3 ‘nearly’ penny stocks to buy in 2022

I’m searching for ultra-cheap UK shares to buy for 2022. These three almost-penny stocks all cost less that 150p. Here’s why I’d snap them up today.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Solar panels fields on the green hills

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’m searching for the best cheap UK shares to buy in 2022. Here are three ‘nearly’ penny stocks I think could be top buys for the new year. Each costs less that 150p apiece.

A favourite foodie

Bakkavor Group’s (LSE: BAKK) a UK share that’s not for the fainthearted. The business is a giant in the food-to-go sector and, as a consequence, its revenues have been hammered by Covid-19 lockdowns. Similar restrictions have been avoided more recently but the threat of new ones remain as the pandemic rolls on.

I think this danger might be baked into Bakkavor’s share price though. At 133p, the foodie trades on a forward price-to-earnings growth (PEG) ratio of 0.8, below the benchmark of 1 that suggests a stock is undervalued.

Should you invest £1,000 in Bakkavor right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bakkavor made the list?

See the 6 stocks

I’d buy Bakkavor as City analysts think the food-to-go segment is set for explosive growth. Lumina Intelligence, for one, reckons the industry will be worth £22.6bn by 2024, up from £15.3bn today. One final reason why I’d load up on Bakkavor shares is that, at current prices, it sports a monster 5.4% dividend yield for 2022.

A top renewable energy stock

I believe buying renewable energy stocks could be a good idea for me as demand for ‘clean’ energy soars. This is where Foresight Solar Fund Limited comes in, a near-penny stock which holds stakes in solar farms in the UK, Spain and Australia. I also like this particular operator because it made its maiden foray into the potentially-explosive battery storage market earlier in 2021.

The unpredictable nature of solar power generation means that energy storage is critical. And with this type of renewable energy becoming increasingly popular, the market for batteries is tipped to grow rapidly. I’d buy Foresight even though operating solar farms is expensive and unexpected costs can hit profits hard. The stock trades at 101p today.

Another ‘nearly’ penny stock I’d buy

I’d also buy Scottish housebuilder Springfield Properties (LSE: SPR) because of a solid outlook for the UK’s homes market. Stamp Duty reductions earlier in 2021 helped inflate property prices, but the recent withdrawal is expected to reduce the rate of growth in 2022. But next year, estate agency Savills still expects average home values to rise by a healthy 3-5%.

Happily for Springfield Properties, it seems like (at least in my opinion) home prices should keep climbing too. Low interest rates and Help to Buy support for first-time buyers means demand should keep outstripping housing supply. I’d buy this cheap UK share even though inflated building product costs look set to remain in place next year.

Analysts at ING Bank recently said it won’t be until “at least until the summer of 2022” before prices of some construction materials, such as concrete, bricks and cement, will drop.

Besides, I think a forward PEG ratio — allied with a 4.4% dividend yield — for the financial year to May 2022 is too good to pass up on. Today, Springfield Properties trades at 147p per share.

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Bakkavor right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Bakkavor made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Foresight Solar Fund Limited. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

How much would a 45-year-old need to invest in an ISA to earn a £1k monthly passive income at 65?

Harvey Jones looks at how much an investor would need to put away every month to build a steady passive…

Read more »

Investing Articles

3 things to do ahead of the new 2025-26 ISA year

It's time for us all to put on our investing boots and get to work on developing our plans for…

Read more »

Older couple walking in park
Investing Articles

Is £150,000 enough to generate £1,000 a month in passive income?

Stephen Wright takes a look at three UK stocks with dividend yields above 8% that passive income investors might be…

Read more »

Investing Articles

Aim to earn a £50k second income in retirement by investing just this much each month

Even with a small monthly investment, it’s possible to earn a £50k second income with a successful investment strategy and…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

Down 22% in a month! Is this my chance to buy shares in this FTSE 100 outperformer?

Shares in InterContinental Hotels Group have outperformed the FTSE 100 over the long term. So is a chance to buy…

Read more »

Investing Articles

How much would Tesla stock be worth if it was valued like Nvidia?

The market seems to view Tesla as a tech stock rather than a car manufacturer. What could this mean for…

Read more »

Investing Articles

This ex-penny stock skyrocketed 900% in 2020! Is it about to surge again?

This subdued hydrogen penny stock was hot in 2020, but with demand for green hydrogen rising in Europe, can the…

Read more »

Investing Articles

Looking for cheap shares to buy in March? Here are 3 to consider

Zaven Boyrazian shares three cheap-looking stocks he’s considering buying as long-term investment opportunities while the valuations remain cheap.

Read more »