I’m searching for the best penny stocks to buy for my portfolio for next year. I wouldn’t just buy the following shares to make a quick buck, though. I think they could deliver excellent shareholder returns over the long term too.
A penny stock on my radar
I have direct exposure to the housebuilding sector through my stakes in Barratt Developments and Taylor Wimpey. I’m considering capitalising on improving construction rates in the UK by snapping up building goods supplier SIG (LSE: SHI) too. This penny stock sells a broad array of essential products like roof tiles, insulation boards and cladding.
Britain needs to get building over the next decade and the government has set a target of 300,000 new homes a year by the mid-2020s. Companies like SIG will play an essential role in helping the housebuilders meet this goal.
I also believe the rock-solid repair, maintenance and improvements (or RMI) sector gives SIG and its shareholders plenty to be positive about. I’d buy the business to exploit this opportunity, even though supply chain problems poses a danger to profits in the nearer term.
Making money from the inflationary boom
Recent inflation news convinces me that grabbing a slice of some gold-producing stocks could be a good idea. Inflation gauges from the US and UK showed prices rising at 39- and 10-year highs respectively. Data more recently from the eurozone showed consumer prices increasing since the economic bloc began in 1999 as well.
Gold prices rise when inflationary pressures grow. This is why I’m considering buying Ariana Resources (LSE: AAU) today, though it’s not the only reason why.
I’m also encouraged by the slew of positive drilling updates from its Turkish assets (and from Mediterranean-focussed miners in which it’s invested) in recent months. I’d buy Ariana despite the threat that gold prices could fall if, for example, the US dollar were to strengthen.
A next-gen food share
Concerns over animal welfare and the environmental impact of livestock farming have fuelled a sharp rise in vegan and vegetarian diets in recent years. This has led to an explosion in the number of non-animal products being manufactured and sold all over the globe.
It seems that the growing popularity of meat alternatives is set to keep running too. Analysts at Expert Market Research think the global vegan food market will be worth $26.1bn by 2026, up from $15.4bn last year.
I’m thinking of buying Agronomics shares to make money from this trend. This company has invested in a selection of fledgling producers in the field of lab-grown meat. Okay, these sorts of products aren’t strictly ‘vegan’. But sales are tipped to take off as people seek to get their protein in other ways than from animals. I’d buy the business even though one or more of the assets it’s spent cash on could fail to deliver on their exceptional promise.
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Royston Wild owns Barratt Developments and Taylor Wimpey. The Motley Fool UK has no position in any of the shares mentioned. 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.