4 “almost” penny stocks to buy
These cheap UK stocks are changing hands just above the £ 1 penny limit. Here’s why I would buy them for my own stock portfolio right now.
Safe as houses
I consider Residential Secure Income REIT to be one of the safest real estate stocks in the UK. It works with local communities and housing associations to set up condominium and rental housing. And so, unlike providers of retail, office or industrial space, revenues tend to be mostly stable during economic recoveries. and drops.
This old penny stock is not entirely risk free as massive shortages of construction products threaten to disrupt construction and increase costs. Still, at the current price of 109p, I think it might be too cheap an action to miss. It trades on a forward price / earnings growth (PEG) of 0.5 and pays a big dividend of 4.7%.
Central real estate
Tritax Eurobox is another white-hot UK property stock that I would buy now. I already own the British cousin of this “almost” penny stock, Tritax Big Box REIT, in my stock portfolio. Indeed, its role as a supplier of logistics spaces and big box warehouses should enable it to generate large profits as e-commerce in the United Kingdom accelerates.
I think Tritax Eurobox (which trades at 119p) will prove to be a success as well, as online shopping in its main markets, Germany and Belgium, is also taking off. In addition, the entry of this real estate title in Poland also provides investors with exposure to rapidly growing emerging markets.
I would buy Tritax Eurobox despite the threat that changing business rules following Brexit could pose to some or all of its tenants. This could have an impact on future rents.
I own shares in a few FTSE 100 home builders (Barratt and Taylor wimpey, if you ask). And I think “almost” penny stock Properties of Springfield – which is trading at 155 pence – is another great way to play in the strong UK property market.
UK construction rates are failing to come close to demand, pushing house prices higher and higher. It is true that the withdrawal of the stamp duty holiday could come back to haunt this British part at a low price.
The data is already showing that property values are starting to cool. But I think the escalating mortgage wars between UK lenders could make up for this loss and keep home buying affordable. As is the continued support from the government through purchasing aid and the very low interest rates from the Bank of England.
An old penny stock that I would buy
Manufacturers of ready-to-eat foods such as Bakkavor Group have been hit hard by Covid-19 lockdowns over the past year. But with people starting to go out and move around again, he can expect the take out industry to resume its meteoric growth of the past few years.
Lumina analysts believe the market will be worth £ 22.6 billion by 2024, up from £ 15.3 billion this year. Keep in mind, however, that a long battle against Covid-19 could derail those forecasts (and with it Bakkavor’s profit rebound) if the lockdowns return. This “almost” penny stock is trading at 118p.
Royston Wild owns shares of Barratt Developments, Taylor Wimpey and Tritax Big Box REIT. The Motley Fool UK recommended Tritax Big Box REIT. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a wide range of ideas makes us better investors.