Investors haven’t got long to max out this year’s Stocks and Shares ISA allowance. Any part of my ISA allowance for the 2021/22 tax year can’t be rolled over to the new tax year. I have to use it or lose it, as they say.
I don’t actually have to buy UK shares straight away though. Just putting my cash into my ISA before the end of the day is enough to utilise this year’s allowance.
However, I don’t see any reason for me to wait. I’m looking for the best penny stocks to buy before the markets close today.
There are plenty of quality penny stocks out there that I think are too good to miss. Here are a couple I think could deliver excellent returns.
Back of the net
The cost of living crisis is a danger to all retail stocks as consumer spending power falls. Fishing equipment specialist Angling Direct (LSE: ANG) is no exception. Though I’d argue that niche retailers like this are better placed to ride out the storm.
Angling is one of those passions for which spending tends to remain resilient during upturns and downturns. In fact I’m considering buying this penny stock given the pace at which the hobby is growing.
The number of anglers in the UK ballooned during Covid-19 lockdowns. Recent data from Statista suggests that there’s plenty more upside to come, too. It believes the European fishing equipment market will grow at an annualised rate of 6% to 2026 and be worth $2.9bn by then.
Angling Direct’s sales rose an extra 7.2% in the financial year to January 2022, continuing its recent strong momentum. And last month the business opened a distribution hub in The Netherlands to sell products across the European Union.
Another top penny stock
Sellers of expensive goods like car retailer Pendragon (LSE: PDG) are also in danger as inflationary pressures intensify. However, this is not the only danger as auto production problems persist.
Today the Society of Motor Manufacturers (SMMT) announced that new car registrations slumped 14.3% year-on-year in March. This was the worst result since 1998 and reflected the impact of “ongoing supply chain shortages” on car production.
The parts shortage issue has been exacerbated by the Covid-19 resurgence in China and the war in Ukraine. But despite these dangers, I’m still thinking of buying Pendragon shares. I think profits here could soar over the longer term as electric vehicle sales take off.
Riding the dragon
Even with that overall decline in March, the SMMT said that sales of these low-carbon vehicles exploded in March. Battery-powered vehicles for example soared 78.3% last month, with sales of 39,315 units representing an all-time monthly high. Tese figures illustrate the massive growth potential of this car class.
I for one expect EV sales to keep rising strongly as concerns over the climate worsen and charging infrastructure improves. Today Pendragon trades on a forward P/E ratio of just 9.2 times. I think this makes the penny stock too cheap for me to miss.