ISA investors who want to buy UK shares might need to get their skates on. This is because the deadline by which investors can fully use their £20,000 allowance for this tax year expires on 5 April.
That gives Stocks and Shares ISA investors like me less than a fortnight to max out their capital allocation. It’s why I’m scanning the London Stock Market for top penny stocks to buy.
Of course, investors don’t need to go out and buy UK shares straight away. Just stashing the money in a Stocks and Shares ISA before that cut-off date is enough to utilise the 2020/2021 annual allowance. But I don’t see any reason not to add to my own shares portfolio right away. There are plenty of terrific penny stocks which I’m thinking of buying before that ISA deadline.
#1: A shopping superstar?
McColls Retail is one low-cost UK share which I’ve given close attention to recently. This is because of a recent IGD study showing that consumer spending at convenience stores will grow by around 13.2% in value terms by 2022. This compares with the 10% rise by which the broader grocery market is tipped to expand.
That said, at the same time I’m concerned by the threats posed to McColls from the aggressive expansion of Aldi and Lidl. The soaring popularity of online grocery shopping is another threat to the penny stock’s long-term future too. I might continue sitting on the fence for the time being.
#2: A golden penny stock
I’d be far happier to invest my money in gold miner Petropavlovsk today. As the Covid-19 crisis has shown, catastrophes that rattle stock markets can happen at any time. And so having exposure to safe-haven assets that rise in value during tough times like gold is a strategy adopted by many investors.
Precious metals prices have settled back from last summer’s record peaks above $2,000 per ounce. However, I don’t think huge central bank support for the global economy will end soon. And I think this could cause bullion prices to soar again as inflationary pressures increase. With the pandemic also worsening again, I think the outlook for Petropavlovsk’s share price remains pretty bright.
#3: Property powerhouse
The PRS REIT is another penny stock high on my shopping list. In fact, I think it’s one of the best UK shares to buy for these uncertain times. We always need a roof above our heads, and so this property company can expect profits to rise during bad times as well as good. In fact right now, rents in Britain are going from strength to strength because of a huge shortage of properties.
Data from estate agents Hamptons showed average rents for newly-let properties outside London soared 8% year-on-year in February. This plays into the hands of The PRS REIT whose homes are all located outside the capital. Be warned, though, that a fresh Covid-19 wave like the one on mainland Europe could hit construction of the company’s homes and thus damage rent rolls in the nearer term.