Today I’m searching for the best penny stocks to buy for my Stocks and Shares ISA. The deadline for new investments for the 2021-22 tax year is just around the corner. Any of my annual £20,000 allowance that I don’t use can’t be rolled over to the next year.
I love to invest in UK shares with my ISA. The £20k that I’m permitted to invest each year in it is enough for my needs. And using an ISA wrapper gives me the chance to make a fat pot of cash without having to pay a single penny to the taxman.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions
I’d buy penny stocks today
I don’t need to use any money I pay into my ISA to buy stocks straight away. I can wait for weeks, months, or years to invest in some actual companies after that 5 April deadline.
I don’t see any reason why I personally need to wait, however. Here are three top-class penny stocks I’m thinking of buying right now. I think they coud deliver excellent returns in the near term and beyond.
A top lithium stock to buy
Buying lithium stocks could be a brilliant investing idea for me as electric vehicle (EV) sales boom. I’m considering doing this by buying lithium mining share Zinnwald Lithium (LSE: ZINN).
Lithium is a key material in the production of EV batteries. And Zinnwald has a 100% stake in a gigantic resource bang in the middle of German car-building country.
The penny stock is actually yet to produce any of the material. And setbacks with the development of the Zinnwald project could be costly in terms of both lost revenues and increased expenses.
In such a scenario accruing more debt and/or tapping shareholders for cash could also be possible. Mining for commodities is expensive business at all points of an asset’s life, after all.
However, I’m encouraged by ongoing progress at the asset. In March, Zinnwald Lithium confirmed the technical and economic viability of producing battery-grade lithium hydroxide following pilot testing at the site.
It’s my opinion that the potentially explosive benefits of owning this lithium stock over the long term outweigh these risks.
A golden penny stock
Chaarat Gold (LSE: CGH) is another penny stock that exposes investors to the unpredictable and often troublesome business of mining. But it’s still one I’d also load up on before next week’s ISA deadline.
This is because I think gold prices could be poised for another surge higher, driving profits at firms like Chaarat to the stars.
Inflation is a natural driver for gold prices. Right now it is rocketing beyond all expectations and is predicted to keep booming too. Consumer prices in the eurozone soared 7.5% in March, data showed today. That’s up from 5.9% in February and way above an expected 6.7%.
Any resurgence in the US dollar could hamper fresh rises in the value of gold. But on balance I think the outlook is good for bullion prices and, by extension, Armenia-focussed Chaarat’s share price.