I think now is a great time to buy UK shares. Swathes of quality British stocks have failed to recover in price following the 2020 stock market crash. And this provides a chance for long-term investors like me to nip in and grab a bargain or two. There are plenty of penny stocks alone that are on my radar right now. Shares like these trade for less than a pound a pop.
Share pickers need to be careful before splashing the cash of course. Many UK shares remain financially fragile following the Covid-19 outbreak of last year. But there are countless stocks that are in good health and which I think could soar in value when economic conditions eventually rebound.
Here are four penny stocks I’d buy today for a new bull market.
#1: Catch of the day?
There are several reasons why I think retailer Angling Direct’s share price could soar over the medium term. Consumer spending always recovers robustly when the broader economy picks up. It is also rapidly expanding its store network and investing shedloads in its online proposition both at home and abroad. Fishing is the most popular participation sport in the UK too. That said, bear in mind recent data that shows angling participation steadily falling prior to Covid-19 lockdowns.
#2: Full steam ahead
I expect sales of Hornby’s models and collectibles to improve too as consumer spending power takes off in the next bull market. It’s true that competition in the realms of railway sets, slot car racing and model kits is fierce and Hornby has seen several years of losses. But the UK share’s brands like Airfix, Scalextric and those eponymous locomotive ranges command fierce loyalty among many hobbyists, giving it a distinct competitive advantage. I’m also encouraged by the company’s drive to boost investment in digital marketing.
#3: Making money in the digital realm
Bidstack is another penny stock whose profits I think could rise in 2021 and beyond. It’s not just because advertising and marketing budgets tend to rise strongly during the early stages of the economic cycle. It’s because this share — which builds adverts into interactive technology — should benefit from the rocketing popularity of video games. That said, threats to its relationships with game developers and publishers from other technology providers could derail its bright long-term outlook.
#4: Another top penny stock for gamers
Rising retail spending during economic recoveries also makes Gaming Realms an attractive penny stock in my book. This UK share builds games for mobiles, tablets and PCs and licences them to gambling operators. I’m also backing this tech share to thrive as the online gambling industry goes from strength to strength and its recent US expansion likely pays off. It’s been suggested that the global gambling market could rise at an annualised rate of 7% through to 2025. That said, the mobile gaming market is fiercely competitive and profits could suffer if players flock to other games.