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Highlights
- Penny stocks usually trade below £1 with a market capitalisation of less than £100 million.
- Investors should dedicate only some fraction of their investment portfolio to penny stocks, as they are generally highly volatile and low on quality.
Penny stocks, which usually trade below £1 with a market capitalisation of less than £100 million, are becoming more and more popular among investors due to their potential of generating great returns. However, these high returns come with a higher risk quotient.
It is important for investors to understand that only some fraction of their investment portfolio should be dedicated to penny stocks, as their prices are volatile the companies, which offer penny stocks are mostly small and low on quality.
Investors should carry out comprehensive research prior to investing in penny stocks and pick the favourable ones with bright prospects.
Let’s take a look 5 UK penny stocks that you can buy and hold for 2022.
RELATED READ: Which LSE penny stocks are doing well right now?
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Card Factory PLC (LON: CARD)
The market cap of UK-based retail firm Card Factory PLC, which sells greeting cards, party decorations, and gifts, stood at £179.49 million as of 21 December 2021. Its sales have made a solid recovery to pre-pandemic levels this year and is expected to grow further in 2022. The company has given a return of 21.32% to its shareholders in the last one year and its year-to-date return stands at 25.15% as of 21 December 2021. Card Factory PLC’s shares were trading at GBX 54.80, up by 4.38%, at 10:30 AM (GMT) on 21 December 2021.
Pendragon PLC (LON: PDG)
The market cap of UK’s second largest motor retailer Pendragon PLC stood at £307.33 million as of 21 December 2021. It has been capitalising on the growing demand of second-hand vehicles due to skyrocketing prices. The company has given a return of 97.42% to its shareholders in the last one year and its year-to-date return stands at 67.28% as of 21 December 2021. Pendragon PLC’s shares were trading at GBX 22.00 at 10:30 AM (GMT) on 21 December 2021.
Vector Capital PLC (LON:VCAP)
UK-based company Vector Capital PLC offers financial services to commercial clients. The company got listed on the LSE’s AIM in December 2020 and its business has flourished in the last one year mainly due to high demand for financial services. The market cap of the company stood at £21.72 million, and its year-to-date return stood at 20.00% as of 21 December 2021. Vector Capital PLC’s shares were trading at GBX 44.50, down by 7.29%, at 10:30 AM (GMT) on 21 December 2021.
RELATED READ: 2 mining penny stocks to buy before 2021 comes to an end
EQTEC PLC (LON: EQT)
UK-based energy firm EQTEC PLC has expertise in gasification technology and focuses on generating sustainable energy through its patented technology. This stock may skyrocket in future with investors becoming more environment conscious. The market cap of the company stood at £101.90 million, and it has given a return of -1.79% to its shareholders in the last one year as of 21 December 2021. EQTEC PLC’s shares were trading at GBX 1.20, up by 0.84%, at 10:30 AM (GMT) on 21 December 2021.
Staffline Group Plc (LON: STAF)
UK’s leading recruiting organisation Staffline Group Plc outsources HR services to companies and helps them in fulfilling their staffing and employability needs. As the job market strengthens again and workers start switching employment in 2022, the stock is expected to gain. The market cap of the company stood at £95.32 million as of 21 December 2021. It has given a return of 37.18% to its shareholders in the last one year and its year-to-date return stands at 26.11% as of 21 December 2021. Staffline Group Plc’s shares were trading at GBX 57.00, down by 0.87%, at 10:30 AM (GMT) on 21 December 2021.
