I’m looking for the best penny stocks to buy in November. Here are three dirt-cheap UK shares on my radar right now.
Grounds for optimism
As Britain’s biggest geotechnical engineering specialist, I think Van Elle Holdings (LSE: VANL) could make terrific returns for its shareholders over the next decade. The business offers a wide range of ground services across multiple sectors that look primed for healthy growth in the long term.
For example, its dealings in the residential housing sector will allow it to exploit the housebuilding boom that’s tipped for the next few years, at least. Its expertise in infrastructure should also generate solid profits as spending on roads, rail and other big government projects takes off.
It’s true that Van Elle could suffer in the short-to-medium term if the UK economy stalls and material shortages damage the construction sector. September’s Purchasing Managers’ Index (PMI) gauge fell to its lowest since the start of the year. But as someone who invests with a long-term view, I think this penny stock is still a top buy.
The property powerhouse
I believe Empiric Student Property (LSE: ESP) could be one of the best property stocks out there to buy. UK universities have been extremely popular destinations with overseas students for centuries. And today, their pull is as strong as it’s ever been. According to government statistics, there were 538,600 foreign nationals studying at British institutions in 2019/2020. That represented a whopping 22% of the UK’s total student population.
A higher proportion of students from abroad generally means higher demand from accommodation providers like Empiric. The supply of student living spaces is growing, but it’s failing to match the rate it’s needed, meaning that rents continue steadily rising.
While I believe this all bodes well for Empiric Student Property, it’s important to remember that the ongoing pandemic still poses extreme near-term risks. Revenues here slumped 24% year-on-year between January and June as occupancy levels dropped to a mere 65%.
A high-risk, high-reward penny stock?
I believe Horizonte Minerals (LSE: HZM) could also enjoy excellent profits growth through the next decade, at least. This penny stock is developing two nickel projects in Brazil, operations which it hopes will help it to ride the electric vehicle boom. A recent Roskill report estimated that nickel demand from these low-emissions vehicles will surge to 2.6m tonnes by 2040. That compares starkly with the 90,000 tonnes recorded last year.
Horizonte Minerals is clearly packed with potential, stemming from the green revolution. What’s more, its Vermelho and Araguaia are high-grade, low-cost assets with long mine lives. But while I’m closely monitoring the penny stock, I haven’t yet taken the step of actually investing.
Development problems and soaring costs could significantly set back the company’s road to profit. It could also force the business to tap shareholders for cash, of course. I might wait a little longer before buying Horizonte for my shares portfolio.