Structural steel

First up is structural steel maker Severfield (LSE:SFR). Severfield’s share price is now down 25% over the past 12 months, at 53p as I write. But in recent weeks, we’ve seen a slight uptick from a recent low of 46.7p.

Any recession is not going to help the construction industry. But I see Severfield as having a defensive advantage for when things pick up. Structural steel is at the core of just about all major construction projects, and that has to be an investing attraction.

The biggest risk I see is that an economic turnaround might be some way ahead, and we might see more share price weakness.

But in the meantime, we’re looking at a forecast dividend yield of 6%. Cover by earnings should be reasonably strong.

Lithium

Shares in Atlantic Lithium (LSE: ALL) climbed in the early months of the year. But from a 68p peak in April, the price has been on a slide. At the moment it’s looking relatively stable at 34p.

Atlantic Lithium shares are still up 70% over the past 12 months, and it’s on the back of electric vehicle (EV) technology. Lithium is the stuff that batteries are made of, and the industry can’t get enough of it.

In the current worldwide economic turmoil, EV maker shares have tumbled. Tesla is down 23% over the past 12 months, and NIO has crashed by 70%. No wonder the appetite for lithium stocks has soured.

The biggest risk, I think, is the lack of profit. It’ll be a few years yet before shareholders see any, and there has to be a risk of dilution from any new cash raises. But Atlantic has some very promising assets. And the EV sector will surely pick up again.

Health

Shares in healthcare services firm Totally (LSE:TLY) are down 15% in the past 12 months, at 29p. But it’s another that started the year well and has fallen quite heavily in recent months. Since July, Totally shares have lost 40%.

Some of the fall is probably justified, as Totally had been on a lofty price-to-earnings (P/E) multiple. It’s admittedly hard to value a company when it turns from loss to profit, as it did in 2020-21. But today, a forecast P/E of 13 does not look stretching.

In fact, it looks very attractive when we see forecasts bringing it down to under eight next year. Analysts predict a dividend yield of 3.6% this year, and rising.

How referrals from the NHS might hold up if hospital admissions are dominated by Covid and influenza this winter is very uncertain, and that has to be a risk.

Healthcare hero

Buying certain UK-focused healthcare stocks like Totally (LSE: TLY) could be considered risky on one hand. The fast-changing political landscape creates uncertainty over what future levels of NHS funding will look like.

This particular penny stock provides a range of medical services. These include urgent care services alongside the NHS such as the 111 emergency phoneline and operating out-of-hours doctor surgeries.

However, I think Totally has a very bright future. Britain’s population is rapidly ageing and so demand for its services should steadily rise over the long term.

I also think the company’s essential operations make it a highly attractive share to buy today. Healthcare is one sector in which spending remains stable at all points of the economic cycle.

Totally awesome

The business also stands to gain from growing NHS hospital waiting lists (which hit new record highs of 6.5m last month). In this climate it can expect the nation’s free healthcare service to continue contracting out lots of work.

What’s more, Totally’s March acquisition of Pioneer Health Services will boost its chances of winning more of this business. The penny stock bought the specialist NHS secondary care services provider for £13m earlier this year.

City analysts think Totally’s earnings will rise 62% in this financial year ending March 2023. This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.2. A reading below 1 suggests a share could be undervalued.

Making money with uranium

Berkeley Energia (LSE: BKY), by comparison, is a penny stock that’s not expected to make profits any time soon.

This creates extra risk for investors. Firms in this position can be forced to tap shareholders for cash if they get into difficulties. They can also take on more debt to fund their activities.

Still, Berkeley is a mining share that’s packed with investment potential. The business owns and operates Spain’s giant Salamanca uranium project. This is a project which could produce 4.4m pounds of the radioactive element a year when production begins.

A top power play

Companies like Berkeley Energia will play a crucial role in helping countries reduce their carbon emissions.

Lawmakers across the continent are stepping up plans to extend the life of existing reactors, and/or to build new facilities to reduce their use of oil and gas. Their appetite has been intensified by Russia’s invasion of Ukraine and the uncertainty this creates for energy supplies too.

News from the European Parliament last week has boosted the outlook for Berkeley even further. This is because lawmakers have agreed that nuclear investments can be labelled as sustainable energy sources. This is significant as it could unlock billions of extra pounds to bolster the growth of the nuclear industry.

One of the best to buy now?

Last month, I said: “I think the Boohoo (LSE: BOO) share price is potentially too cheap to ignore”.  That’s still my opinion. This week’s profit warning doesn’t change the investment case for me. In fact, it seems even more compelling now given the shares over the last month or so have fallen by a quarter.

Christmas could be a boon for the company, especially if Omicron leads to more restrictions and encourages more consumers to buy online.

But with Boohoo already saying that returns are up due to shoppers sending their dress purchases back, Omicron could also dampen Boohoo sales. But I see that as a short-term issue.

Another problem is, investors seem to be turning away from fast fashion shares in general as ASOS shares have also been falling. Supply chain issues are key problems both are facing.

Boohoo shares strike me as cheap now, so combining that with its still-high (relatively speaking) level of growth, makes me think it’s a potentially profitable investment long term. It’s one of my best stocks to buy for 2022 and it won’t be long before I add it to my portfolio.

A smaller-cap income and growth option

finnCap (LSE: FCAP) could be a great small-cap growth stock, combining capital growth with income, which I think is a very powerful combination.

The group focuses on providing financial services to quite a number of listed companies, but also privately-held growth companies.

The financial services group has solid fundamentals. For example, it has a strong operating margin, which has jumped to 18.7% from 4.6%. That’s lower than earlier in the pandemic but the margin now is also higher than in 2019. Return on equity has also improved a lot in the last three years, to 29%. It was 16.4% in 2019.

The problem is, if 2022 sees a slowdown in IPOs and other fundraising activity, demand for finnCap’s services could melt away, which would hit its revenue and profits. This makes me a bit nervous.

On the plus side though, it’s a higher-yielding share. The dividend yield is around 4.8%. This income, along with it being a smaller-cap stock with growth potential and solid fundamentals, means I’m interested in buying the shares for my portfolio.

A riskier investment

Totally (LSE: TLY) is a smaller-cap penny stock that I think is also potentially one of the best stocks to buy now ahead of 2022.

The healthcare services provider should benefit from the NHS backlog as it provides insourcing. This is a system whereby hospitals subcontract medical services and procedures to it, and it uses hospital premises and equipment for delivering treatments.

In the short term, if Omicron leads to more hospital admissions this may put its general ops on hold. That could impact revenues. But longer term, I think there’s a big opportunity for the group.

An ageing population, ongoing pressures on hospitals (especially over waiting times) and increased spending on the NHS, all mean Totally has a number of factors in its favour to help boost growth.

I’m thinking it could be one of the best stocks to buy for my own portfolio, as I don’t hold any similar companies. 

A top penny stock

Totally (LSE: TLY) is a share I’m considering adding to my portfolio. The healthcare group should benefit from the NHS backlog as it provides insourcing, which is a system whereby hospitals subcontract medical services and procedures to Totally Healthcare, which uses hospital premises and equipment for delivering treatments. 

It’s also involved in the delivery of urgent care, so it’s well established with the NHS and is an important partner. All the more so in the context of the backlog has built up even more under Covid. A total of 5.7 million people were waiting to start routine hospital treatment at the end of August — the highest figure since records began in August 2007.

An ageing population, ongoing pressures on hospitals (especially over waiting times) and increased spending on the NHS, all mean Totally has a number of factors in its favour in the short and long term to help boost growth.

Potential downsides

It’s not a no-brainer investment, though. It’s very reliant on the NHS for its income and therefore the share price will likely be very sensitive to political debates around any creeping privatisation of the NHS. However, the chief executive worked for the NHS for over 20 years, including being Chief Executive of three large Primary Care Trusts. The company therefore should be able to navigate these challenges.

Another option

Argentex (LSE: AGFX) is a provider of foreign exchange services. It seems well positioned for future growth. Just recently it announced revenue was up 33% six-month period ended 30 September 2021. Profit after tax was up 22% to £3.3m.

The CEO said: “We remain confident in our future and long-term strategy to deliver on our ambitious
growth plans, and we are well placed to capitalise on the significant opportunities that lie ahead.”

When looking at its valuation, there’s a lot I like. The forward P/E is 10. The price to earnings growth ratio (PEG) is 0.4. To my mind that could mean it fits the mould of a Jim Slater-style ‘Zulu’ growth stock. These are shares that have a low PEG and therefore could be undervalued, higher-growth shares. The group also pays a dividend, often seen as a sign that management is confident in the prospects of the business and that it’s making cash.

Argentex has a market cap of only £100m, so it has plenty of potential to grow much bigger. Historically revenue growth has been strong. 

It’s keen to emphasise its business model is not built on currency speculation. It helps customers with foreign exchange. This should make it more stable than, for example, a spread-betting company. The risks it faces, I think, are primarily around maintaining client relationships, the competition it faces and, because large amounts of money are involved, cybersecurity threats.

Ultimately though Argentex is one of a select group of penny stocks I’m considering buying right now.

However, such volatility doesn’t hamper my appetite for cheap British stocks. I invest according to the returns I expect to make over a long time horizon, say a decade or more. Over this sort of timescale the very best stocks tend to sail through such choppiness and deliver mighty shareholder profits.

Here are three great-value stocks I think could help me do just that.

A cheap UK healthcare share

I’m thinking of investing in some choice healthcare shares to give my portfolio a bit more robustness. And Totally (LSE: TLY) is one low-cost medical stock I’m running the rule over right now. This business provides urgent care services in partnership with the NHS. These include the NHS 111 emergency phone line and a raft of urgent care centres across Britain.

Like many other healthcare shares, demand for Totally’s services remain strong at all points of the economic cycle. As an investor, this provides me with exceptional peace of mind. My only concern with buying this business is the constant threat that changes to health spending by the government might hit the level of new contracts and contract extensions it receives.

A counter-cyclical champion

Worsening economic conditions in Britain suggests to me that Begbies Traynor Group (LSE: BEG) could be an attractive buy today. This dirt-cheap UK share provides financial rescue and recovery services and is a specialist in the insolvency field. Naturally, trading is likely to suffer when the economy picks up again. But, for the time being, industry conditions look very favourable.

According to the Insolvency Service, the number of UK insolvencies leapt 17% quarter-on-quarter between July and September. This was driven by the number of company voluntary liquidations hitting their highest quarterly total since 2009.

I wouldn’t just buy Begbies Traynor for the short term however. I think its appetite for acquisitions could deliver excellent profits growth over the longer term too.

Raise a glass

Breakneck sales growth over at Virgin Wines (LSE: VIP) have caught my attention too. Revenues at the online wine business have rocketed 30% year-on-year during the past two fiscal years. Not only is the business reaping rewards from the broader e-commerce explosion. It’s also benefitting from soaring demand for wine in the UK.

The experts at Statista think wine sales will continue growing strongly too. They forecast annualised growth of 13.2% through to 2025. I like Virgin Wines’ excellent customer proposition, its broad selection of wines, and the exclusive agreements it’s signed with many a winemaker. This guarantees repeat business from a customer than loves a particular bottle.

Though do remember that the retailer still faces considerable threat from supermarkets and other specialised players like Majestic Wine.

Hotel Chocolat

High street and online retailer Hotel Chocolat (LSE: HOTC) should be releasing its delayed set of full-year results on 5 October. Normally, a postponement would be taken negatively by shareholders but HOTC’s share price has held up well. In fact, it’s up almost 9% over the last month.

This isn’t completely irrational. Back in July, HOTC said revenue in its last financial year hit £165m. That’s 24% higher than in FY19 — the year before Covid-19 struck. So trading’s clearly far from terrible. 

On the flip side, I’m conscious that only a relatively small percentage of stock is actively traded (CEO Angus Thirlwell still owns over 25% of the company). Such a small free float does mean it’s share price is theoretically more susceptible to violent moves, both up and down.

This matters considering the valuation. A P/E of 42 looks very expensive and HOTC simply can’t afford to rest on its laurels if recent momentum is to continue. Should it disappoint in any way (perhaps in relation to rising costs), I might actually get the entry price I’ve been looking for. 

Tristel

Another steeply-valued small-cap UK growth stock reporting next month is contamination control product manufacturer Tristel (LSE: TSTL). It reveals full-year figures on 18 October. 

Like Hotel Chocolat, Tristel is a stock I’ve long admired but never pulled the trigger on. It’s a high-quality, financially-sound company operating in a niche area. Let’s not forget that Covid-19 has cemented the need to do everything possible to reduce infection in healthcare settings. This should provide the company with a springboard for further sales growth. 

However, I just can’t get away from that valuation. A P/E of 60’s eye-watering, even if Tristel has hinted that a rise in (non-pandemic-related) hospital admissions towards the end of its financial year has increased demand for its disinfectant products.

Regardless of it doing everything right from here, a more general stock market wobble could really hammer the price as investors dash to cash. That makes for an unattractive risk/reward trade-off, in my view. As a result, Tristel remains stuck on my watchlist, for now.

Totally

Penny stock Totally (LSE: TLY) is a final small-cap UK growth stock I’ll be following next month. A Q3 trading update from the healthcare solutions provider is scheduled for 28 October.

Of the three discussed today, TLY shares have performed the best over the last year, almost doubling in value. Based purely on valuation, Totally also looks a lot more palatable than both HOTC and TSTL. Its shares currently command a forward P/E of 22. The balance sheet looks fairly solid and there’s an experienced management team at the helm.

Naturally, there are things to be wary of. The fact that Totally is only trading around the breakeven level right now is the key drawback for me. This is also a low-margin business. And while recent demand from the NHS has clearly been good, it’s worth questioning what happens when the Covid-19 storm finally passes. 

Another interesting UK growth stock then, but not one I’d feel comfortable buying before next month’s update.

But Caledonia Mining’s share price has jumped 7% to 965p on Tuesday, following the release of terrific production numbers. Gold output at the UK mining share announced record quarterly production of 16,710 ounces between April and June, it said. This was up around 24% from the same 2020 quarter.

Second-quarter production received a huge bump after Caledonia’s Central Shaft mine in Zimbabwe became fully operational in early April. It’s the country’s deepest gold mine and cost $67m over six years to come to fruition.

First half output up at Caledonia Mining

Those blowout quarterly numbers meant first-half production at Caledonia Mining rose a shade under 8% year-on-year to 29,907 ounces. The business affirmed its full-year target of between 61,000 and 67,000 gold ounces too. And it said it remains on track to produce 80,000 ounces a year from 2022.

In other news, Caledonia hiked its latest quarterly dividend to 13 cents from 12 cents, previously. Chief executive Steve Curtis said: “With the Central Shaft now in operation, the anticipated combination of rising production and declining capital investment gives us confidence to further increase the dividend payment in addition to providing funding for investment in new projects.”

Totally sinks following FY announcement

The Totally (LSE: TLY) share price hasn’t fared nearly as well as Caledonia Mining’s on Tuesday. The UK healthcare share is up 125% over the past 12 months. But it’s down 6% today at 40p following the release of full-year financials. I’d suggest this reflects the impact of healthy profit-taking following the company’s stratospheric rise during the Covid-19 crisis.

Totally — which provides a range of healthcare services across the UK and Ireland — said revenues rose 7.4% in the 12 months to March, to £113.7m. At its core Urgent Care division, sales improved 9.2% year-on-year to £105.4m, while turnover at Insourcing rose more than 200% to £3.1m. These increases offset a 37.6% decline at the company’s Planned Care unit. Sales here dropped to £5.2m.

Meanwhile, gross margins at group level improved to 18.3% from 18.1% in financial 2020. This all meant the AIM-listed business was able to swing back into profit. It recorded pre-tax earnings of £100,000 in fiscal 2021, versus the £3.4m loss it recorded a year earlier.

On top of this, Totally saw the amount of cash on its balance sheet improve to £14.8m last year from £8.9m, previously. It therefore kept the full-year dividend stable at 0.5p per share.

“The year was impacted throughout by the Covid-19 pandemic and as a trusted partner of the NHS the teams at Totally were part of the frontline resource providing care,” chairman Bob Holt commented.

He added that demand for the company’s services — which includes providing healthcare assistance on the NHS 111 service – increased “on an almost daily basis.”

Penny stocks: What’s on my radar

Perhaps the most important is the company’s financial position. A penny stock that’s already swimming in debt is one to avoid, unless it has significant assets to offset this. A struggling firm will usually need to tap its owners for more cash by offering shares on the cheap. By contrast, a company with net cash on its balance sheet should have the firepower to weather a few inevitable storms.

A second thing I look for is a reason (or reasons) why the shares might be ready to rise in value. As much as I invest for the long term, I don’t want to be in a stock that has little chance of growing revenue and profits. The opportunity cost of not investing elsewhere is simply too great. I therefore take a look at recent announcements to gauge whether it could be about to sprint ahead of the competition. 

Third, I look for evidence of volume. In other words, I need to see that the shares are changing hands (aka liquidity). Should this be the case, I can be more confident of being able to sell my holding when I want/need to. A lack of interest in certain penny stocks could make it difficult to shift them for the price I want.  

Another thing I look for is the number of shares owned by directors. If someone helping to manage the firm isn’t confident enough to invest their own money, why should I? Having a healthy slab of shares sends a message to would-be buyers that their interests are aligned with shareholders.

A final, more general point I consider when selecting penny stocks is to look across the entire market. Focusing on one sector, such as mining or biotech, is just too dangerous.  

An alternative strategy

An alternative to buying individual high-risk, high-reward penny stocks is to buy a fund specialising in this part of the market. Sure, not every holding will actually have shares trading for pennies rather than pounds, but this isn’t the point. The objective here is to diversify risk through buying a basket of stocks. The eventual return might not be as great but investing this way does allow me to sleep at night. 

Positively, there’s no shortage of active funds to select from. Like penny stocks however, the performance varies wildly. This is why it’s important to scrutinise the track records of those managing investors’ money. We’re talking evidence of consistent returns over five years or more here, not one or two months.

I currently have a number of such funds in my portfolio. These include the Liontrust UK Micro-Cap Fund and the Marlborough UK Micro-Cap Growth. Penny stocks in the former include Totally and Eckoh. The latter includes companies like Jubilee Metals.

Although there’s no guarantee that returns to date will continue, I’m content to keep my money invested here for the long term.

Edward Sheldon: Calnex Solutions

My top micro-cap stock is Calnex Solutions (LSE: CLX). It’s an under-the-radar technology company that specialises in testing and measurement services for telecommunication networks.

Calnex is benefitting from the rollout of 5G networks and the widespread adoption of cloud computing. The company’s H1 results for the six months to 30 September 2020, for example, showed revenue growth of 37%. Meanwhile, the company recently advised that its revenue for FY2021 would be ahead of market expectations. It also said that it is well positioned to deliver its historical growth rates over the long term.

Like any micro-cap, this stock could be volatile. However, overall, the investment case looks attractive, in my view.

Edward Sheldon owns shares in Calnex Solutions.

Christopher Ruane: Foxtons

Estate agent Foxtons (LSE: FOXT) offers exposure to any rebound in the London property market.

The pandemic had an impact and revenue fell 12% last year. However, the pre-tax loss was sharply reduced from the prior year despite the difficult market. The company moved back into profitability in the second half of last year and says financial performance has continued to improve. Revenue in January and February was well ahead of the prior two years.

Its well-known brand is an asset in the crowded London market. I would consider buying Foxtons at its current price.

Christopher Ruane does not own shares in Foxtons.

Jonathan Smith: McBride 

McBride (LSE: MCB) is a UK-based manufacturing firm that offers private label services as well as producing some own-label products. This is mostly in the household cleaning area. 

The share price is up over 40% over the past year, thanks to increased demand from lockdown for many lines. Fiscal half-year operating profit (H2 of 2020) was up 83.6%, which impressed me.

Going forward, I think the business is well diversified with operations in 12 countries. It also appeals to ESG investors, given that 99% of packaging produced is recyclable.

Jonathan Smith has no position in McBride.

Royston Wild: Michelmersh Brick Holdings 

Continued strength in the UK housebuilding industry leads me to believe that Michelmersh Brick Holdings (LSE: MBH) will release encouraging trading news later this month. The AIM-quoted company is due to unveil full year results on Tuesday, March 30. 

Michelmersh certainly impressed when it last updated the market in November. Then it said that production capacity had returned to pre-coronavirus levels and that trading had remained “resilient” since June. Consequently it said that underlying revenue and profit would beat market estimates for 2020.

Today Michelmersh trades on a price-to-earnings growth (PEG) ratio of just 0.9 for 2021. This suggests that the company is being undervalued by market makers. And it’s a reading so low that I think another positive update in the coming days could prompt a sharp re-rating of the brickmaker’s shares.

Royston Wild does not own shares in Michelmersh Brick Holdings.

Conor Coyle: MacFarlane Group 

MacFarlane Group (LSE:MACF) is a micro-cap stock I think could be set for significant long-term growth. The company designs, manufactures and delivers packaging to businesses throughout the UK. Demand for packaging products has shot up as the number of online deliveries has increased due to the pandemic.

The Glasgow-based company is a well-established business and has continued to post strong profits despite economic uncertainty in the last year. I think its online retail profits will continue to grow, and with key customers in the aerospace industry bouncing back this year I see further growth ahead.

Conor Coyle does not own shares in MacFarlane Group.

Roland Head: UP Global Sourcing

One small-cap stock whose prospects excite me is UP Global Sourcing (LSE: UPGS).

This firm owns and licences a range of consumer goods brands, such as Russell Hobbs, Salter, Beldray and Constellation. Demand for kitchen, laundry and cleaning products has been strong during lockdown, with sales up 11% during the six months to 31 January.

There’s obviously a risk that demand could slow as the UK exits lockdown. But the firm recently upgraded its sales guidance for the year ahead, reporting “strong momentum” in new orders.

UPGS shares are up by 50% from their pre-pandemic levels. I believe they have further to go.

Roland Head owns shares of UP Global Sourcing.

Tom Rodgers: Alumasc

Sustainable building materials producer Alumasc (LSE:ALU) is one of my favourite kinds of stocks. The kind that no-one’s heard of until suddenly everyone’s heard of it.

Established in 1945, the AIM-listed firm’s shares are trading at a three-year high, and it will pay a hefty 5.4% dividend yield next year. It boasts a forward P/E ratio of just 7.8 and a forward PEG of 0.4, making it seriously undervalued in my book. The fact that the company’s £61.7m market cap is well below its annual £80.4m revenue does it no harm at all, either.

Tom Rodgers has no position in Alumasc.

Jabran Khan: Yourgene Health

Yourgene Health (LSE:YGEN) is a genetic testing firm that produces non-invasive products for male fertility and prenatal screening for cystic fibrosis and more. Yourgene joined the Covid-19 products market with a testing solution.

It has established a presence in the UK, Europe, the Middle East, Africa and Asia. YourGene relies on commercial partnerships with larger firms, which I see as a positive.

Trading in the past year has shown progression for the £117m market-cap business. FY results are due soon and are expected to be positive. At just 16p per share, Yourgene could be a micro-cap gem for the long term in my portfolio. 

Jabran Khan has no position in any of the shares mentioned.

Rupert Hargreaves: Belvoir Group

Property franchise group Belvoir (LSE: BLV) offers a range of services from lettings to sales and financial services.

Growth since 2014 has been outstanding. Net income has grown at a compound annual rate of 28%. And Belvoir is expecting to report revenue growth of 12% for 2020.

Despite its historical growth, Belvoir has its risks. If the UK property market should start to struggle, the firm’s income may begin to shrink. Still, I would buy this micro-cap stock considering its potential to grab market share over the next few years.

Rupert Hargreaves does not own shares in Belvoir.

G A Chester: Trans-Siberian Gold 

Trans-Siberian Gold (LSE: TSG) is a low-cost, high-grade producer from its Asacha mine in Far East Russia. It also has exploration and development assets in the region. 

Its strong balance sheet and cash generation enable it to invest for growth, and reward shareholders with dividends and share buybacks. It aims to pay a sustainable base dividend through the commodities cycle, and – as currently – higher payouts when cash flows permit. The running yield is near 8% right now. 

Operational risk is currently concentrated due to TSG’s single producing mine, but it does have ambitions to become a mid-tier, multi-asset gold producer. 

G A Chester has no position in Trans-Siberian Gold.

Andy Ross: Totally 

Shares in healthcare services provider Totally (LSE: TLY) have more or less trebled over the last 12 months. In my opinion, it’s a strong micro-cap business with long-term potential and room for more share price growth.  

I believe that the shares should continue to do well because the group has launched an insourcing business, has a strong relationship with the NHS and has made selective acquisitions that will boost earnings growth. It’s addressing a huge potential market across the UK & Ireland, and in time potentially further afield.  

The group is likely to become profitable shortly, has been growing revenues rapidly year-on-year and already pays a dividend, which is a bonus.  

Andy Ross does not own shares in Totally.

Nadia Yaqub: Scancell

I reckon things look promising for Scancell (LSE: SCLP). It’s an immuno-oncology company. That’s a fancy way of saying it develops treatments that stimulate the body’s own immune system to treat or prevent cancer. Some of Scancell’s products are being tested in clinical trials.

But I reckon the real gem is its second generation Covid-19 vaccine. According to Scancell, its version of the jab could develop long-term immunity to the virus and offer better protection against the variants. It’s still early days, but I think Scancell has bags of potential.

Nadia Yaqub does not own shares in Scancell.

Kevin Godbold: Ramsdens Holdings

Ramsdens Holdings (LSE: RFX) operates from around 157 stores in the UK, offering pawnbroking, financial, retail and foreign currency exchange services. It’s a decent business and the firm sports some impressive quality indicators. City analysts expect earnings to bounce-back by almost 60% in the trading year to September 2022.

With the share price near 172p, the forward-looking earnings multiple is just above 11. And the anticipated dividend yield is around 3.5%. I like the net cash position on the balance sheets and the positive outlook for growth in earnings. That’s why I’d buy this micro-cap stock to hold for March and beyond.

Kevin Godbold does not own shares in Ramsdens Holdings.

Kirsteen Mackay: Trans-Siberian Gold

My top micro-cap stock for March is Trans-Siberian Gold (LSE:TSG). I think gold stocks can help achieve a diversified portfolio. With low interest rates likely to stay low for some time, this provides a favourable environment for gold. And hints of inflation on the rise make me think gold remains a good hedge.

Trans-Siberian Gold operates in Russia and recently reported a significant upgrade to the resources at its flagship gold mine following a successful drilling campaign. Its market cap is £81m and it has a price-to-earnings ratio of 14. The company pays a 7% dividend yield. 

Kirsteen Mackay does not own shares in Trans-Siberian Gold.

Zaven Boyrazian: Tracsis

The UK government recently unveiled its roadmap to ease lockdown restrictions within the UK. As more people head back to the office or go on a long-overdue holiday, the demand for Tracsis’ (LSE:TRCS) services is rising.

Tracsis engages in traffic data analysis, along with railway fault detection systems. Using its software solutions, optimised routes for vehicles can be plotted within pedestrian-rich areas.

The business is far from risk-free. Covid-19 led to a significant rise in operational expenses, and there are numerous competitors to outperform.

But despite these threats, I think the stock is on track to continue delivering long-term growth for my portfolio.

Zaven Boyrazian does not own shares in Tracsis.

Manika Premsingh: McBride

The private label household and personal-care goods’ manufacturer McBride (LSE: MCB) has made share price gains since late 2020. However, its price is still way below its pre-pandemic levels.

I could see it staying there if McBride was Covid-19 hit. But the opposite is the case here.

It has actually seen a rise in revenues for the six months ending December 31, 2020 as the pandemic drove up cleaning products’ demand. It is also profitable and expected its full-year pre-tax profits to be 10% ahead of the consensus estimate at the time it made the statement.

McBride’s profits have fluctuated in past years and its debt is growing. But on balance, I am optimistic about its prospects, making it my top micro-cap stock for the near term.

Manika Premsingh has no position in McBride.

Paul Summers: Ramsdens Holdings

My top micro-cap pick for March is Ramsdens Holdings (LSE: RFX).

Investing in a pawnbroker may not be everyone’s cup of tea but Ramsdens is also a jewellery retailer, precious metals buyer/seller and foreign currency specialist. Although there can be no guarantees, the last of these might recover strongly once UK holidaymakers are allowed to travel again. In addition to this earnings diversity, the company’s finances look strong and it makes great returns on invested capital. 

Shares remain far below the highs hit in early 2020. With lockdown restrictions set to end, I think we might see this gap close over the rest of the year. 

Paul Summers owns shares in Ramsdens Holdings.

Sizeable acquisition 

At time of writing shares in Totally (LSE: TLY) are down by 10% on the day after the company announced that it had agreed to acquire Premier Physical Healthcare Ltd for up to £6.8m. Only £372,000 of the deal total is to be paid upfront, the rest will be paid through four potential deferred payments to 2019, dependent on performance targets. To fund the transaction Totally is the issuing 10m new shares to raise a total of £6.2m.