I’m looking for the best penny stocks to buy for my investment portfolio. Should I snap up these low-cost UK shares without delay?
A high-risk penny stock
Could oilfield services provider Lamprell (LSE: LAM) be another top penny stock to buy in August? Well, a raft of strong results from oil majors such as BP and Shell have raised hopes of a bounceback in fossil fuel investment. A positive outlook for crude prices (in the short-to-medium term at least) suggests the good news could keep coming too.
That said, Lamprell is a UK share that’s far too risky for my liking. It’s just a few months since the company was warning about a severe cash crisis. Latest financials this week showed net cash slipped to just $81.1m too, down around $30m from the end of 2020. The business is looking to issue shares to raise up to $60m later in 2021. And it might not be the last time it’s forced to tap investors if talks will lenders fall flat.
I’m also concerned about Lamprell’s long-term future as the green energy revolution gathers pace. Sure, the penny stock is taking steps to improve its exposure to the renewables sector. But uncertainty over what beckons for what are (for now) its ‘bread and butter’ operations doesn’t exactly fill me with confidence.
A UK share I’d buy in August
The growth of e-commerce has been devastating to the high street over the past decade. And things look to go from bad to worse as Covid-19 has given online shopping an extra big push. This however, doesn’t mean all UK shares exposed to physical retail are bad buys. I’d happily invest in Ediston Property Investment Company (LSE: EPIC), for example.
This penny stock operates retail parks the length and breadth of the UK. So it also stands to gain from changing consumer habits brought on by the pandemic. Why? People are shunning shopping centres and the high street in favour of more spacious out-of-town locations that can be accessed by car.
I also think Ediston should be a beneficiary from the rise of e-commerce. This is because click and collect is booming among consumers who don’t want to pay delivery costs and who don’t (or can’t) sit at home waiting for the doorbell to ring. According to Insider Intelligence, a whopping 59% of Britons are set to buy something via click and collect in 2021.
This significantly benefits retailers located in retail parks. Their stores are easily accessible by car for goods to be carted back home. These parks also have more space for click and collect bases to be installed than inner-city retail spaces. I think this is a top penny stock to buy despite the threat the ongoing pandemic poses to non-essential retail in the short-to-medium term.