Here are four top penny stocks Id happily sink £500 into right now.

A high-energy growth stock?

Hydrogen power could be a massive growth market in the 2020s as people seek cleaner energy sources. It’s why I’d buy AFC Energy (LSE: AFC) for my portfolio. It’s a company whose alkaline fuel cells are used to power vehicles in the Extreme E racing series.

AFC’s contribution to Extreme E (for which it extended its contract last month) has given it a stage to show off its technology and prove its reliability. It’s a strategy that could reap huge rewards because sales of hydrogen-powered vehicles are tipped to boom.

Indeed, Transparency Market Research thinks demand for hypercars — a category which is leaning more heavily on hydrogen technology to improve speeds — will grow at an annualised rate of 11.6% between now and 2031.

It’s possible that AFC could enjoy soaring demand for its products for other applications as well. Just this week, the business announced an agreement with Spain’s ACCIONA to deploy its first hybrid fuel cell at a site near Cádiz, Spain.

AFC Energy faces intense competition from other providers of energy-producing technology. But this is still a penny stock that’s packed with potential as the clean energy revolution takes off.

Going for gold

I think gold stocks remain an attractive asset class to buy today. Buying bullion-producing companies rather than the metal itself exposes investors to the often-risky mining sector. Exploration, development and production setbacks that smack profits can be common.

That being said, the pull of big dividends still makes many gold producers highly attractive, in my book. This is why I’d buy shares in Centamin (LSE: CEY) today. The dividend yields here sits at 5% for 2022 and 5.1% for next year.

Gold prices recently exploded to their highest since late 2020 as tension surrounding the Ukraine war intensifies. At $1,940 per ounce, it seems that the yellow metal could be primed for a charge to fresh record highs in the days ahead too.

But it’s not just geopolitical and macroeconomic worries that are spooking investors as the West and Russia collide. Gold prices have been steadily gaining ground because of fast-rising inflation in parts of the world. This is a problem that threatens to worsen too as energy values increase along with prices of other key commodities, from wheat and aluminium to coffee beans.

Consumer prices are rising at a rate not seen for decades in the US and the UK. And data earlier this week showed such inflation hit 5.8% in February. This was up sharply from 5.1% a month earlier and the highest level on record.

I wouldn’t just buy Centamin shares because of the positive near-term outlook for gold prices however. I think the penny stock could deliver excellent shareholder returns as it steadily ramps up annual production from its African assets. It is looking to produce half a million ounces of gold each year from its Sukari mine.

Riding the gaming revolution with penny stocks

The mobile gaming segment looks set for further strong growth in the post-pandemic era. It’s why I’m considering buying Gaming Realms (LSE: GMR) today. This penny stock develops and licences games software to betting companies and broadcasters. The business is perhaps best known for the blockbuster Slingo line of games.

I like the aggressive steps the business is taking to exploit this theme as well. The US market is opening up rapidly to the gambling industry and Gaming Realms last year launched its products into Pennsylvania and Michigan. Its rapid international expansion has also seen the software giant launch its titles in the Netherlands and Spain in more recent months.

Gaming Realms added dozens more licensing partners to its books in 2021. This helped revenues and adjusted earnings rise 27% and 70% respectively year-on-year.

But I am concerned about the threat of tightening regulations to the gambling industry and, by extension, to Gaming Realms. Last week, UK regulators slapped 888 Holdings with one of the largest fines in history in a sign that patience is beginning to wear thin. But, on balance, I still think the potential benefits of owning Gaming Realms outweigh the possible risks.

Things are warming up

I think demand for insulation products could also soar as fears over the climate crisis increase. This is why I’m considering loading up on Kingspan Group (LSE: KGP) shares right now. The business sells a wide range of building materials across 70 countries, but is perhaps best known for its energy-saving products.

Kingspan reckons the total energy saved by its insulation boards, panels and similar products between 1993 and 2018 was equivalent to 20m cars being taken off the road. The huge difference that these types of products can make to reducing carbon footprints means people are spending small fortunes to improve their home insulation. Businesses are also spending increasing amounts here to help them meet their carbon targets.

Sales of Kingspan’s insulated panels leapt 45% year-on-year in 2021. And I think they could continue rising strongly too as people take steps to protect themselves from soaring energy costs. A recent study showed that Britons living in F- and G-rated homes on the energy efficiency scale stand to be £390 worse off than those in C-rated properties when new price-cap rules come into force in April.

It’s true that Kingspan could see demand for its materials sink if the global construction market slows. But, on balance, I still think the pivotal role of its products in tackling climate change could help me make solid long-term returns.

Demand for the penny stock’s dairy products could fall sharply as diets which contain no, or lesser amounts, of animal-derived products grows. But I think sales of its nutritional supplements and ingredients might explode as participation in sports and fitness activities takes off. And this provides plenty for UK share investors like me to get excited about.

Glanbia is the largest producer of whey isolate in the US. It also makes products under the Optimum Nutrition label, the world’s most popular performance nutrition brand. The sports nutrition market is tipped for monster growth (Grand View Research, for example, thinks the market will be worth $34.5bn in 2028, versus $16.7bn today). And it’s focused on global expansion to make the most of this opportunity.

Taking steps for growth

I also like the steps it’s taken to embrace the e-commerce growth boom. A whopping 70%-plus of revenues at its Glanbia Performance Nutrition were generated online last year, up from below a third just five years earlier.

Today, Glanbia changes hands on a price-to-earnings (P/E) ratio of 22 times. This isn’t exactly low and could prompt a sharp share price reversal if profits don’t grow as expected. Still, I think its extensive exposure to one of the fastest-growing consumer industries makes it worthy of a premium rating.

A penny stock for the gaming boom

Grabbing a slice of the mobile gaming market is another good idea, in my opinion. This is where Gaming Realms (LSE: GMR) comes in, a tech business which creates and licences casino games for use on mobile phones and tablet PCs. Its most famous product is the line of highly-popular Slingo games.

Gaming Realms is making big strides in North America and this week it announced its provisional iGaming Supplier Licence in Michigan had been upgraded to a full licence. This matches the licences it already has to operate in Pennsylvania and New Jersey. The business also has submitted an application to operate in Ontario.

Revenues are soaring!

In other encouraging news Gaming Realms said that content licensed revenues had leapt 35% year-on-year in the third quarter. It added too, that its new licensing and games pipeline “has also grown”.

The business has terrific opportunities for growth across its North American European markets, and I’m impressed by the pace at which its expanded its list of partners over the past year alone (industry heavyweights like 888casino.com, DraftKings and Paddy Power Betfair, for example, all launched Slingo Originals titles in 2020).

Of course gaming is a highly-regulated industry and any legislative changes could have a significant impact on Gaming Realms’ profits. However, as things stand today I think there’s a lot to be encouraged by here. Like Glanbia, I’d happily buy it for my shares portfolio today.

As a long-term investor however, I’m not put off by the prospect of any short-term price volatility. This is because I do proper research to identify quality before buying UK shares of any price. This way I can be confident that, over an extended time horizon, any penny stocks I buy will rise in value just like any other stock. And I can potentially make lots of money in the process.

With this in mind, here are two top penny stocks I’m thinking of buying for my Stocks and Shares ISA today.

A gaming great

Online gambling has gone from strength to strength in recent years. City analysts don’t think this phenomenon is anywhere close to running out of road either, which is great news for Gaming Realms (LSE: GMR).

This UK penny stock designs and licences casino games for mobile devices, putting it in one of the box seats for the next decade. Fortune Business Insights reckons the internet betting market will be worth $158.2bn by 2028. This compares with the $74.2bn it’s been estimated at this year.

Encouragingly, Gaming Realms is making sound progress in the gigantic US marketplace too. It’s been granted supplier licences this year in both Pennsylvania and Michigan. And last month, it launched its Slingo Originals games in Michigan with industry giant BetMGM.

It’s true that Gaming Realms operates in a highly-regulated environment, representing a clear danger to future earnings. But the popularity of its brands and its games, allied with its ambitious expansion in this fast-growing marketplace, should still make its investors handsome returns, in my opinion.

Catch a top penny stock

Fishing has long been a popular British pastime, and the number of people taking up the hobby has boomed since the Covid-19 outbreak last year. The Environment Agency sold a staggering 1.02m individual freshwater rod licences to adults living in England last year. This was up 16% on an annual basis and bodes extremely well for penny stock Angling Direct (LSE: ANG). Sales at the retailer rocketed 27% higher in the 12 months to January.

Angling Direct isn’t just making a splash in its home markets however (turnover here rose 31% last year). Revenues in its core European territories of Germany, France and The Netherlands soared between 29% and 44% in fiscal 2021.

The penny stock’s strong online proposition has also helped to turbocharge revenues growth over the past 12 months. As has its position as a one-stop shop for everything the fisherman needs to cast off.

But competition is fierce and the likes of Amazon pose a severe threat to future profits. However, I still think Angling Direct has the mettle to also generate great shareholder profits in the years ahead.

That said, I’m still on the hunt for some of the best stocks to buy for my Stocks and Shares ISA today. Should I add the following two UK shares to my portfolio?

A top UK turnaround share?

Latest financials from Aston Martin Lagonda (LSE: AML) suggest that the luxury carmaker might be turning the corner after 2020’s disasters. The FTSE 250 firm shifted more than double the number of motors in January to March than it did a year earlier. Provided there are no more Covid-19 lockdowns, the future looks quite bright for Aston Martin and its share price. Research from Knowledge Sourcing Intelligence suggests that the global sports car market will be worth $56.3bn by 2025. Compare that with the $31.6bn it was estimated at in 2019.

That said, I’m not tempted by the Aston Martin share price in the hope that more coronavirus disruption doesn’t occur. Infection numbers are steadily falling but the battle against the pandemic is far from won. This is a massive concern for the carmaker that still has more than £700m of net debt on its books. That being said, I like the immense brand power of the British marque (it sits joint-second on a list of the UK’s most popular car brands, according to YouGov). And I’m encouraged by its move into the rapidly-growing SUV space as well. I might revisit the carmarker later down the line but for the time being I’ll sit on the sidelines.

A better ISA buy

I’m sorely tempted to invest in penny stock Gaming Realms (LSE: GMR) today, though. This UK tech share makes casino and arcade games and then licences them out to gambling companies (its most famous games franchise is the highly-popular Slingo, a format that combines elements of bingo and slots). It therefore has a robust position in a genre that’s booming in popularity. According to Statista, casino gaming was the fastest-growing genre among mobile phone users in the US in the first half of 2020. Downloads of these games rocketed 39.1% year-on-year in the period.

I think that Gaming Realms is packed with promise. But it’s worth remembering that penny stocks (this UK share trades around 39p) can be prone to extreme price volatility. Even a small number of sale orders can cause a share price to fall off a cliff. Indeed, this particular share has fallen almost 20% in value over the past month alone. Aside from company-specific factors, there are several significant macroeconomic factors (we’re talking about the fight against Covid-19 and signs of soaring inflation here) that could prompt fresh waves of share price weakness in the short term and beyond.

Home comforts

A bright outlook for the UK homes market encouraged me to invest in FTSE 100 shares Taylor Wimpey and Barratt Developments a few years back. Even though the pandemic has smacked the economy these theoretically-cyclical shares remain as attractive as ever, in my opinion.

A string of factors have helped homes demand to continue climbing in the UK, from increased government support for first time buyers, to low interest rates and extreme competition in the mortgages market.

These drivers look likely to remain in play in the Irish housing market too. And so I’d consider buying penny stock Cairn Homes (LSE: CRN) for my ISA. This particular UK share trades on a low forward price-to-earnings growth (PEG) ratio of 0.7. It carries a gigantic 11% dividend yield for 2021 too.

Analysts think annual earnings here will rise by around a fifth year-on-year in 2021, though bear in mind that shortages of key materials could hamper Cairn Homes’ build rates and thus cause these estimates to miss their target.

Another cheap penny stock

I believe Gaming Realms (LSE: GMR) offers some staggering value at current prices as well. City analysts think annual earnings here will climb around 280% in 2021, resulting in a corresponding PEG multiple of just 0.2. Remember that a figure below 1 suggests that a UK share might be undervalued at current prices.

This hi-tech penny stock builds software for slots and casino games that can be played on mobile phones and tablet PCs. It’s therefore in the box seat to exploit the stunning growth in the online gambling industry right now. Indeed, Gaming Realms, which licences its games to betting and gaming operators, launched with 26 new partners across the globe last year.

I think this company is a great buy despite the huge threats posed by the highly-regulated nature of the gambling sector. Any law changes could severely smack demand for Gaming Realms’ product.

A FTSE 100 favourite

BAE Systems (LSE: BA) doesn’t fall within penny stock territory of below £1 a share. But I think it’s still a great UK value share at current prices. City brokers think annual earnings at this FTSE 100 share rise 3% in 2021.

Therefore the defence contractor trades on a quite-reasonable price-to-earnings (P/E) ratio of 12 times. What’s more, the current BAE Systems share price means the dividend yield clocks in at an inflation-mashing 5%.

Like any UK share, this FTSE 100 firm isn’t without its share of risk. For one, the business sells a lot of its goods to Saudi Arabia. This leaves it vulnerable to possible export bans to the Kingdom like we’ve seen in the past. That said, I still think BAE Systems is a top blue chip to buy right now.

I expect global arms spending to keep rising annually for the considerable future. And key contractors like this are well-placed to benefit.