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3 ‘nearly’ penny stocks I think could soar in 2022!

2022 new year concept image

My quest to find the best cheap UK shares to buy has brought these near-penny stocks to my attention. Here’s why Id buy them today.

A top renewable energy stock

Renewable energy stocks offer plenty of opportunity for UK share investors like me. But I don’t just have the option of buying into firms that generate clean energy like wind or solar farm operators. Stocks making the technology that stores energy is another very good way for me to make money.

This is where Gore Street Energy Storage Fund (LSE: GSF) comes in. This ‘nearly’ penny stock buys and constructs battery storage assets the length and breadth of Britain. We don’t stop using electricity when the wind doesn’t blow and the sun doesn’t shine. As a result, these sort of assets are essential to ensure we are constantly supplied with power. And it’s a sector that’s growing quickly as investment in renewable energy sources shifts through the gears.

A word of warning however, Gore Street has a lot of debt on its books. It therefore could see finance costs rise sharply if interest rates soar.

On cloud nine

Technological advancements and changing life/work balances meant remote working was growing strongly before Covid-19. The onset of the pandemic supercharged the practice of working away from the office. It could remain a big part of life in 2022 too, given the current elevated rate of infections.

All this bodes well for firms like Redcentric (LSE: RCN). This particular UK share provides cloud computing services that enable employees to do their jobs wherever there’s an internet connection. Sales have slipped more recently (down 4.1% year-on-year in the six months to September) but this reflects the blowout comparisons of the same 2020 period.

I’m confident Redcentric will get back on the front foot sooner rather than later, helped by its acquisition of Piksel in September. I think it could deliver strong profits growth, despite the threat posed by US industry giants like Microsoft.

A trip to the Zoo

Zoo Media Group’s (LSE: ZOO) another technology company I’d buy for the new year. This near-penny stock supplies a wide range of services for broadcasters, streaming companies and film studios. These include dubbing and subtitling movies and shows, providing script creation assistance, and localising content such as programme titles, synopses and artwork.

The company’s major partners include the likes of Disney, Netflix and WarnerMedia. And I fully expect demand for its services to keep rising as investment in content booms. Disney, for example, is set to raise spending by $8bn year-on-year in 2022, to $33bn. Fierce competition means that other major players, including Apple, Amazon and ViacomCBS, will surely continue spending heavily as well.

I think Zoo Media could make its shareholders stacks of cash in this climate. I’d buy it even though profits could suffer in the near term if soaring Covid-19 cases forces the film and TV industries to close down again.

The post 3 ‘nearly’ penny stocks I think could soar in 2022! appeared first on The Motley Fool UK.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Apple, and Microsoft. 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.