I’m searching for the best penny stocks to help turbocharge my wealth over the next few years. I think these low-cost UK shares could be just what I’ve been looking for.
Freight hero
I’d buy Xpediator (LSE: XPD) shares as Europe steadily recovers from the nightmare of Covid-19. It’s a penny stock that offers freight services by air, across land or by sea. It’s therefore well placed to benefit from lockdowns ending and trade flows picking up as economic conditions improve. I’m also a big fan of Xpediator because its warehouse, logistics and e-commerce fulfilment operations leave it well placed to exploit the internet shopping boom.
Trading at the firm is already at the stage of bouncing back strongly. Trading across all three of its divisions had continued strongly in 2021, it announced last month, with revenues at the company’s core Freight Forwarding unit experiencing “strong increases”. As a consequence, Xpediator said it expected full-year turnover to leap by at least 42% from 2020 levels.
I like its exposure to fast-growing economies in Eastern Europe. This helped Freight Forwarding sales to jump so robustly last year. But a word of warning: it’s worth remembering that growing political turbulence in this part of the world could pose a threat to shareholders.
Another penny stock for the e-commerce revolution
Like Xpediator, I think DX Group’s (LSE: DX) a great way for me to make money from online shopping. It’s a courier with operations in the UK and Ireland, giving it access to what is by far Europe’s biggest e-commerce market. Pleasingly DX Group is expanding rapidly to make the most of this opportunity. It’s opened six new depots and expanded another since last summer. And it plans to open another 12 in the next two years.
Technological progression, combined with the huge investment retailers and manufacturers are making in e-commerce, means that the quantity of parcels that DX Group shifts should continue rising. My main concern with buying this penny stock is that fuel prices are rising to fresh highs week after week. The increasing cost of fuelling its vehicles is a big danger to future profits growth.
Why I’d buy despite recent suspension
I can’t talk about DX Group without discussing a particular elephant in the room. In January the company’s shares were suspended from trading due to its ongoing failure to release full-year financials. This is related to a corporate governance inquiry, the company has previously said, and a failure to get those numbers out (for the 12 months to June 2021) has led to the resignation of auditor Grant Thornton.
It’s not a good look, clearly. But I’m encouraged by DX Group’s statement that the enquiry is “connected to a disciplinary matter” rather than the company’s trading performance or financial position. This is a stock I’d still strongly consider buying when the trading suspension eventually lifts.