I’m hunting for the best penny stocks to buy for the long haul. Here’s a couple I think could deliver spectacular profits growth over the next decade.
Powering up my portfolio
I think OPG Power Ventures (LSE: OPG) could be an attractive way to get exposure to emerging markets. This particular UK share builds and operates power generation assets in India. This puts it in one of the best seats to exploit the strong economic growth that’s being tipped there in the coming years. The IMF, for example, reckons India’s GDP will rocket 8.5% in 2022 alone, faster than any other economy on earth.Â
What I also like about OPG is its desire to bulk up its position in the renewable market. It aims to have 300MW of solar energy projects up and running in India, up from 62MW at present. This could make it a popular stock to buy as the responsible investing theme takes off.
It’s worth remembering though that today the company generates the lion’s share of power from its coal-fired thermal plant in the state of Tamil Nadu. This leaves it at the mercy of a wave of unfavourable legislation as the fight against climate change takes off. Still, at current prices OPG trades on a forward price-to-earnings (P/E) ratio of just 8.2 times. I think this makes the power play attractively valued on a risk-to-reward basis.
A penny stock for the meat-free revolution
Agronomics (LSE: ANIC) is another dirt-cheap UK share on my radar today. This is because its focus on producing cutting-edge meat-free foods puts it in an industry poised for breakneck growth. According to researcher Facts and Factors, the worldwide market for cultured (or lab-grown) meat will be worth $248m by 2026. That compares with the $103m it was estimated at last year.
Now Argonomics doesn’t manufacture the foods that find their way onto the plate. Instead it has invested in well over a dozen businesses that make cultivated meats using specialist scientific techniques. Spreading its capital over a large selection of such companies helps to spread the risk. What’s more, Argonomics invests in producers whose processes are highly patented, removing the threat of them being copied by rival players.
Agronomics’ investment in what could become a colossal global industry — AT Kearney thinks cultured meat could command a 35% market share within two decades — means that the business commands a high valuation. Today it trades on a forward P/E ratio above 40 times. This leaves it in danger of a share price correction if profits disappoint, say if a competitor takes a bite out of its market share.
The progress Agronomics is making leads me to think it warrants a meaty premium (no pun intended). Like OPG Power Ventures, I’d happily buy this exciting penny stock and look to hold it for the long term.