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Highlights:
- Many investors look for penny stocks as they may offer better returns than large-cap firms.
- However, investors should be careful in choosing penny stocks as they are extremely risky.
The UK is currently going through economic turbulence. Inflation is at decades-old high levels, and to manage it, the Bank of England (BoE) has raised interest rates to 3%, with the biggest hike in 33 years. The BoE has warned that this may well be the longest recession in over a century. The bank said that inflation is expected to peak at around 11% at the end of 2022.
Overall, this is a challenging situation for investors. It could be tricky to find the right stocks to invest in during such times as the markets are extremely volatile. Many investors look at minimal risk options during uncertain times, while some with a higher risk appetite look for higher returns with penny stocks.
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While penny stocks may offer better returns than large-cap firms, they are extremely volatile and risky. Especially in times of a recession, the risks associated with penny stocks go up. Therefore, it is crucial for investors to carefully analyse a company before putting their hard-earned money into it.
Here are some penny stocks that investors may look at.
Angus Energy Plc (LON:ANGS)
With a market cap of £55.66 million, the UK-based independent onshore oil and gas development firm has given a return of 109.61% to investors in the past 52 weeks. Its year-to-date or YTD return currently stands at 187.58%. The firm is listed on the FTSE AIM All-share index.
Harvest Minerals Ltd (LON: HMI)
The Australia-based organic natural fertiliser firm, Harvest Minerals boasts of a market cap of £12.30 million. The stock has provided a return of 70.55% over the past 52 weeks, while the YTD return is currently at 45.55%.
Atlantic Lithium Limited (LON:ALL)
The lithium-focused exploration and development company focuses on its assets in West Africa. It belongs to the FTSE AIM 100 index and enjoys a market cap of £266.79 million. The EPS stands in the negative territory at -0.02, while the one-year return is 125.24% at the time of writing. The YTD return, on the other hand, is at 73.90%.
Prospex Energy Plc (LON:PXEN)
The United Kingdom-based oil and gas investment company has a market cap of £29.28 million. Its share price has appreciated by 273.52% over the past 12 months, while the YTD return at the time of writing stood at 203.77%. The stock has an EPS of 0.02.
Tavistock Investments Plc (LON:TAVI)
The financial services provider primarily focuses on investment services to private investors. The FTSE AIM All-Share index firm enjoys a market cap of £38.88 million. Over the past year, the share price has increased by 71.25%, while the YTD return stands at 66.06%.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
