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I hope to buy these penny stocks in time for Christmas. Here's why I think they could be brilliant additions to my UK share portfolio.
Surface transformations
Engineer Surface transformations manufactures high-performance carbon ceramic brakes for automobiles and airplanes. I think earnings here could take off starting next year as capacity increases to capitalize on the sports car boom.
Within the next three years the company hopes to have a new factory up and running which will generate sales of £150m. That's three times more than its 2024 production target.
However, Surface Transforms may not be a suitable option for risk-averse investors. Recent production issues have caused it to reduce near-term sales forecasts and have affected the company's stock price. But the recent weakness could be an excellent opportunity for long-term investors to buy.
DP Poland
I am trying to increase my exposure to fast-growing emerging markets. And I think the fast food business DP Poland could be an effective way to do this.
The company is the master franchisee of the Dominos Pizza brand in Poland and Croatia. These are significantly underpenetrated markets where sales continue to skyrocket. The latest financial data showed that comparable system sales in Poland increased by 34.8% to reach new monthly highs in October.
DP Poland plans to open more stores in its markets in the coming months to bring the total number to around 120. It also continues to invest heavily in its digital proposition. I think it's a good buy despite the threat of persistent cost inflation.
SRT Marine Systems
Marine technology company SRT Marine Systems faces turbulent waters in the near term as the global economy cools. Sales of its devices, which allow ships and vessels to be accurately tracked, could disappoint if shipping activity slows.
That said, an order book of £160m (as of early October) helps provide decent earnings stability in the near term. It's a stock I remain bullish on as demand increases across multiple sectors, including shipping, search and rescue, and fishing.
SRT is the market leader in automated identification systems (AIS). And only a fraction of the world's ships contain such technology, providing exceptional growth potential for this penny stock.
Kodal Minerals
Buying raw material producers always involves a high level of risk. Mineral exploration, mine development and metal excavation are very complex and expensive businesses.
But investing in lithium stocks could be a good idea as demand for the light metal increases. Kodal Minerals It is a mining stock I would buy to target this market.
The company is developing the giant Bougouni mine in Mali. It aims to produce 220,000 tonnes of lithium-rich spodumene there each year and has sealed a $100 million financing deal with the Chinese mining giant. Hainan to launch the project. This helps reduce risk for investors.
I think Kodal could rise as sales of electric vehicles and consumer electronics increase.
