I think Atlantic Lithium (LSE: ALL) could be a top penny stock to capitalise on the green revolution. More specifically, I believe profits here could soar as a global shortage of lithium persists and prices rise.
In 2022, for example, S&P Market Intelligence believes lithium demand will rise to 641,000 tonnes versus supply of 636,000 tonnes. The pace at which electric vehicle sales — and by extension demand for the critical battery material — are increasing means that the lithium market could remain in deficit well beyond this year.
Things are looking good for Atlantic Lithium, then, a company that operates the Ewoyya lithium project in Ghana. Drilling results from the asset have remained highly promising, a theme that has helped the penny stock gain 75% in value over the past year. Though remember that any setbacks in developing Ewoyya could send Atlantic’s share price down.
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Another penny stock on my watchlist
I think auto parts builder Surface Transforms (LSE: SCE) could also help me make big returns this decade. The engineer isn’t a specialist in the field of electric vehicles, though. Instead it manufactures ceramic brakes that help high-performance vehicles stay glued to the road. It’s therefore well placed to capitalise on rising sports car demand.
Latest financials from Aston Martin underline how strongly sales of such vehicles are rising as the number of high-wealth individuals around the globe increases. The luxury carmaker said that it boasts “a healthy orderbook for all core vehicles” and that it plans to sell 6,600 vehicles via its wholesale channels in 2022, up 7% from last year’s levels.
Surface Transforms has experienced some production troubles of late due to issues at one of its newly-commissioned furnaces. Such problems are a constant threat to engineers like this that can hit revenues hard. However, I think the firm’s manufacturing expansion programme could in the long term help to supercharge profits as sports car sales grow.
The film star
You might not have heard of penny stock Facilities by ADF (LSE: ADF) before. This low-cost share only began trading on the London Stock Exchange in January. But it plays a crucial role in bringing our favourite films and TV shows to the screen. Put simply, it rents out specialist vehicles and trailers that are critical in the production process.
We’re talking about mobile make-up rooms, costume trailers and production vans, that sort of thing. And today the business is thriving thanks to “continued robust demand for film and high-end television” in the UK. In fact it advised in February that profits would beat expectations in 2021 thanks to a strong end to the year. Equipment failure is an ever-present risk that could damage future sales, but as things stand, business is going swimmingly.
And I think it could prove a highly lucrative pick for the long term as investment in British TV and film production heats up. Amazon, for example, has just signed a multi-year contract to make programming for its Prime streaming service at Surrey’s Shepperton studios in the latest example of this trend.
