Here are three top-quality penny stocks on my radar today. With £1,000 in my pocket this is why I’d buy them for my investment portfolio.

Playing the property boom

Trading at OnTheMarket (LSE: OTMP) has exceeded analyst expectations in recent times. The business — which operates the OnTheMarket.com property listings website — is thriving as demand for residential properties soars in the UK. Revenues at the business rocketed 46% year-on-year in the six months to June.

A mix of favourable lending conditions and support for first-time buyers has persisted, and last month the average price rose above £250,000 for the first time, according to Nationwide. I expect homebuyer demand to remain strong in the short-to-medium term too, in spite of upcoming Bank of England interest rate hikes. I’d buy OnTheMarket to exploit this theme, even though listings giants Zoopla and Rightmove pose a significant competitive threat.

Turkish delight

Gold miner Ariana Resources (LSE: ARR) first came to my attention last year when it released a stream of positive exploration updates. Since then, news on its drilling programmes at its assets in Turkey, as well as from the assets of other Eastern Mediterranean mining companies in which it holds stakes, have remained extremely encouraging.

For example, latest drilling action from Venus Minerals in late October — in which Ariana’s stake could rise to 50% as part of an earn-in agreement — revealed that the Kokkinoyia sector at the Magellan gold and zinc project in Cyprus is “significantly more exciting deposit than initially thought.”

While a falling gold price could hit Ariana’s bottom line hard, I still think this penny stock is a great way to get exposure to the safe-haven precious metal.

A penny stock with ambitious plans 

Budget greetings card retailer Card Factory (LSE: CARD) has ambitious plans to turbocharge revenues over the next five years. It plans to generate sales of £600m by financial 2026, up from the current peak of £451.5m recorded in 2020.

I think the business could make a decent fist of reaching this target for a couple of reasons. Firstly, it’s investing heavily in its digital operations to fully exploit the explosion in e-commerce. Secondly, value retail is tipped to be one of the megatrends of the decade as consumers demand more bang for their bucks.

Card Factory might not have things all its own way, of course. Online-only operators like Moonpig could provide a challenge to its growth target. So could fellow low-cost retailers like Cards Direct. But by offering the twin benefits of value and online I still think the penny stock could deliver impressive profits growth.

The London stock market recovered strongly following the 2008 global financial crisis. It allowed Stocks and Shares ISA investors who bought heavily at the bottom of the market to make fortunes. A great many even became millionaires. Between 2009 and 2018, the FTSE 100 more than doubled in value as economic conditions recovered and central bank monetary policy inflated asset prices.

Getting rich after stock market crashes

The near-term macroeconomic outlook is muddy as hell right now. But history shows us that UK share prices always recover strongly from stock market crashes, prompted by significant social, economic and political upheaval. I don’t believe there’s any reason why stock prices won’t surge again during the 2020s either.

UK share investors need to be prepared for a severe and drawn-out downturn in the global economy. They should avoid companies with debt-heavy balance sheets and which suffer significant damage from rising Covid-19 infection rates. Shares like Cineworld, for example.

But they shouldn’t stop buying UK shares completely. There are still plenty of top-quality stocks that should deliver exceptional shareholder returns even in the event of a prolonged economic depression. And a great many of these classy operators trade at rock-bottom prices following the stock market crash of early 2020.

I’ve continued to buy UK shares for my own Stocks and Shares ISA. Let me fill you in on another quality — and cheap — stock I’m thinking of adding to my investment portfolio:

A cheap UK share on my radar

Having some exposure to gold is always a good idea as corrections can happen at any time. And another stock market correction could be just around the corner. I think this makes Ariana Resources (LSE: AAU) a brilliant UK share to buy today.

When stock markets crash precious metal prices tend to soar, as has happened following the initial Covid-19 outbreak. Owning some gold-producing stocks is a good way to save your Stocks and Shares ISA from total meltdown.

Ariana Resources has risen in value by almost 150% since the beginning of 2020 as gold prices soared (it famously hit fresh record highs above $2,000 per ounce in August). A bright outlook for gold prices suggests it could continue its northwards ascent as well.

What’s more, I’m encouraged by the progress Ariana is making on the exploration front. And it’s also slowly getting back to business after Covid-19 disrupted activity. The digger said it produced 5,125 ounces of gold in the third quarter, up from 4,679 ounces in quarter two. Signs of further operational advances will give its share price an extra boost too.

Today, this UK share trades on a forward price-to-earnings (P/E) ratio of around 13 times. And, in my opinion, it makes Ariana a bargain.

David Barnes: Begbies Traynor

If you fear a second stock market crash or think the economy will struggle in the short term, I think a good hedge would be to invest in Begbies Traynor (LSE: BEG).

The insolvency and restructuring work specialist should see business demand surge as government support for companies is removed. The company is also a financial advisory and property services consultancy.

The firm has growing revenue and earnings per share, and uses acquisitions alongside organic growth to boost their financial strength.

Begbies Traynor trades at a fair price-to-earnings ratio of 16 and has a progressive 3% dividend that looks to be safely covered.

David Barnes has no position in Begbies Traynor.

Toby Aston: Anglo Pacific

Anglo Pacific Group (LSE:APF) is a global natural resources royalty and streaming company with a fantastic margins (52% profit last year). Its shares are down around 50% since last December, meaning the share price is a just 7 times earnings and at just 93% of book value. Management own around 7% of the shares which is encouraging.

It also pays a solid dividend yielding nearly 7%, which has doubled since 2016. This is all protected by a healthy dividend cover.  At 116p the shares are trading at low end of the 52 week range, despite analysts price target averaging 196p.

Toby Aston has no position in Anglo Pacific Group.

Royston Wild: Sylvania Platinum

Gold’s surge to record highs above $2,000 per ounce has dominated commodities-related chatter recently. But the yellow metal’s ascent due to rising safe-haven interest has dragged platinum group metals (or PGM) prices to significant highs as well.

Platinum has just struck multi-month peaks around $1,000 per ounce. And this has swept micro-cap stock Sylvania Platinum (LSE: SLP)’s share price to its highest since February. 

I’d buy the miner’s shares with the view that continued macroeconomic fears could drive their value even higher in the weeks and months to come. Sylvania’s low forward price-to-earnings (P/E) ratio of 11 times certainly leaves plenty of scope for additional share price gains.

Royston Wild does not own shares in Sylvania Platinum.

Tom Rodgers: Open Orphan

£96m market cap contract research firm Open Orphan (LSE: ORPH) is the world leader in testing vaccines and antivirals through its unique quarantine unit and on-site virology lab. 

Sales have been boosted by biotechs developing Covid-19 vaccines. But ORPH has large, long-term cash flow prospects far beyond coronavirus. 

A £4m contract with an unnamed global giant for a human challenge study into RSV is just the latest win. 2019 revenue was only £3.84m but that is expected to jump tenfold to £35m by 2021. 

Analysts think shares will more than double from today’s 14p price. 

I’m buying big. 

Tom Rodgers owns shares in Open Orphan.

Kirsteen Mackay: Trans-Siberian Gold 

Russian gold producer Trans-Siberian Gold (LSE:TSG) is a micro-cap stock that has caught my eye. With the price of gold ascending at an astounding rate, gold miners are reaping the benefits.  

Since the March market crash, the Trans-Siberian Gold share price has risen 165%. The £113m company has a price-to-earnings ratio of 14 and dividend yield close to 3%. It has maintained operations throughout the pandemic and delivered a positive set of results at the end of July. Its second quarter produced 46.9% higher average gold grades than its previous quarter. With the gold price continuing its ascent, I think the TSG share price will follow suit.  

Kirsteen does not own shares in Trans-Siberian Gold.

Matthew Dumigan: Jubilee Metals Group

Industry-leading metal recovery business Jubilee Metals Group (LSE: JLP) boasts an expanding multi-project portfolio with aims to increase both its geographical and commodity exposure. Operating in a rapidly expanding market, I think Jubilee is perfectly positioned to capitalise on increased demand for a reduction in the global footprint of mine tailings. 

Having become profitable for the first time this year, I’m impressed by the group’s recent financial performance. Moreover, as Jubilee continues to remain largely unnoticed by institutional investors (market cap: £115m), I think there’s a lucrative opportunity here for those willing to hold for the long term.

Matthew Dumigan has no position in Jubilee Metals Group.

Edward Sheldon: Keystone Law

My top micro-cap stock for August is Keystone Law (LSE: KEYS). It’s an innovative UK law firm that is disrupting the market by enabling lawyers to work from home or their own offices.

Keystone Law has grown at a rapid pace in recent years and I think it looks well-placed for growth in a post-Covid-19 world. I say this because its model is designed to service clients remotely.

KEYS isn’t the cheapest stock around. At the time of writing, its forward-looking P/E ratio using next year’s EPS forecast is about 36. However, I think this company deserves a premium valuation as it has a lot of potential for growth. 

Edward Sheldon owns shares in Keystone Law.

Rupert Hargreaves: Inspecs

Manufacturer of eyewear frames Inspecs (LSE: SPEC) is a unique business. The company is one of the few listed eyewear companies in the world, which gives it a defensive nature.

Indeed, the eyewear market is projected to expand at a compound annual rate of 8% for the next few years.  

Based on this growth, analysts reckon the company’s sales will double by 2021. This will leave the stock dealing at a forward P/E of 17.8.

The company’s double-digit profit margins and strong balance sheet also make it a prime dividend candidate.

Rupert Hargreaves does not own shares in Inspecs.

Rachael FitzGerald-Finch: Concurrent Technologies 

Shares in computer product manufacturer Concurrent Technologies (LSE: CNC) are growing nicely, like the company’s underlying financial fundamentals and investment metrics.

In fact, the share price is hovering around its 52-week high price point but is still trading on a price-to-earnings ratio of 22, below the industry average of 30. Given the competitive advantages of the firm, in the form of a growing an innovative product range, I am expecting further stock price growth.

I think Concurrent Technologies is a desirable micro-cap growth stock to hold as part of a balanced portfolio.

Rachael FitzGerald-Finch does not hold shares in Concurrent Technologies.

Anna Sokolidou: Ariana Resources

Ariana Resources (LSE:AAU), a small cap miner, explores silver and gold in Turkey.

Its shares have recently plunged a bit just like the two precious metals. In spite of the several months’ gold rally, the investors seem to be in a risk-on mode right now. However, I don’t really believe it will last for a long time. There are plenty of macroeconomic and geopolitical risks. So, in my view, gold and silver will rise in value pretty soon.

Although I consider small caps to be rather risky, their shares tend to surge more than their larger competitors’.   

Anna Sokolidou has no position in Ariana Resources.

Jonathan Smith: Mattioli Woods

Mattioli Woods (LSE: MTW) is a UK-based wealth manager. Financial performance through to the year end of May 31st was strong, with net inflows of around £200mn, despite the pandemic hampering the final few months. The firm has also been proactive with responding to the pandemic, taking on cost cutting measures with employee compensation, saving over £2.7mn in the process.

I’m also impressed with the drive and pro-activeness around growth aims. Only this month news broke of the successful acquisition of another wealth manager, Hurley Partners. This should aid long term growth via economies of scale.

Jonathan Smith does not own shares in Mattiolo Woods.

Kevin Godbold: Concurrent Technologies

Specialist designer and manufacturer of high-end, embedded computer boards for critical applications, Concurrent Technologies (LSE: CNC) had a ‘good’ coronavirus crisis. We last heard from the company in June. The directors said the order book is “strong” and the company maintained production through the lockdown.

The firm serves the military, aerospace, communications, industrial, transport and scientific sectors. It’s a good business, which shows in the robust multi-year record of rising cash flow and dividends suggesting the enterprise has defensive qualities. As we emerge from recession, I think the firm looks well placed to thrive. I’m backing the micro-cap stock for August and beyond.

Kevin Godbold owns shares in Concurrent Technologies.

G A Chester: Sylvania Platinum 

Sylvania Platinum (LSE: SLP) has built a record of strong operational performance in recent years. This is founded on its low-cost, low-risk extraction of platinum group metals (PGMs) from chrome tailings in the renowned PGM-rich Bushveld Igneous Complex in South Africa. 

The company’s strong operational performance has been matched by a sensible financial strategy. It’s debt-free. It’s strong cash flows fund capital expansion and process optimisation projects. And also support opportunistic share buybacks and shareholder dividends. 

Adding a single-digit earnings multiple to the strong management and focus on shareholder value makes Sylvania my top stock to buy right now. 

G A Chester has no position in Sylvania Platinum.

Roland Head: Somero Enterprises

I’ve been using this year’s market crash to buy shares in high-quality businesses trading at knockdown share prices. One micro-cap stock I think looks very attractive at the moment is Somero Enterprises (LSE: SOM).

This US business makes high-precision equipment for laying perfectly flat concrete floors, such as those required for ecommerce warehouses. The company went into the COVID-19 crash with a strong order book and reported net cash of $28m at the end of June.

Management say it’s too soon to give guidance on current market conditions. But Somero looks cheap to me on just eight times forecast earnings. I rate the shares as a buy.

Roland Head does not own shares in Somero Enterprises.

Andy Ross: Franchise Brands

Franchise Brands (LSE: FRAN) is a franchisor. Its franchises include consumer-facing ones such as ChipsAway and Ovenclean as well as business to business ones such as Metro Plumb and Willow Pumps.

I like that management are experienced operators. The executive chairman spent 21 years at Domino’s, which operates a franchise model. A number of the board and other senior management personnel also worked at Domino’s so know the industry well.

It’s an entrepreneurial company which has made acquisitions and retains talent within the business.

Franchisors can make good margins because it’s an asset light business model and I think that bodes well now and in the future.

Andy Ross does not own shares in Franchise Brands.

Paul Summers: Somero Enterprises

I think laser-guided equipment specialist Somero Enterprises (LSE: SOM) is a great buy for the long term. It’s the clear leader in a niche market and generates consistently high returns on capital employed.

Recent trading has been inevitably tough. However, Somero remains profitable and cash generative and would likely remain so even if revenues were to fall an additional 20%. It also has $28m in net cash to weather the coronavirus storm.

Those looking for a quick return probably won’t find it here. However, anyone intending to stick around for the next infrastructure boom could be richly rewarded. The shares look cheap at just 8 times forecast FY20 earnings.

Paul Summers owns shares in Somero Enterprises.