I don’t think I need to spend a fortune to build a winning UK shares portfolio. Here are three penny stocks I reckon could make me plenty of cash.
Play my cards right
Card Factory faces a significant threat from online-only rivals like Moonpig and Funky Pigeon as e-commerce in its category takes off. But this penny stock is no slouch on this front and it’s invested heavily in its own internet proposition to exploit the online boom. Latest financials consequently showed sales at Cardfactory.co.uk and its Getting Personal customised greetings channel trading above pre-pandemic levels.
I’m tempted to buy Card Factory because of its ultra-defensive characteristics. We don’t stop celebrating special occasion like birthdays when economic conditions worsen, right? I also like Card Factory’s focus on the fast-growing value end of the retail market. This cheap UK share trades at 57p.
Strong all-round value
The online shopping phenomenon offers big opportunities for investors to make a buck. I myself have bought into Tritax Big Box REIT to capitalise on this, a business that rents out warehouses and distribution hubs. And I’m considering snapping up Raven Property Group (LSE: RAV) too. This UK share does the same thing, except its big box assets are located in Russia rather than in Britain.
The Russian e-commerce market is growing rapidly, and as a consequence, so is demand for buildings that help retailers meet orders. Pleasingly for the likes of Raven Property, digital retail is expected to continue growing rapidly. Boffins at Statista are predicting annual growth of 42%, 37% and 31% in 2021, 2022 and 2023 respectively, for example. But I’m aware that further economic sanctions if the Russia-Ukraine military crisis worsens could hit e-commerce growth in the near term and beyond.
Today Raven Property trades at 33p per share. This leaves it on a forward P/E ratio of below 4 times. Furthermore, at current prices this penny share carries a mighty 5.4% dividend yield. I think this sort of value is hard for me to ignore.
A penny stock for the EV boom
I also think profits at Zinnwald Lithium (LSE: ZNWD) could soar as demand for lithium steadily takes off. This particular UK share owns the gigantic Zinnwald lithium project in the heart of Germany’s carbuilding country. It’s therefore well placed to ride soaring demand for low-emissions vehicles that run on lithium batteries.
According to commodities analysts at Fastmarkets, “electric vehicle (EV) demand will continue to drive the lithium market forward”. They predict that electric car penetration will reach 15% by 2025 before marching to 35% by 2030. And they expect growing lithium demand “from applications such as energy storage systems, 5G devices, and Internet of Things infrastructure” too.
Of course Zinnwald Lithium may fail to take full advantage of these expanding markets if development of its German mine hits problems. But this is a risk I’d be willing to take. All things considered, I still think this penny stock has plenty to offer me. It trades at 14.6p right now.
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Royston Wild owns Tritax Big Box REIT. The Motley Fool UK has recommended Card Factory and Tritax Big Box REIT. 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.