2 unloved penny stocks I’m considering buying today!

These penny stocks may have fallen out of favour with UK investors, but I think they could be too cheap to miss following share price falls.

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I’m searching for great penny stocks to buy following heavy share price weakness. Here are two I think are highly attractive at current prices.

Medical marvel

Created with Highcharts 11.4.3Polarean Imaging Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Medical technology business Polarean Imaging (LSE:POLX) has passed some significant milestones in recent months.

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Its landmark XENOVIEW product — which allows MRI scans to give a more complete picture of a patient’s lung health — was signed off by the US Food and Drug Administration (FDA) at the end of 2022. Then in May, the first clinical scan took place at an Ohio hospital using the technology. This followed the company’s maiden sale a month earlier.

So what’s gone wrong with the Polarean share price? As is often the case with penny stocks, it’s money.

The business had a healthy $16m of cash on its balance sheet at the end of last year. But in February, it announced that “the company will need additional cash resources to achieve the 24 month commercial targets and to pursue the development of the next indications and their approvals, and advanced R&D for future products.

A dip-buying opportunity

Chart showing forecast growth in the chronic obstructive pulmonary disease (COPD) treatment market Forecast (In US Dollars)
Predicted growth in the global chronic obstructive pulmonary disease (COPD) treatment market (in US dollars). Source: Precedence Research

Tapping shareholders for cash is one option the business is exploring to plug the funding gap. Yet given recent share price weakness, I’m still considering adding some Polarean shares to my portfolio.

City analysts expect Polarean’s sales to more than double from around $3m this year to $8m in 2024. This is possibly no surprise given the advantages its technologies provide for both medical personnel and patients.

The company’s technology not only provides clearer images, but they can be taken without the use of harmful radiation and don’t require invasive procedures. As the number of people suffering lung-related problems explodes, XENOVIEW has huge growth potential.

The number of people seeking treatment for chronic obstructive pulmonary disease (COPD) alone is tipped to soar over the next decade, as the graph above shows. Soaring cases of asthma, cancer and other conditions also mean demand for Polarean’s expertise could grow strongly.

A top dividend stock

Created with Highcharts 11.4.3Alternative Income REIT Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Making a second income from penny stocks can be a difficult task. Usually, any surplus cash these growth-oriented shares make is ploughed back into the business rather than paid out in dividends.

Property stock Alternative Income REIT (LSE:AIRE) is one small-cap share that could provide a passive income however. Under real estate investment rules its required to distribute at least 90% of annual rental profits out by way of dividends.

This is why the firm offers up a huge 8.2% forward dividend yield. That’s more than double a corresponding 3.8% reading for FTSE 100 shares.

Alternative Income invests in a diverse range of real estate assets. This means that, while it can still theoretically struggle to collect rents during downturns, the risk is much reduced. The firm’s portfolio includes hotels, gyms, logistics hubs and care homes.

Encouragingly, 96% of the rental income it receives is inflation linked. This makes it an especially attractive penny stock to own in this period of rampant price rises.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

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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 no position in any of the shares mentioned. 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.

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