Here are two I think will recover strongly from current weakness and deliver excellent long-term returns for my portfolio.

Science in Sport

Price: 54p per share
Market cap: £77m

Broader demand for goods and services drops when times are tough for consumers. But I believe Science in Sport (LSE: SIS) might prove more resilient than many UK shares. This penny stock manufactures protein powders, energy gels, and other nutritional supplements that help keep sporty people going.

People don’t drop their sports and fitness goals when times get tough. Even if they can’t afford to go to an expensive gym they can switch to a low-cost operator. Or they can work out in other ways like road running using home fitness equipment. So I’m expecting demand for Science in Sport’s products to remain solid.

From a growth perspective, I like the firm’s strategy of developing the brand through partnerships with elite sports teams and organisations. It has teamed up with 330 such bodies, and progress with NBA basketball and NFL football teams in 2021 helped drive US revenues 50% higher last year.

Intense competition is likely to remain a threat to Science in Sport. But I’m convinced the company could still deliver terrific shareholder returns from its rapidly growing market. Grand View Research analysts think the sports nutrition sector will almost double in size between now and 2030 (to $82.3bn).

AfriTin Mining

Price: 6.8p per share
Market cap: £75.7m

Commodities producers like AfriTin Mining (LSE: ATM) aren’t usually popular shares when economic conditions worsen. The prices of the stuff they produce can fall off a cliff when fears over demand increase. AfriTin’s recent rapid price declines illustrates this point and poses a big threat to this particular mining stock.

I’m still thinking of buying AfriTin shares today though. This is because I’m focussed on the company’s long-term profits outlook and I expect sales of its tin to rocket in the years ahead. I’m tipping consumption of the soldering metal to increase as demand for consumer electronics surges.

I think this tin miner could be an especially lucrative way to exploit the coming ‘commodities supercycle’ too. For one, expansion of its flagship Uis project in Namibia should lift tin production significantly in the years ahead. Expansion of the current operation should lift output from 850 tonnes per year to 2,800 tonnes in the medium term.

I also like the business because work at Uis will also give it significant exposure to lithium and tantalum. AfriTin hopes drilling work at the site will lift the resource estimate from 71.54m tonnes of tin to 200m tonnes of tin, lithium, and tantalum. Lithium demand should rise strongly along with sales of battery-powered electric vehicles.

Looking good

The Coats Group (LSE: COA) share price recently closed at its most expensive since July 2019 before profit taking set in. Yet despite these gains the clothing material manufacturer still looks exceptionally cheap on paper.

Today it trades on a forward price-to-earnings growth (PEG) ratio of 0.9. This is just below the benchmark of one that suggests a UK share could be undervalued.

I think Coats Group has a very bright future. As one of the world’s leading manufacturers of threads, zips, yarns, and trims it will play a critical role in clothing a rapidly-growing world population.

Furthermore, Coats Group’s pan-global operation also leaves it well placed to profit from soaring consumer spending levels in emerging markets. I’d buy the penny stock even though the cost of living crisis clouds its sales outlook in the nearer term.

Sports star

Science in Sport’s (LSE: SIS) share price has plummeted in recent sessions. The sports nutrition specialist recently closed at one-year lows following a frosty reception to its latest financials.

It’s no shock as to why investors headed to the exits. SIS’ pre-tax losses swelled to £5.3m in 2021, it said, caused by “investment in technology and data science” and share-based bonus payments to employees. This was up considerably from £2.3m the year before.

I’ve been weighing up whether SIS’ plunging share price represents an attractive dip buying opportunity. And I think the answer is yes. I think it’s a great way to capitalise on the rapidly growing sports nutrition market. Last week SIS said that it expected revenues in March to set a new monthly record.

Science in Sport has excellent brand recognition through its own-branded and PhD Nutrition–labelled products. It has also invested heavily in technology to boost online sales.

FInally, SIS has spent huge sums in the supply chain to eventually help it accommodate £200m worth of yearly sales. The firm reported revenues of £62.5m in 2021.

Sure, the business operates in a highly-competitive industry. But I think its excellent momentum in a fast-growing industry merits a close look.

Another cheap penny stock to buy

Building materials supplier Breedon Group (LSE: BREE) hasn’t suffered the sort of shocking sell-off as SIS. But recent share price falls still leave it looking mighty cheap.

For 2022 Breedon trades on a forward PEG ratio of 0.5. I think it could prove to be a brilliant penny stock to buy as construction activity in the UK grows. More specifically I expect it to thrive from healthy infrastructure investment and a step-up in house building.

Breedon supplies bricks, tiles, aggregates, concrete, and a wide range of other essential building products. Profits might suffer if broader economic conditions deteriorate. However, I think this risk is baked into the company’s dirt-cheap share price. I think its a great growth stock for me to buy today.

Woodbois Limited

Soaring demand for sustainable products means Woodbois Limited (LSE: WBI) could have a very bright future. This penny stock produces dozens of species of African hardwood from its assets in Gabon and Mozambique. And the company is ramping up capacity for its veneer and sawn timber lines to make the most of this massive growth opportunity.

Woodbois stands to gain from rising levels of urbanisation in emerging markets as well as that aforementioned switch to timber from other less environmentally-friendly materials. With housebuilding shortages also needing to be addressed, and tree planting an essential tool in helping lawmakers hit their net zero emissions targets, analysts at asset managers Gresham House think global timber demand will soar 170% over the next 30 years.

It’s true that the fragile economic recovery poses a threat to Woodbois. Demand for its hardwood could suffer badly if broader construction activity sinks in its markets. But as a long-term investor this low-cost UK share still has a lot to offer.

European Metals Holdings

Lithium business European Metals Holdings (LSE: EMH) has steadily lost ground over the past six months despite a steady stream of data showing how electric vehicle (EV) sales continue to boom. I see this as an opportunity to pick up a terrific EV-geared stock at a cut price.

You see, European Metals is developing the Cinovec lithium project in Czechia. The asset is Europe’s biggest lithium resource (as well as one of the world’s biggest tin deposits). In fact, the business recently hike its ore reserve estimates there from 34.5m tonnes to an even-more impressive 54.5m tonnes.

What I also like about European Metals is that Cinovec is located near many of the continent’s largest vehicle manufacturers. It therefore already has a potentially significant customer base on its doorstep.

Development problems at Cinovec could cause the penny stock’s share price to sink further. But, on balance, I think the possible rewards of owning European Metals outweighs the risks.

Science in Sport

Nutritional product manufacturer Science in Sport (LSE: SIS) isn’t without dangers of its own. Rising commodity prices pose a significant threat to the company’s bottom line in the short term and potentially beyond.

But, in my opinion, this danger is more than offset by the huge revenues potential of its winning sports supplement brands PhD Nutrition and Science in Sport. These hugely-popular labels cover a wide range of products for the get-fit obsessed, such as protein shakes, energy gels and vitamin supplements. Latest financials showed sales of these goods soar 25% in 2021, above the company’s own heady expectations.

I think Science in Sport could continue to print impressive revenues growth too as the market expands at breakneck pace. Industry experts at Mordor Intelligence think the sports nutrition sector will grow at a whopping compound annual growth rate of 12.5% between now and 2027.

Last time out, I analysed a few top-quality penny stocks I think could prove terrific investments for me. I think the following small- and micro-cap shares might also help me to make a mountain of cash.

Coats Group

The clothing needs of a rapidly growing global population create plenty of opportunity for Coats Group (LSE: COA). As a major manufacturer of trims, zips and threads, this penny stock plays a vital role in garment production. And it is taking steps to build its market share by improving its sustainability credentials. It’s a tactic that seems to be paying off too.

Revenues from Coats’ EcoVerde line of recycled sewing threats increased fivefold in the first six months of 2021. The company recently launched its EcoRegen range of biodegradable threads in the hope if replicating this success too.

At current prices, Coats trades on a forward price-to-earnings growth (PEG) ratio of 0.8. A reminder that any reading below 1 suggests a stock could be undervalued. I’d buy the business even though demand for its products could sink during economic downturns.

Agronomics Limited

The number of people either eliminating or reducing the meat in their diets is ballooning. Rising concerns over animal welfare and the environmental impact of livestock farming means that numbers are expected to keep rising sharply too.

But there are still plenty of people who like the taste and texture of meat-based products. This is where Agronomics Limited (LSE: ANIC) bridges the gap. This penny stock invests in companies at the cutting edge of the synthetic meat industry. These include lab-grown beef producer Mosa Meat, cultivated crustacean manufacturer Shiok Meats, and even animal-free pet food maker Bond Pet Foods.

Analysts at McKinsey & Company think the synthetic meat industry could be worth $20bn by 2030. That’s under its medium-growth forecasts which suggests a market value of $1bn by 2025. The market opportunity for Agronomics is clearly huge.

There are many specialised companies in the animal-free food category which Agronomics has to compete with. It also faces colossal challenges from major food manufacturers such as Tyson Foods who have the clout to make life very difficult. Still, I think the quality of the companies that Agronomics invests in could still make it an industry winner.

Science in Sport

The steady change in people’s diets, and in particular rising demand for protein products, is something that Science in Sport (LSE: SIS) also looks set to exploit to the max. This penny stock manufactures protein powders (and other sports supplements) under its ultra-popular brands PhD and Science in Sport.

The importance of living a healthy lifestyle has really gained traction in recent years. Sports participation has leapt and so has demand for Science in Sport’s products — sales at the company rocketed 25% in 2021.

Industry analysis suggests that the company’s market will keep growing at breakneck pace too. Analysts at Grand View Research think the global sports nutrition market will expand at a compound annual growth rate of 8.5% between 2022 and 2030.

I like Science in Sport because of the quality of its products. I also like the company’s strategy of building brand strength by building relationships with elite athletes and sports teams across the globe. The sports nutrition market is highly competitive, but I think this penny stock has the goods to make a splash.

DP Poland

Online food delivery is another industry set for explosive growth over the next decade. One UK share I’m considering buying to capitalise on this is DP Poland (LSE: DPP). I’m tipping takeaway market growth to be particularly explosive in this Eastern European emerging market as people’s incomes sharply rise.

This penny stock is the master franchisee of the Domino’s Pizza label in Poland. This is a big deal because the 62-year-old US chain has one of the strongest brands in the business. I believe it’s one of the reasons why DP Poland’s sales are soaring right now. Like-for-like sales in the final quarter of 2021 jumped 15.6% year-on-year. They were also up 11% from the corresponding 2019 period.

My main concern for DP Poland is the possibility of lasting cost pressures. Indeed, the business says that rising labour and food costs would cause it to miss profits forecasts for 2021 despite those soaring sales. Still, in my opinion, I think the potential rewards of owning this British stock offset the risks. Researcher Statista thinks the Polish online food delivery market will more than double in size between 2021 and 2025.

Van Elle Holdings

I think the stars are aligned for ground contractor Van Elle Holdings (LSE: VANL) to experience strong revenues growth this decade. As with Brickability (which I tipped as a top stock to own in the first part of this article), I think demand for its services will soar as housebuilding in the UK revs up. I also think sales at Van Elle will boom as infrastructure spending on these shores steadily increases.

Activity at the penny stock took a beating in 2020 due to Covid-19-related stoppages. The threat for more disruption remains too as the public health emergency drags on. But, in my view, the possible rewards of holding Van Elle in the years to come outweigh the dangers. The company is a market-leader in the field of infrastructure creation and it’s tipping conditions across its core sectors to remain strong moving into next year at least.

I’m also thinking of buying Van Elle because of its bright dividend outlook. City analysts are expecting dividends to return in this fiscal year (to April 2022) following recent cancellations. And they’re expecting them to rise sharply over the next few years too, thanks to Van Elle’s strong trading outlook and robust balance sheet.

This means the company’s 0.9% dividend yield for this year leaps to 3% and then to 4.5% in financial 2023 and 2024 respectively.

Sports nutrition specialist

Science in Sport is one of the world’s leading performance and nutrition brands dedicated to enhancing sports performance. Its products are derived through scientific formulations and cutting edge technology to provide optimal performance solutions and nutritional needs. SIS partners with over 150 football teams throughout the world, as well as the English Institute of Sport, USA Triathlon team, the German Cycling Federation, and others.

Penny stocks are those that trade for less than £1. As I write, Science in Sport shares are trading for 71p per share. At this time last year, the shares were trading for 44p, which is a 61% return in a 12-month period. The shares have surpassed 2020 pre-market crash levels.

Why I like SIS

The healthcare and gym market has been booming since the pandemic started. The pandemic shone a new light on the importance of healthcare and remaining fit and healthy. In addition to this, many gyms closed for long periods, so many resorted to home workouts. When gyms reopened, many saw lots of new members. SIS is primed to benefit from this through its product range of consumer performance and nutrition goods. SIS also has a direct selling arm so does not have distributors or agreements with gyms meaning it can keep more of the revenue.

SIS’s performance recently and historically has been promising too, although I realize that doesn’t future performance. Looking back, I can see that revenue increased year on year for four years until 2020. Gross profit also increased in the same period. This shows me SIS has been growing well and performing well consistently. SIS yesterday released a pre-close update for 2021 results. For the period ended 31 December, it said it expects to report revenue and EBITDA growth compared to 2020 levels. SIS’s net cash balance looks healthy but has declined compared to 2020 due to investment in new brands and online platforms and infrastructure. This seems to have helped as online sales grew as per the recent report.

Risks and verdict

The sports performance and nutrition market is extremely lucrative and competitive. My concern here is although Science in Sport is a burgeoning brand with some excellent relationships and real long-term promise, there are other better known firms in the market. In addition, bigger consumer goods firms could join the market with established business models, a built-in customer base, as well as millions to spend on research and development and products too.

Overall, I would happily add Science in Sport shares to my portfolio with £500 to invest right now. I am eager to see full-year results in their entirety soon and believe growth across all areas could catapult shares upwards even further. As penny stocks go, SIS represents a bargain in my eyes with an established brand, business model, and record to back it up.

Rupert Hargreaves: Trifast

Trifast (LSE: TRI) specialises in the design and manufacture of high-quality industrial fastenings. After a slowdown in demand last year, sales have rebounded this year. Revenues in the first half increased 30% compared to 2020 and are now ahead of 2019 levels.

As the global economy continues to rebuild after the pandemic, I think this trend could continue. Management is also looking to complement organic growth with acquisitions.

At the beginning of September, Trifast acquired Falcon in the USA, and management has said that the search for additional acquisitions continues “apace.”

Considering the growth potential, I would buy the stock for my portfolio. Some challenges it could face that may hold back growth include cost and wage inflation pressures.

Rupert Hargreaves does not own shares in Trifast.

Christopher Ruane: Card Factory

As people buy Christmas cards, small-cap stock Card Factory (LSE: CARD) is on my radar. It’s 56% higher than a year ago, but well below its Spring highs.

The company sharply cut its loss in the first half. The Christmas season should be busy. Increasing moves online could help grow sales. The company is cash generative and cut net debt by a third in the first half. But Card Factory remains risky. Its shops can see sales plummet if there are lockdowns, and supply chain inflation could hurt profits.

Christopher Ruane does not own shares in Card Factory.

Roland Head: Spectra Systems

I think that security technology specialist Spectra Systems (LSE: SPSY) could be a quality company at a reasonable price.

Spectra specialises in providing authentication technology for documents, consumer goods and currency. For example, Spectra provides the security features for many countries’ banknotes and the equipment needed to test them.

Banknotes are Spectra’s biggest market, and this is probably the main risk for investors. Use of paper money is falling and the business could struggle to grow.

However, Spectra is diversifying and continues to win new contracts. The group also upgraded its profit guidance for 2021 in October. I think the shares look reasonably priced at current levels. There’s also a tempting 4.7% dividend yield. This is a stock I’d buy today.

Roland Head does not own shares in Spectra Systems.

Andy Ross: finnCap  

Financial company finnCap (LSE: FCAP) is a great small-cap stock in my opinion. Apart from its small market capitalisation, which gives it plenty of headroom to grow into a much larger company, I really like finnCap’s financials. They indicate to me a stock that has serious growth potential. 

The group has a three-year compound annual growth rate (CAGR) for sales of 29%. This is important because, as an investor, I want to know that demand for a company’s products/services is continuously increasing. The operating margin is improving, so all in all it seems like potentially a great time to buy the shares.  

Andy Ross does not own shares in finnCap.

Royston Wild: Science in Sport 

I’d use recent price weakness at Science in Sport (LSE: SIS) as a dip-buying opportunity. The sports nutrition giant has fallen 10% in value over the past month. Demand for the products it makes is rocketing as peoples’ desire to live healthier lifestyles grows and fitness activities become more popular. Science in Sport’s revenues jumped 24% during the six months to June. 

This small cap’s more than doubled in value during the last year. If industry analysts are to be believed there should be plenty of opportunity for Science in Sport’s share price to continue soaring too. Experts at Statista for example think the global sports nutrition market will be worth $35.4bn by 2026. That’s up significantly from the $16.5bn it was valued at last year. Through its popular products I think the business should make big profits in this favourable landscape.  

Royston Wild does not own shares in Science in Sport.

Zaven Boyrazian: iomart

iomart (LSE:lOM) is a cloud-computing business trying to take on industry giants like Amazon, Alphabet, and Microsoft. That’s quite a tough bunch of competitors, so it’s not surprising to see revenue growth struggle. However, management has since begun pursuing a niche in the hybrid-cloud market through bolt-on acquisitions.

It will take some time before this new strategy starts yielding results. However, iomart continues to be supported by fairly impressive cashflows courtesy of its high customer retention and 93% recurring revenue.

There is obviously no guarantee of success. And using an acquisitive approach has led to an increased debt position that adds more risk. But given the potentially explosive returns of becoming a new leader in cloud computing, I think the risk is worth the reward.

Zaven Boyrazian does not own shares in iomart, Amazon, Alphabet or Microsoft.

Paul Summers: Bioventix

Although still far from being cheap, I think shares in biotech firm Bioventix (LSE: BVXP) are starting to look attractive. Stock in the small-cap antibodies supplier has fallen 20% in value in 2021 so far. 

At least some of this selling pressure has been due to hospitals continuing to prioritise dealing with the pandemic over diagnosing people for other things. To make matters worse, understandably cautious patients aren’t even reporting symptoms to healthcare professionals. As a result, Bioventix’s main business has been suffering.

I reckon this might be a great contrarian opportunity. BVXP’s returns on capital and margins are some of the best on the market. The balance sheet also looks sound. Any indication that Covid-19 is being beaten back and the shares could rally. 

Paul Summers has no position in Bioventix

There have been rare causes for cheer, however. The following penny stocks, for example, have all risen  in value over the past month. Here are three I’d spend £500 on each right now.

More forecast-beating trading news

The HSS Hire Group (LSE: HSS) share price has risen 9% during the past month. This means that in the last 12 months it’s gained 28% in value. The business hires out tools and construction equipment and is thus highly cyclical. Yet the strength of trading here has allowed its share price to rise despite fears over the British economy. The penny stock hiked its earnings expectations yet again in half-year financials released last month.

Trading at HSS Hire would likely cool again if soaring inflation chokes off the economic recovery. But the business has made huge strides to improve its balance sheet, which should help cushion it against any fresh trading problems. The sale of its All Seasons Hire division last month has pulled its leverage down to just 1x. Its improving financial position will also help it to execute its long-term growth plans.

Sporting great

Science in Sport (LSE: SIS) is also managing to defy the broader gloom enveloping UK share markets. The protein shake manufacturer has risen 2% in value over the past month, taking total 12-month gains to 111%. Sales of its products are booming as consumers’ fitness focus boosts demand for its nutritional products. Revenues at the penny stock jumped 24% in the six months to June, financials last month showed. And encouragingly, new product innovations made up a quarter of this total.

The sports supplement market is one that looks set for further stratospheric growth too. Analysts at Grand View Research think it will be worth $34.5bn by 2028, more than double its size today. I think Science in Sport is a great way to ride this phenomenon despite the threat of intense competition to future sales.

Another penny stock on a roll

Like Science in Sport, Finsbury Food Group (LSE: FIF) has also risen 2% in the last month. Consequently the bread, cake and morning goods manufacturer is up 71% on a 12-month basis. I think its role in a defensive sector (we need to eat regardless of economic conditions, right?) makes it a top buy for these uncertain times.

As a long-term investor, I’m excited by the impressive progress Finsbury Food is making on foreign shores. Sales outside the UK account for just 12% of the group total today. But the rate at which they’re growing demands serious attention. Up 13.4% in the 12 months to June, this was far better than the 1% increase reported on home turf. I’d buy this penny stock despite the threat that rising Covid-19 cases poses to its foodservice business.

A rock-solid penny stock

Science in Sport (LSE: SIS) is a UK share which put in a remarkably resilient performance last year. Despite the mass closures of gyms and fitness centres the protein-powder-and-nutritional-products manufacturer only endured a fractional sales decline during pandemic-hit 2020.

Strong internet sales have helped the penny stock impress over the past 12 months. And Science in Sport is spending heavily in marketing and its platforms to make the most of the e-commerce explosion moving forwards. Online sales at the business leapt 39% year-on-year in 2020.

I think demand for Science in Sport’s goods will keep growing as people try to eat healthier and exercise more often. And the company’s investing in manufacturing and its supply chain to drive profits growth. I’d buy it for my ISA despite the fierce competition that it faces from the likes of Maximuscle.

The green machine

Renewi (LSE: RWI) is a low-cost UK share I’m backing to perform brilliantly this decade. The Covid-19 crisis has exacerbated existing concerns over sustainability and the impact of humans on the environment. It’s a theme this penny stock — which converts large amounts of the waste it receives into products or energy — is well-placed to exploit.

Demand for its services from commercial customers has only taken a slight whack despite the public health emergency. This has prompted Renewi to upgrade its profits guidance several times over the past year. And I expect the small-cap to get busier and busier as recycling becomes ever more important.

It’s true that changing legislation in its North American and European marketplaces could hit the penny stock’s earnings hard. But at current prices, I still think Renewi’s shares represent a great buy. Today, the business trades on a forward PEG ratio of just 0.1. A reading below 1 suggests a stock could be trading below value.

An electrifying ISA buy

Pulling raw materials out of the ground is notoriously difficult and extremely expensive. And this means UK shares like Bushveld Minerals (LSE: BMN) can suffer sudden and severe profits trouble. This particular penny stock is a major vanadium producer which it then uses to manufacture components for vanadium redox flow batteries (or VRFBs).

Despite these risks, I think Bushveld is a company that could deliver exceptional profits growth over the medium-to-long term. Green energy sources like solar and wind are exceptionally unpredictable, which means that hardware to store energy when conditions are favourable is essential. And with renewables rising in popularity sales of VRFBs are soaring. Meanwhile, rising energy costs mean individuals and businesses are spending more on the sort of products Bushveld manufactures too.

The experts at Valuates Reports think the VRFB market will be worth $6.2bn by 2026, up from $625.4m in 2019. It’s an upward trend that could give Bushveld Minerals explosive profits and make ISA investors like me excellent returns.

ReNeuron isn’t poised to post a profit any time soon. In fact City analysts expect the firm to remain loss-making until 2022 at least. However, the scheduled release of key data in the next couple of years — starting with data for its hRPC treatment used for the retinitis pigmentosa eye complaint later this year — could set it up for exciting growth later this decade.

What’s more, ReNeuron could possibly emerge as a top takeover target before long. Major players across the healthcare segment are boosting their positions in cell and gene therapies, and more strong end results for its eye and stroke treatments could see M&A interest explode.

Getting in great shape

Another top trend to consider grabbing a slice of is the fitness sector. Going to the gym already seems like an established part of everyday life but in truth it’s only getting started.

According to Wiseguy Research Consultants, the global gymnasium market will be worth a whopping $105bn by 2025. This is up substantially from the market value of $85.2bn punched in 2017. It represents a compound annual growth rate of 2.7%.

An explosion in the number of gym bunnies suggests that Science in Sport (LSE: SIS) would be a good investment today. This company makes the protein powders, energy gels, and vitamins and minerals that can be found in many a fitness fanatic’s locker. And boy, are sales of its products booming right now.

Underlying sales of the company’s SiS-labelled goods soared 24% in 2019. Corresponding revenues from its recently-acquired PhD brand shot 23% higher from the previous year as well. Science in Sport’s investing heavily in the white-hot e-commerce and international segments to turbocharge its own earnings growth. It’s a strategy that is already paying off handsomely. Internet and overseas sales boomed 34% and 44% respectively in 2019.

Fighting fit

Some research actually suggests that sports nutrition market growth will eclipse that of the gym sector in the coming years. Take Statista, for instance. Researchers here expect the worldwide sports nutrition market — worth around $50.8bn as of 2018 — to rise by more than $30bn in value in three years. Statista expects it to be worth $81.5bn by 2023.

City analysts expect Science in Sport to finally move into the black in 2020. It wouldn’t be outrageous to suggest that earnings should keep shooting higher through the new decade. Like ReNeuron, I reckon this is a top stock to buy for the 2020s.

After this recovery, I’m finding it harder to identify stocks that are attractively valued. However, I think these two stocks are exceptions with their appeal shining through any volatility clouds.

Sports and Wellbeing

Science in Sport (LSE: SIS) develops and sells premium sports nutrition products to professional athletes, sports enthusiasts and gym-goers. The takeover of the PhD protein brand at the end of 2018 has transformed the company, effectively doubling its size.

Full-year revenue for 2019 is expected to come in at around £50m, up from £21m the year before, pre-acquisition. But even before the takeover, SiS’s sales growth was on a steep trajectory, rising from just £6m in 2014.

The combination brings together Science in Sports’ energy, hydration and endurance products, with PhD’s protein bars, drinks and powders. PhD’s brands now give the enlarged group access to a much bigger and faster-growing market that is not restricted to elite athletes and sports teams.

Both brands registered strong growth of close to 25% last year, with e-commerce sales up 34%. The group aims to achieve synergies by combining distribution and sales teams, and by taking advantage of established sales channels.

2019 also saw the management team strengthened, through the hiring of a number a highly experienced executives, that have worked for the likes of ASOS, The Hut Group and Heineken.

Management is now looking further afield for growth. International sales rose 44% last year, with the PhD brand launching in Saudi Arabia, and the SiS brand entering Brazil.

Now for the bad news. The group has not yet actually made a profit, and is set to make a small loss for last year. But I think that is about to change. I would be very surprised if the group didn’t report a profit in 2020, and I believe that these shares could potentially double in value.

At present, the company is valued at £57m, which is only narrowly above its net asset value of £47m. I think that even a small profit would prompt a quick re-rating of the share price, and that is exactly what I expect to happen.

Residential Housing

Another company that has grabbed my attention is Redrow (LSE: RDW). The housebuilder trades at just eight times last year’s earnings, and looks cheap compared to its peers.

After tax-profits have grown by an average of 19% in each of the last four years, while revenues have almost doubled over the same period, to £2.1bn last year.

The fist half of the year saw Redrow achieve an impressive ROCE (return on capital employed) of 25%. The group also registered an 18% increase in private reservations, which is all the more impressive considering the unfavourable backdrop of Brexit and a general election.

This year’s sales are forecast to be heavily weighted towards the second half of the year. Given the strong order book and sales resilience in the first half of the year, I expect Redrow to report higher profits, both this year and beyond.

A dividend yield of 4%, and a chronic shortage of new housing, only strengthen my conviction.