I’m searching for top penny stocks to buy for 2022 and beyond. Here are a couple of low-cost stars on my watchlist today.
Riding the electric car boom
Surging tin prices have helped blast AfriTin Mining’s (LSE: ATM) share price through the roof. The penny stock recently closed at record peaks of 7.8p per share but has sunk from these highs due to choppy metal prices. I think this could represent an attractive buying opportunity.
As its name suggests, the business is involved in producing tin in Africa (and more specifically Namibia). This is a commodity that could be set to soar in value as demand for consumer electronics and electric vehicles (EVs) takes off. The metal that AfriTin produces is being used increasingly as a soldering material instead of lead.
But the commodities producer is about more than just tin. AfriTin has spoken previously about adding tantalum and lithium to its product suite and this month announced it had found spodumene near its flagship Uis asset. The lithium-bearing mineral could significantly boost AfriTin’s exposure to the booming EV market where it is used to make batteries.
AfriTin has plenty of potential, then, but its shares don’t exactly come cheap. The business trades on a forward price-to-earnings (P/E) ratio of 23.3 times. It’s the sort of premium rating that could prompt a sharp share price reversal if the company experiences trouble.
However, this is a risk I could be willing to take given the excellent long-term potential for its metals.
A safe-haven penny stock
The Covid-19 crisis and tragic events in Ukraine show that holding gold, gold-based financial instruments, or precious metal-producing stocks could be a good plan. History shows that bullion prices rise during social, economic, and political crises when riskier assets like shares sell off. So having a gold-based investment at all times can help protect one’s portfolio.
This is why I think holding Shanta Gold (LSE: SHG) shares could be a good idea for me today. Buying this particular gold miner gives me the chance to receive dividends along with the benefit of riding the gold price. This is something that owning bars, coins, or a metal-backed financial instrument like an exchange-traded fund (or ETF) doesn’t. Oh, and the yield at Shanta sits at a healthy 2.3% for this year.
Gold prices came within a whisker of reaching new highs last week as Russia intensified its operations in Ukraine. The conflict is ongoing and so fresh attempts could be around the corner in the coming days. Regardless, I think bullion will take out the current record above $2,070 per ounce as inflationary pressures accelerate. The Bank of England, for example, now says British consumer prices could rise more than 8% later this year.
Owning mining shares like Shanta Gold means that investors burden themselves with the extra risk of production problems that could decimate profits. But it’s my opinion that the potential long-term benefits of owning this particular Tanzania-focussed miner still make it a great buy for my portfolio right now.