Penny shares are an effective way to buy shares from smaller organisations in a large quantity by only spending a few pounds. They are seen as a good return on investment for the future, even though they have a significant risk.
This article will give you an in-depth look into the penny stock markets, focusing on the best penny stocks UK for the year 2021. If you are an investor or a stockbroker, this article will help you better understand the best penny stocks UK to invest in the 2021.
What are Penny Stocks?
Penny stocks refer to companies that trade their shares by a value of below £1 per share in the UK. Their market cap is also below £100 million in the UK. These companies are tiny in size, and their share prices are low.
Penny stocks are typically connected with little organisations and exchange inconsistently. It means they have an absence of liquidity or prepared purchasers in the commercial centre.
Therefore, financial backers may think that it is hard to sell stock since there may not be any purchasers around then. In addition, due to the low liquidity, financial backers may experience issues discovering a value that precisely mirrors the market.
Penny stocks are known as risky investments than larger businesses. Because there is less growth in these smaller companies. The frequency of end product or service generation is also a significant confusion. They are all listed in the FTSE AIM Index UK.
Since we now know what a penny stock is, let us look at some of the best penny stocks UK 2021 for investors and traders.
Best Penny Stocks in the UK, 2021
One of the key reasons for people to buy penny stocks is because they are surprisingly cheap! Therefore, it allows people to buy them in large quantities. Moreover, the buyers are very optimistic that these share prices would increase to the maximum in the future.
We all know that the year 2020 and 2021 has been nothing less than a rollercoaster ride. Due to COVID-19, a lot of small and big companies are facing financial difficulties. But amidst all these problems, some companies stood firm.
Their penny stocks values have increased to a significant amount since last year. It is an indication that these companies are operating efficiently because COVID-19 has caused many businesses to sink.
Therefore, below is a list of those top 10 companies with the best penny stocks in the UK that investors and traders should consider buying.
Galantas Gold Corp
It is an Irish mining company. It has a listing in the FTSE AIM-All share in the UK. Galantas claims to create an open-pit gold mine close to Omagh, County Tyrone, Northern Ireland. The mine additionally delivers silver and lead as a result.
Moreover, the organisation’s mine has gotten grants to keep mining underground, with about a kilometre of underground improvement finished in December 2020. In addition, part of a boring investigation program was completed in 2020, with a critical expansion in assets found.
The organisation means to proceed with that program in 2021, which could justify its short offer cost increment. The share price movement during 2020, from January to December, was extremely high.
Renewi’s comprehensive set to misuse the fight against environmental change as officials reused towards the front of their green plans.
Also, their well-structured business plan and environmental-friendly goals have caused their stock prices to increase too. This corporation has done its best to showcase its corporate social responsibility, which has caught people’s attention.
Maestrano Group is a data analytics company. They are involved in cloud-based technology, data analysis and other IT-related disciplines. This company had a return on investment of around +310.28% over the last year.
The organisation also marked a few arrangements in 2020 and extended its compass by getting new merchants for its innovation. For instance, Network Rail has granted an agreement to the business for its computerisation innovation.
Additionally, in July 2020, it joined its first North American wholesaler for its Nextcore auxiliary. It plans and makes lightweight robots. In future, it plans to join a Dutch organisation. This new joint venture will help increase sales volumes for both companies and broaden the tech network.
It is a copper and silver miner company located in the UK. The share price movement during the year for this company was around +394%. Also, the price per share currently is 0.875 per share. However, the share prices constantly fluctuate. Therefore the costs will not remain constant. Nevertheless, it shows that they have a successful and growing business.
The company started several new projects last year outside the UK. The projects are very diversified, and the company also plans to work with other metals in the future, such as gold, rubies, emeralds, etc.
Moreover, not just the UK, they want to set up plants in many different geographical areas. It would give them a better return every year and build their company’s reputation. So investors and traders should keep them an option when buying penny stocks because the return on investment is high.
Eve sleep is a comfort providing company. It means they produce and sell mattresses, pillows, cushions, beds and several other bedding products. Their business has undergone few changes over the last few years. Their motive was to make their business very sustainable.
However, their “new business startegy” seemed to work well. Because last year, their company saw a positive growth on the income of around 6% to £25.2m. It is an outstanding figure for a company that has just undergone few changes.
Besides, to pull up a company that has massive competition on the market is a tremendous job. Although, they did go through some financial difficulties after the Covid-19 hit.
But, they did pull themselves back into the market and saw remarkable growth during the last half of 2020. Traders and investors should keep this company their option because these people know how to fight back gracefully! It is one of the great qualities in a company.
Alba Mineral Resources
Alba Mineral Resources is a small mining organisation advancing a few activities focusing on various items. However, in the wake of attempting to foster its mining projects before 2020 because of the Covid and lockdown gauges, the offer value discovered energy as it began to convey genuine advancement.
Keeping that in mind, the organisation reported it had begun underground mass inspecting and a drill program on the Clogau gold venture in Wales in September 2020, after getting endorsement the prior month.
On top of this, an investigation program on Clogau began in October 2020, aiming to give the understanding expected to choose whether resuming the old mine is beneficial. The investigation work on Clogau could propel shares higher if fruitful as it will attempt to discover new wellsprings of gold in the old mine.
They have raised around a large amount of equity from the year 2019 to 2020. Their total equity increased from £8.38 to 10.05 million on 30th November 2020. Their profit after tax has increased from £1.31 to £2.08 million. This increase in profit can help us conclude that Alba Mineral Resources is one of the best penny stocks in the UK for 2021.
Conroy Gold and Natural Resources
Shares of Conroy Gold and Natural Resources started to increase in mid-2020. It is when the company revealed it had signed a deal with Anglo Asian Mining. Anglo Asian Mining signed a contract to help step up their gold mine, located in Ireland.
Anglo Asian Mining is a well-known producer of silver, gold and copper in Azerbaijan. They will spend around €2 million on Conroy Gold and Natural Resources. In return, they will be taking around 17.5% of their revenue from the investment.
The joint venture with Anglo Asian Mining can be one of the primary assets for Conroy. It will give them more recognition in the Asian market as well as the UK and European markets. More recognition means making a more prominent position in the industry.
On top of that, they can expand their business instead of paying for the work done. Conroy mentioned that Anglo AsiansMoreover, our expressed intentions to go forward with the project as soon as they can. It suggests that the development could speed up in 2021.
Moreover, Conroy had positive growth in the year 2020 of around +506%. Therefore, based on their recent development and the upcoming future project, investors and traders can conclude that this company will be a good option while buying the best penny stocks in the UK.
This company operates towards a very noble cause. ValiRx is a scientific company that produces medicines and other clinical treatment equipment for cancer patients. You can call it a biotechnology company. They have acquired immense respect and appreciation in the medical industry.
However, Amidst so many bankruptcy and insolvency issues before 2020, they have managed to fight back and increase their company revenue last year from Jan to December 2020. As a result, their overall revenue increased to +40%.
Unlike other businesses facing difficulties due to the COVID-19 pandemic, the scientific companies were almost unaffected.
They gained more than 145% from 1st week to the last week of September 2020. One of the main reasons is because they came up with a chemical or substance that cures prostate cancer. It is called VAL201. They have already conducted some trials, and during the process, no patients had any adverse reactions to their bodies.
Moreover, investors and traders should also keep in mind that biotechnology companies will never see a prolonged recession. As long as humans are on this planet, the need for new treatment and procedures will remain intact. It is why ValiRx is one of the best penny stocks in the UK, according to us.
Renold is an industrial chain company located in the UK. Even though their market capitalisation is low, they have immense potential and have created an excellent reputation. The products that they produce are also very diversified.
Their business runs on innovation and high technological products. These include- theme park ride, escalators, capsules, underground railway, etc. Their products are very high quality, and people have built a sense of trust in their brand.
In addition, their products will never go out of style because they are necessities in our modern society. Our world is becoming tech-friendly, which means companies like Renold have excellent scope to shine brighter in the tech world.
Moreover, they are constantly looking for better ways to upscale their products and build a more robust market reputation. Due to this, they always come up with better products and will continue doing so in the future.
It is because Renold is a very cheap stock, according to us, even though there are some risks associated with it. Although, they do have many pension liabilities, preventing them from increasing their shareholder’s dividends in the future. But, when it comes to buying the best penny stocks in the UK, they are a perfect option.
Lamprell is an energy-providing company. Its purpose is to provide the best solutions and in-class project services for the energy industry. They always try to implement their strategies very responsibly and work towards the company’s core values.
In addition to this, they also provide procurement, engineering and construction services to the renewables and oil & gas energy industries. These are involved in building high-quality platforms, foundations, etc.
Even though they focus on the EPC models of a particular project, they also partner with installation and transportation services to provide a seamless service to their customers.
Moreover, the organisation has situated itself as one of the leading renewable energy suppliers to the environmentally friendly power industry in recent years.
Associations across the UK are resolving to burn through many pounds over the following not many years on environmentally friendly power projects. So it could be a help for Lamprell.
In our opinion, the fact that makes Lamprell unique from other energy companies is that it focuses on green energy. It could prove to be very profitable for them in the future because the whole world is moving towards energy saving. They can go for joint ventures with other companies located overseas too.
How To Be The Best Penny Stock Trader?
Trading penny stocks is not the simplest thing to do. Some people might think that they can become billionaires by investing a few pounds in penny stocks. But, there is one thing that not traders and investors should think about before investing in penny stocks.
That is, “Risk”. Everything in this universe has a risk attached to it. People sometimes recklessly spend a lot of pounds on different penny stocks without even doing their research properly. Therefore, it is essential to get some background knowledge about the company you are investing in.
Moreover, start with cheap stocks and aim for a lower return on investment. You should refrain from spending a lot of money on many penny stocks at once or spending it on expensive ones.
However, some online courses could help you become an experienced penny stock investor or trader. These courses would prepare you to become a professional penny stock trader, and you will be able to make a list of your own best penny stocks in the UK.
For example, you can get enrolled in a Penny stock trading course. This course is entirely online-based. Upon completion, you will receive a certificate and obtain accreditation from a professional penny stock trading. The modules in this course are designed to help you learn from A-Z of the penny stock industry and also help you learn about the best penny stocks in the UK.
To summarise, penny stock trading gives people of all ages and income groups an excellent opportunity to invest money and expect something in return. So whether you are just in college or a developed professional, you can always afford to spend on penny stocks.
This article will give you a piece of in-depth knowledge about the penny stock market overview and assist you in knowing about some of the best penny stocks in the UK that you can consider investing in the year 2021.