But here’s why I think they could deliver the kind of significant earnings growth over the next decade that some penny stocks deliver.

The Gym Group

In recent months I’ve noticed a steady pick-up in the number of people using my local gym. Sometimes I’m having to wait to use the chest press, treadmill, or one of its other many fitness contraptions.

I don’t think it’s a coincidence that my club is owned by The Gym Group (LSE:GYM). Its cut-price no-contract business model is attracting huge numbers of people during this cost-of-living crisis.

Latest financials last week showed revenues up 18.5% in the six months to June at £99.8m. This was driven by member numbers rising to 867,000, a jump of 77,000 from the turn of the year. Gym attendance remains stable even during downturns, and this almost penny stock is booming as people switch to cheaper operators.

The importance of value across the retail and leisure sectors has been growing strongly over the past decade. It’s a trend that has much further to run and makes The Gym Group — which owns 230 clubs across the country — a top buy. That’s despite the impact of rising costs on its bottom line.

Andrada Mining

Purchasing lithium stocks could be another good way to build a winning portfolio. Demand for the silvery-white metal looks set to boom as sales of electric vehicles take off.

Goldman Sachs believes there will be 73m of these vehicles on the world’s roads by 2040. Yet the current mine development pipeline suggests that lithium supply will struggle to keep up with demand, at least over the next decade. In this landscape, producers of the metal should be able to command a premium price for their product.

Andrada Mining (LSE:ATM) is one lithium stock I’m considering buying to capitalise on this. It owns the Uis lithium mine in Namibia, an asset from where it already produces large amounts of tin and from where it recently made its first bulk lithium concentrate sale.

Andrada has described Uis as “a globally significant lithium and tin resource.” Current mineral resource estimates suggests it contains 138m tonnes, but exploration work is ongoing to lift this figure to 200m.

The AIM company also owns a string of other exciting exploration and development assets in Namibia. Testing at its Spodumene Hill project has also shown high-grade lithium intersections that “suggest the presence of significant spodumene mineralisation.”

Investing in African mining companies carries extra risk for investors. Political instability can be commonplace in the region and mining operations can be disrupted as a result. But on balance I think this stock could be a great way to make large long-term returns.

The post 2 ‘nearly’ penny shares to buy in a winning portfolio! appeared first on The Twelfth Magpie.

Mind Gym

The spotlight on workers’ mental health — as well the impact of poor mental health on company productivity — has intensified in the post-Covid climate. It’s why I think Mind Gym (LSE:MIND) could experience brilliant earnings growth.

This behavioural science consultancy goes into companies to improve employee wellbeing and enhance leadership culture. It saw revenues rise 12% during the 12 months to March. And it is likely to keep stacking up business wins as burnout across the global workforce picks up.

A survey by business loan provider Money.co.uk illustrates the scale of the problem. It shows that almost half (47%) of employees said they had reduced their level of effort at work over the past one to two years.

Some 63% of UK workers embrace ‘Bare Minimum Monday’, the report adds. A similar percentage have said they also take it easy on Fridays to avoid burning themselves out.

I like Mind Gym because it has a strong balance sheet to help it continue innovating to win contracts with blue-chip companies. It had cash of £7.6m on its books as of March, levels that beat the firm’s prior expectations. It also has a £10m debt facility that remains undrawn.

I’m conscious that trading here could be turbulent in the near term. A tough macroeconomic environment could see companies scale back spending in areas like staff motivation.

But I believe this is baked into Mind Gym’s rock-bottom valuation. City analysts expect earnings here to rise 127% in financial 2024, leaving the penny stock trading on a forward price-to-earnings growth (PEG) ratio of 0.1.

A share is considered undervalued if it trades on a reading below 1.

Andrada Mining

Buying some lithium stocks is also attractive to me as electric vehicle (EV) sales explode. Andrada Mining (LSE:ATM) is one such company I think is a top buy right now.

Formerly known as known as AfriTin, the company owns the Uis lithium mine in Namibia, an asset it has described as “a globally significant lithium and tin resource”. Tin production has commenced here and rapid expansion is planned to supercharge output. Completion of a lithium pilot plant there is also scheduled for next month.

Andrada also owns the nearby Nai-Nais mine, a project that the company announced this week has just produced maiden lithium concentrate. Chief executive Anthony Viljoen said that the milestone “moves us one step closer to full-scale lithium production”.

Lithium demand is tipped to take off as EV sales steadily rise. The International Energy Agency thinks global sales of these low-carbon vessels will hit 14m in 2023, up 35% from last year’s levels. Andrada could be one of the best UK shares to capitalise on future growth.

Of course the firm’s earnings could disappoint if it encounters mine development problems. But on balance I believe its portfolio of outstanding metal projects still make it a top penny stock to buy.

The post 2 penny stocks I think are screaming buys! appeared first on The Twelfth Magpie.

Andrada Mining

Buying small-cap mining shares can be extremely risky for investors. Difficulties at the exploration, development and production stages can be common. And they can create a huge financial strain, leading to more debt being taken on, or shareholders being tapped for cash.

Yet buying smaller mining firms can have enormous upside as well. Andrada Mining (LSE:ATM) is one particular UK share I’m looking at.

This is because its assets in Namibia give investors exposure to metals that will play a critical role in growing green technology and consumer electronics markets. We’re talking about tin, lithium, tantalum and copper.

Andrada is already producing tin from its Uis mine, and it is rapidly scaling up production to meet rising demand. The firm has described the asset as a “globally significant” source of lithium and tin. On top of this, the penny stock owns various exploration projects in the country.

Helium One Global

Helium demand also looks set to surge over the next decade. It’s widely used in sectors including electronics, telecoms, computing and nuclear energy. So trends like increasing digitalisation and demand for low-carbon power should drive consumption northwards.

At the same time supply growth is failing to catch up. This is why Helium One Global (LSE:HE1) could prove a wise investment. Prices of the essential gas — which this penny stock is due to begin drilling for in Tanzania during the third quarter — might be about to soar.

The firm’s Rukwa project boasts one of the largest helium deposits on the planet. And it owns two other highly promising assets in the country. Helium One is well capitalised following a £9.9m fundraising in December. But remember that unexpected costs could heap pressure on its balance sheet later on.

Alternative Income REIT

For more risk-averse investors, Alternative Income REIT (LSE:AIRE) might be a more attractive option. This penny stock owns a variety of different properties including hotels, retail parks, gyms and care homes.

Revenues in one or two of its sectors can struggle during economic downturns. But the broad range of industries it operates in helps reduce the impact of this on shareholder returns. So does the company’s exposure to traditionally stable sectors like healthcare and education.

Small-cap shares rarely provide investors with passive income. Any cash they have left over is typically ploughed back into the business to generate future growth.

But Alternative Income’s status as a real estate investment trust (REIT) means it can be relied on to provide regular dividends. Sector rules dictate that such shares pay a minimum of 90% of rental profits out to their shareholders.

It means the business has a strong record of paying above-average dividends. Its trailing dividend yield sits at 8.4%.

The post 3 top penny stocks I might buy for my ISA in May! appeared first on The Twelfth Magpie.

Andrada Mining

Digging for commodities can be a problematic and expensive process right from the exploration phase. Junior miners are especially vulnerable to setbacks as they don’t have broad mine portfolios or strong balance sheets to absorb trouble at one or two assets.

But I believe the possible benefits of owning Andrada Mining (LSE:ATM) shares could outweigh the risks. This is because demand for the lithium, tantalum, and tin that it produces in Africa is projected to soar as the electric vehicle and consumer electronics markets boom.

The quality of Andrada’s flagship Uis mine in Namibia also makes the company a great investment in my book. The company has described the asset as “a globally significant lithium and tin resource” and this month upgraded its lithium resource estimates there to 587,000 tonnes. This was up 30% from prior forecasts.

Staffline Group

Recruitment and training business Staffline Group (LSE:STAF) trades on a price-to-earnings (P/E) ratio of just 10 times today. As someone with a great love of value stocks, I’m considering adding it to my portfolio right now.

Recruiters like this can see profits tumble during economic downturns. When company profits come under pressure, hiring activity can freeze. Yet this penny stock’s focus on the more resilient temporary employment market could cushion this blow.

In fact, Office of National Statistics data this week suggests Staffline could remain busy as the cost-of-living crisis endures. It showed 113,000 economically inactive people returned to work between October and November.

Staffline’s revenues could also rise if unemployment increases and demand for its training services increases. A surge in the number of people seeking to change career in this post-pandemic landscape could also fuel income here.

Gensource Potash

Gensource Potash (LSE:GSP) has significant appeal to me as a long-term investor.

The increasing global population means that demand for food is also trekking higher. Furthermore, improving wealth levels in emerging markets is also rapidly boosting consumption for edible goods. This means that sales of potash — a key ingredient in fertiliser production — are also rising.

Encouragingly for investors, Gensource has ambitious plans for its Tugaske potash project in Canada. Late last year the business hiked its production capacity target to half a million tonnes of material a year.

Now there is some uncertainty surrounding financing of the mine’s development. Last month chemicals giant Helm withdrew its 33% ownership offer for the company Gensource has created to run Tugaske (KClean Potash). The penny stock said this was due to “an unappealing risk-return ratio for new investors”.

But I still believe the potential long-term benefits make the small cap a compelling buy. Indeed, the bright outlook for the potash market means sourcing capital from private equity may not be an obstacle.

The post 3 penny stocks I’d buy for my Stocks & Shares ISA today! appeared first on The Twelfth Magpie.

Here are two I think will recover strongly from current weakness and deliver excellent long-term returns for my portfolio.

Science in Sport

Price: 54p per share
Market cap: £77m

Broader demand for goods and services drops when times are tough for consumers. But I believe Science in Sport (LSE: SIS) might prove more resilient than many UK shares. This penny stock manufactures protein powders, energy gels, and other nutritional supplements that help keep sporty people going.

People don’t drop their sports and fitness goals when times get tough. Even if they can’t afford to go to an expensive gym they can switch to a low-cost operator. Or they can work out in other ways like road running using home fitness equipment. So I’m expecting demand for Science in Sport’s products to remain solid.

From a growth perspective, I like the firm’s strategy of developing the brand through partnerships with elite sports teams and organisations. It has teamed up with 330 such bodies, and progress with NBA basketball and NFL football teams in 2021 helped drive US revenues 50% higher last year.

Intense competition is likely to remain a threat to Science in Sport. But I’m convinced the company could still deliver terrific shareholder returns from its rapidly growing market. Grand View Research analysts think the sports nutrition sector will almost double in size between now and 2030 (to $82.3bn).

AfriTin Mining

Price: 6.8p per share
Market cap: £75.7m

Commodities producers like AfriTin Mining (LSE: ATM) aren’t usually popular shares when economic conditions worsen. The prices of the stuff they produce can fall off a cliff when fears over demand increase. AfriTin’s recent rapid price declines illustrates this point and poses a big threat to this particular mining stock.

I’m still thinking of buying AfriTin shares today though. This is because I’m focussed on the company’s long-term profits outlook and I expect sales of its tin to rocket in the years ahead. I’m tipping consumption of the soldering metal to increase as demand for consumer electronics surges.

I think this tin miner could be an especially lucrative way to exploit the coming ‘commodities supercycle’ too. For one, expansion of its flagship Uis project in Namibia should lift tin production significantly in the years ahead. Expansion of the current operation should lift output from 850 tonnes per year to 2,800 tonnes in the medium term.

I also like the business because work at Uis will also give it significant exposure to lithium and tantalum. AfriTin hopes drilling work at the site will lift the resource estimate from 71.54m tonnes of tin to 200m tonnes of tin, lithium, and tantalum. Lithium demand should rise strongly along with sales of battery-powered electric vehicles.

The post 2 penny stocks to buy as market volatility returns! appeared first on The Twelfth Magpie.

Riding the electric car boom

Surging tin prices have helped blast AfriTin Mining’s (LSE: ATM) share price through the roof. The penny stock recently closed at record peaks of 7.8p per share but has sunk from these highs due to choppy metal prices. I think this could represent an attractive buying opportunity.

As its name suggests, the business is involved in producing tin in Africa (and more specifically Namibia). This is a commodity that could be set to soar in value as demand for consumer electronics and electric vehicles (EVs) takes off. The metal that AfriTin produces is being used increasingly as a soldering material instead of lead.

But the commodities producer is about more than just tin. AfriTin has spoken previously about adding tantalum and lithium to its product suite and this month announced it had found spodumene near its flagship Uis asset. The lithium-bearing mineral could significantly boost AfriTin’s exposure to the booming EV market where it is used to make batteries.

AfriTin has plenty of potential, then, but its shares don’t exactly come cheap. The business trades on a forward price-to-earnings (P/E) ratio of 23.3 times. It’s the sort of premium rating that could prompt a sharp share price reversal if the company experiences trouble.

However, this is a risk I could be willing to take given the excellent long-term potential for its metals.

A safe-haven penny stock

The Covid-19 crisis and tragic events in Ukraine show that holding gold, gold-based financial instruments, or precious metal-producing stocks could be a good plan. History shows that bullion prices rise during social, economic, and political crises when riskier assets like shares sell off. So having a gold-based investment at all times can help protect one’s portfolio.

This is why I think holding Shanta Gold (LSE: SHG) shares could be a good idea for me today. Buying this particular gold miner gives me the chance to receive dividends along with the benefit of riding the gold price. This is something that owning bars, coins, or a metal-backed financial instrument like an exchange-traded fund (or ETF) doesn’t. Oh, and the yield at Shanta sits at a healthy 2.3% for this year.

Gold prices came within a whisker of reaching new highs last week as Russia intensified its operations in Ukraine. The conflict is ongoing and so fresh attempts could be around the corner in the coming days. Regardless, I think bullion will take out the current record above $2,070 per ounce as inflationary pressures accelerate. The Bank of England, for example, now says British consumer prices could rise more than 8% later this year.

Owning mining shares like Shanta Gold means that investors burden themselves with the extra risk of production problems that could decimate profits. But it’s my opinion that the potential long-term benefits of owning this particular Tanzania-focussed miner still make it a great buy for my portfolio right now.

The post 2 top penny stocks to buy right now appeared first on The Twelfth Magpie.

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.

The post 2 penny stocks to buy in September appeared first on The Twelfth Magpie.