I’m searching for the best penny stock to buy right now. Here are three I’d snap up today and aim to hold forever.
It seems the world will experience a long and choppy recovery from the coronavirus crisis. Global Covid-19 cases continue to grow as the Delta virus variant spreads. Vaccination rates have flattened in many regions and the emergence of new mutations could worsen the spike at any moment.
BATM Advanced Communications (LSE: BVC) is a UK share that stands to thrive in this climate. Revenues at its Bio-Medical division soared 10% in the first six months of 2021 as demand for its testing and diagnostic products boomed. However, BATM isn’t just a one-trick pony. It also makes networking and cybersecurity products, providing it with plenty of profits opportunities in an increasingly digital world.
Be aware though, that BATM Advanced Communications trades on an elevated P/E ratio of 39 times. Such a high valuation could cause the penny stock’s share price to collapse if anything other than explosive earnings growth becomes apparent. Today the company, which has fallen 27% in value over the past 12 months, changes hands at 86p per share. I’d buy in at these levels.
Playing your cards right with penny stocks
The Card Factory (LSE: CARD) share price has fallen 50% in value in less than five months. Confidence in the penny stock has plummeted as concerns of surging inflation and its impact on consumer confidence have increased. I think the market may have overreacted here however. I’d argue that retailers focussed on value like Card Factory stand to gain from falling shopper sentiment.
I’d also argue that Card Factory operates in one of the more defensive areas of the retail sector. People don’t stop sending greetings cards or celebrating special occasions when economic conditions worsen, right? While the UK share faces increased competition from online players like Moonpig and Thortful, the company’s investing in its own digital presence to exploit the e-commerce boom. I think the business is a great buy at current levels of 49p per share.
The African Queen
The Airtel Africa (LSE: AAF) share price has slipped from September’s record peaks of 103p, providing a decent opportunity for dip buyers, in my opinion. The telecoms share has risen 37% over the last 12 months, and I expect the business to resume this uptrend soon.
Airtel Africa is one of the biggest telecoms providers on the continent. It’s also a major player in Africa’s fast-growing mobile payments industry. Its activities are highly regulated, and so the threat of profits-damaging action from lawmakers is an ever present. But as wealth levels in Africa balloon, and demand for telecoms services and financial products leaps as a result, I believe this UK share can still expect to deliver blockbuster profits growth in the coming decades.
Airtel Africa shares go for 93p a pop right now. Consequently, it trades on a rock-bottom forward P/E ratio of 6 times. With the company boasting a chunky 4.3% dividend yield too, I think it’s one of the best-value penny stocks to buy today.
The post 3 sinking penny stocks I’d buy today to hold for 10 years! appeared first on The Motley Fool UK.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Airtel Africa Plc and Card Factory. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.