NEWSLETTER
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I don’t have an inexhaustible reserve of cash to fall back on. But here are three penny stocks you’d buy today if you had extra money to invest.
I think they could generate spectacular returns for investors over the next decade.
surface transformations
The global sports car market appears poised for rapid growth as the number of high net worth individuals skyrockets. But investing in an engine manufacturer carries a high risk, as the market is very competitive.
So I prefer to invest in companies that make components for these automakers. surface transformations (LSE:SCE) is one of those businesses I have my eye on, a penny stock that makes ceramic brakes for high-performance vehicles.
The business is also constantly increasing capacity to better exploit this rapidly growing market. By 2026, it expects to have a sales capacity of £150m, up from the £50m it expects to be up and running by Q2.
Keep in mind, however, that earnings could disappoint in the short term if broader production woes among major automakers continue.
European metal holdings
The mining business is extremely unpredictable and therefore earnings forecasts are fragile. The exploration of mineral deposits, the development of mines and, finally, the extraction of raw materials from the ground is a very complicated business.
But I’m still tempted to invest in European metal holdings (LSE:EMH). This mining company is in the process of developing the Czech Republic’s Cinovec lithium project, said to be the largest resource of the metal in Europe.
This creates enormous profit potential. Long-term lithium demand is projected to skyrocket as electric vehicle (EV) sales take off. The element is a key material in car batteries.
In addition to this, I like the geographic position of this particular lithium stock. As the map below shows, you’re on the doorstep of some of the biggest engine manufacturers in the world.
Last week, Cinovec was also classified by the European Union as a strategic project. This gives you priority access to block financing. All things considered, I think now is a good time to buy this penny stock.
Group of bars in the city
UK leisure stocks face an uncertain 2023 as the cost of living crisis lingers. This includes Group of bars in the city (LSE:CPC), a pub chain that operates 44 outlets in the south of England and Wales.
That being said, I think your focus on the premium end of the bar market could help you weather the storm. Wealthier consumers have more money to spend during economic ups and downs.
In fact, the most recent financial data was a huge reassurance for investors. City Pub Group saw comparable sales growth accelerate to 7.8% compared to 2019. Results would have been even better but for the rail strikes.
Brits are spending larger proportions of their income on leisure activities like going out for a pint or cocktail. I think this penny stock could be a great way to capitalize on this theme.
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