Penny stocks, also known as penny shares, are shares that trade for under £1 in the UK. These are often associated with smaller companies with a market cap of under £100m.
Penny stocks are more speculative as they are growth-orientated and many haven’t made any money yet. But penny stocks can be a good return for those with a bit of risk.
we will look at the best penny stocks in the UK, the latest news, and growth potential.
We will also cover how to trade or invest in penny stocks, trading vs investing, and how to manage risk. Whether you’re an experienced investor or just starting, this guide will cover everything you need to know about the best penny stocks in the UK and how to get started.
Best Penny Stocks by Market Cap
Here is the Best Penny Stocks by Market Cap
Why Invest in Penny Stocks?
Investing in penny stocks allows for high-growth opportunities due to their low entry cost and the potential for substantial returns. However, they also come with higher risks, so due diligence and strategic planning are crucial.
Top Penny Stocks in the UK
Here are the Top Penny Stocks in the UK: Helium One, Bidstack, Premier African Minerals, BT Group, and Argo Blockchain PLC
1. Helium One (LON: HE1)
Helium One Global Ltd is focused on helium exploration and production in Tanzania to meet the steady demand in high-tech industries like healthcare and aerospace. With helium supply shortages being a concern Helium One’s active exploration makes it a great investment opportunity with huge growth.
- Market Cap: £20.436M
- P/E Ratio: 7.70
- Dividend Yield: 0
Key Highlights
- Projects: Helium One has three projects in Tanzania: Rukwa, Eyasi, and Babangida.
- Helium Concentrations: Assets are near surface seeps with helium concentrations up to 10.6% helium by volume.
- Global Demand: Helium is essential in various industries, and Helium One aims to address the global demand for this rare commodity.
2. Bidstack (LON: BIDS)
Bidstack changes the game for in-game advertising, giving advertisers access to a highly engaged audience in the fast-growing gaming industry. As digital ad budgets move to immersive platforms, Bidstack will benefit and drive revenue and value for shareholders.
- Market Cap: £2.93M
- P/E Ratio: -0.33
- Dividend Yield: 0
Key Highlights
- AdConsole: An analytics and reporting tool providing real-time data to partners.
- In-Game Advertising: Bidstack’s technology allows for dynamic, targeted, and automated native in-game advertising across multiple platforms.
- Expansion: Rapidly expanding portfolio of game publishers and developers, including AAA titles and independent games.
3. Premier African Minerals (LON: PREM)
Premier African Minerals is an African-focused mineral exploration and development company giving investors exposure to lithium, tantalum, and gold. With a diverse portfolio and increasing global demand for minerals, PREM has plenty of growth.
- Market Cap: £35.18M
- P/E Ratio: 35.18M
- Dividend Yield: 0
Key Highlights
- Mineral Focus: Tungsten, lithium, tantalum, gold, nickel, rare earth.
- Sustainable: Committed to sustainable practices and works with local communities and regulatory bodies to ensure responsible use of resources.
4. BT Group (BTGOF)
BT Group is the biggest player in the telecoms space with its broadband, mobile, and TV offerings. Investment in fiber-optic broadband and 5G networks puts BTGOF in a great position to benefit from the growing demand for connectivity, a nice play.
- Market Cap: £12.91B
- P/E Ratio: 7.20
- Dividend Yield: 7.32
Key Highlights
- Segments: Consumer, enterprise, global, Openreach.
- Services and Brands: Home and cybersecurity solutions, TV services, and cloud gaming entertainment. Working with Elon Musk’s Starlink and EV charging.
5. Argo Blockchain PLC (LON: ARB)
Argo Blockchain PLC is the number one cryptocurrency mining company in the world, and Bitcoin mining, with efficient operations and sustainability. As cryptocurrencies grow Argo Blockchain gives investors exposure to this growing sector.
- Market Cap: £54.948M
- P/E Ratio: 0
- Dividend Yield: 0
Key Highlights
- Mining Operations: Texas mining facility and offices in the US, Canada, and UK. Global operations powered by renewable energy.
Historical Performance of Penny Stocks UK
How To Trade Penny Stocks?
- Open a brokerage account with a broker that offers penny stock trading like Fidelity, Schwab, TD Ameritrade, or Robinhood. Look for brokers that charge flat fees per trade not per share.
- Fund your account with the amount you want to invest in penny stocks. Only invest money you can afford to lose, penny stocks are very risky.
- Research your penny stock investments thoroughly. Look for companies with good financials, a real business model, and growth potential. Avoid stocks with too much promotional activity or those that trade OTC with little SEC oversight.
- Enter your trade through your brokerage account, and enter the number of shares you want to buy. Be aware of the bid-ask spread which can be wide for penny stocks and affect your entry and exit prices.
- Watch your positions closely and be ready to sell if the stock price drops big time. Penny stocks are very volatile and can drop fast.
Bottom Line
Here are the top UK penny stocks for helium exploration, in-game advertising, mineral projects, telecoms, and cryptocurrency mining. Add these to your portfolio for 2024 and beyond. Time to get smart and get ahead.
Note: The information provided was selected by an experienced financial analyst, but it may or may not be suitable for your portfolio. Before making any purchases, conduct your own research and then make a decision
Frequently Asked Questions ( FAQ )
What are penny stocks?
Penny stocks are shares of small public companies that trade at low prices, typically under £1 in the UK.
Why are penny stocks considered high-risk investments?
Penny stocks are considered high-risk due to their high volatility, limited information availability, and susceptibility to market manipulation.
How can I mitigate risks when investing in penny stocks?
Mitigate risks by conducting thorough research, using stop-loss orders, avoiding over-investing in a single stock, and diversifying your portfolio.
What sectors offer the best penny stocks in the UK for May 2024?
Sectors like technology, healthcare, finance, energy, and consumer goods offer promising penny stocks for May 2024.
Is it possible to achieve high returns with penny stocks?
Yes, penny stocks can provide high returns on investment due to their low initial cost and growth potential.