Angling Direct isn’t just making a splash in its home markets however (turnover here rose 31% last year). Revenues in its core European territories of Germany, France and The Netherlands soared between 29% and 44% in fiscal 2021.

The penny stock’s strong online proposition has also helped to turbocharge revenues growth over the past 12 months. As has its position as a one-stop shop for everything the fisherman needs to cast off.

But competition is fierce and the likes of Amazon pose a severe threat to future profits. However, I still think Angling Direct has the mettle to also generate great shareholder profits in the years ahead.

The post 2 of the best penny stocks to buy in a Stocks and Shares ISA appeared first on The Motley Fool UK.