Kropz

What it does: Searches for and produces rock phosphate in Africa.
Price: 8.5p per share

Producing enough food to go round is becoming increasingly hard as population levels rise and global warming worsens. It’s why companies like Kropz (LSE: KRPZ) will play a critical role in the food industry in the decades to come.

This penny stock mines for rock phosphate in Africa, the basic material that’s then used to produce phosphate fertilisers. Virtually all of these types of fertiliser are based on rock phosphate, a raw material that Kropz hopes to produce from its Elandsfontein open pit project in South Africa later in 2022.

Kropz also 100% owns the Hinda rock phosphate asset in Republic of Congo. The business has said that the project could be “one of the world’s largest undeveloped sedimentary-hosted phosphate reserves.”

Production problems

Operational news from the firm hasn’t been hugely encouraging recently. In April it warned of production issues at Elandsfontein that would push its first bulk sale of rock phosphate further back into Q2.

This delay also means Kropz has had to raise ZAR58m, it said. It’s done raise this by drawing down remaining funds from a conditional convertible equity facility and by sealing a bridge loan facility.

A big market

Buying mining shares can always be considered risky. Problems at the exploration, mine development and production stages can be commonplace. And as Kropz has shown, this can be particularly problematic for smaller operators with no revenues and fragile balance sheets.

Still, it’s my opinion that this is an attractive penny stock for me to buy. First off, its projects in Africa are potentially world-class assets. And secondly the business could profit considerably from soaring fertiliser demand.

Analysts at Grand View Research think the phosphate fertiliser market will grow from $63.81bn today to a whopping $176.06bn by 2040.

Corero Network Security

What it does: Provides products that protect websites from cyber attacks.
Price: 12.25p per share

The Covid-19 crisis had led to a sea change in employee expectations. In particular demand for more flexibility in regard to working arrangements has taken off. This bodes well for many businesses that supply software and IT services like Corero Network Security (LSE: CNS).

This particular tech stock provides protection against so-called Distributed Denial-of-Service (or DDoS) attacks. These malicious actions work by attacking a website with large amounts of fake traffic to cause a crash.

With more and more people working from home the opportunity for cyber criminals to wreak havoc is growing. Companies are therefore are having to spend huge amounts on tech security to plug their vulnerabilities. Corero itself saw revenues rocket 24% year-on-year in 2021.

A small player

The problem for Corero Network Security is that it’s tiny compared with the industry’s big beasts. Today the penny stock has a market cap a shade above £60m.

Compare this with the multi-billion (and even trillion) dollar valuations that businesses like Microsoft, NortonLifeLock and McAfee command. Corero then has a fraction of the budgets that its US heavyweight rivals have to develop and market their products.

Making great progress

Corero will have to paddle extremely hard to avoid being swept away by the competition. But having said that, I find the rate at which the UK underdog is winning business highly encouraging. And it could continue to impress as the global cybersecurity market rapidly grows.

Researchers at Quince Market Insights think this sector will expand at a compound annual growth rate of 12.5% between now and 2028. They say the cybersecurity industry will be worth a gigantic $418.3bn by then.

US Solar Fund

What it does: Invests in solar farms in the US.
Price: 88 US cents share

Investing in renewable energy stocks is also appealing to me today. I’ve taken the splash in recent weeks by buying shares in solar and wind farm owner The Renewables Infrastructure Group. I’m considering increasing my exposure by snapping up stock in US Solar Fund (LSE: USF) as well.

As the name suggests, US Solar Fund is focused on creating green energy from photovoltaic cells in the States. Its assets can be found predominantly in North Carolina with the remainder in Oregon, California, and Utah.

Favourable locations

The problem with renewable energy is that it’s sometimes more difficult to generate than electricity from fossil fuels. In the case of US Solar Fund, power generation can tumble during cloudy periods. This can have a significant impact on near-term profits and, by extension, shareholder returns.

The good news for US Solar Fund, though is that the four states it operates in receive more sunshine than the national average. The places in which its assets are located are also well distanced from one another. A wide geographic footprint helps mitigate the impact of poor weather in one or two places at group level.

I also like US Solar Fund because of the favourable legislative conditions in the US that makes it easier to operate. In fact President Biden this week announced plans to halve the amount it charges companies to build wind and solar projects on federal land in a bid to boost investment.

A top dip buy

Demand for renewable energy is soaring as public awareness over the climate change issue grows. The West’s need for clean electricity is set to increase further it tries to wean itself off Russian oil in particular.

The US Solar Fund share price has reversed sharply over the past year. And as someone who invests for the long term, this has attracted my attention. It’s my opinion that this penny stock could deliver excellent returns over the next decade and potentially beyond.

The Works said on Tuesday that “unauthorised access to its computer systems” had caused trading and operating chaos. Some of its stores were forced to close and shop deliveries halted.

The problem of cyber attacks worsened considerably during Covid-19 lockdowns. And it’s expected to keep growing strongly as the world becomes more digitalised.

Soaring sales

With a market cap of just £63m Corero Network Security doesn’t have the clout of the industry’s major players. It will have to work extremely hard then to succeed in this ultra-competitive sector.

But I’m impressed by the rate at which Corero is winning business. The tech giant added 44 new customers in 2021 and saw revenues soar 24% year-on-year. It said in January that its “strong momentum” has continued into 2022 too and that it is investing additional resources this year to bolster growth.

Worth the price

It’s important to know that Corero shares look expensive today. At around 12.75p the penny stock trades on a forward price-to-earnings (P/E) ratio of 141 times.

This is the kind of sky-high rating that might prompt a share price correction if company news flow begins to disappoint. For example if those competitive pressures start to hit revenues growth.

Still, it’s my opinion that Corero’s solid momentum — tied with the rate at which the cyber security market is tipped to keep growing — means that a premium share price is warranted.

Another great penny stock

Getting exposure to the housebuilding sector is another good investment idea today. Property prices continue to soar and Brickability Group (LSE: BRCK) could be a good way to exploit this phenomenon.

As you can probably gather Brickability makes the products that are essential in home construction. Many housebuilders are supercharging build rates as demand continues to exceed supply. A steady stream of positive industry data leads me to think that they’ll remain super busy on the construction front too.

Halifax data today shows average house prices up 11% year-on-year in March. A new record high of £282,753 was also up 1.4% from February, the largest on-month increase for six months.

A dirt-cheap UK share

Of course firms like Brickability could be hit by incoming interest rate rises in 2022. The Bank of England is tipped to step up rate hikes in what could be a blow to buyer affordability.

But so far rate rises and the increasing cost of living is failing to cool the British housing market. And besides, I think Brickability’s dirt-cheap share price reflects this threat.

At 93.5p per share the brickmaker carries a forward price-to-earnings growth (PEG) ratio of 0.3. This is well below the widely-regarded bargain watermark of 1. I’d happily buy Brickability alongside Corero Network Security right now.

I have £753 sitting in my account waiting to be used. If I used this to buy stocks I could — based on the average rate of return of 8% a year — potentially turn this into £7,577 after 30 years.

Here are three of the best penny stocks to buy to boost my long-term wealth.

A top renewable energy stock

Manufacturers of hydrogen fuel cells like AFC Energy (LSE: AFC) will play a huge part in the clean energy revolution. This particular company specialises in ‘green’ hydrogen, too, the sort that doesn’t need to be generated using fossil fuels. Because of its lower carbon footprint it’s seen as the future of the hydrogen market versus dirtier ‘grey’ and ‘blue’ versions of the gas.

Green hydrogen is yet to be adopted on the scale of other low-carbon energies. And so AFC could be considered far more speculative than other renewable energy stocks. But momentum here is showing signs of improvement (in November, for instance, construction equipment giant JCB agreed a deal with Australia’s Fortescue Future Industries to import billions of pounds worth of the green gas).

Another low-carbon penny stock

I also think Berkeley Energia (LSE: BKY) could be a great stock to buy as the planet reduces fossil fuel usage. It isn’t a renewable energy stock but a uranium miner which is focussed on developing the Salamanca project in Spain. The radioactive material will be essential in helping the nuclear sector pick up some of the slack from reduced oil and gas demand.

Berkeley hopes that Salamanca will produce 4.4m pounds of uranium a year when it is up and running. That’s equivalent to a tenth of Europe’s total current usage. This penny stock is packed with potential, though remember that any issues developing the mine and getting production up and running could decimate profit targets and cause problems with project funding.

Protect and serve

I believe Corero Network Security (LSE: CNS) could deliver mighty shareholder profits as the digital revolution rolls on. As the name suggests, this tech share specialises in protecting users from cyber attacks. And more specifically, Corero provides defence from distributed denial of service (or DDoS) attacks. These are the attacks that bombard a website with large data requests that exceed site capacity and cause a crash.

Cyber attacks have been around for decades but the number is growing particularly strongly today. That’s thanks in parts to the rapid rise of state-sponsored electronic warfare to take down companies and government installations. Smaller operators like Corero will have to paddle extremely hard to survive alongside major industry players like IBM and Microsoft. But the rate at which this industry is growing still suggests this could still be a top penny stock to own.