I’m hunting for the best cheap UK stocks to buy in November. Here are two top penny stocks I think could be brilliant buys for the near term and beyond.
The property powerhouse
Large parts of the retail sector are under the cosh as internet shopping explodes. But while the high street is feeling the strain, the outlook for retail parks remains quite solid. This makes Ediston Property Investment Company (LSE: EPIC) arguably one of the best property stocks to buy right now.
The boom in ‘click and collect’ means Ediston could be an indirect winner from the e-commerce surge. Retail units with more space and with better accessibility by car are likely to be in increasing demand as companies try to latch onto this theme.
Additionally, it’s thought that retail park stores are more popular with shoppers than crowded shopping centres and high streets following the Covid-19 outbreak, and that they’ll continue to be preferred.
I also like the fact that rents at retail parks tend to be much lower than other retail locations. This is especially important at a time when retailers’ margins are being crushed by business rates and rising labour and input costs. It provides another reason to expect demand for Ediston’s properties to pick up considerably.
Rent rolls and, consequently, earnings at Ediston could take a smack in the immediate future however. Rising Covid-19 cases in the UK mean that restrictions on non-essential retail could be reimposed. Furthermore, falling consumer spending power in the wake of soaring inflation could also indirectly hit the penny stock’s profits.
That said, as a long-term investor the threat of such temporary turbulence doesn’t put me off. I’d happily buy this cheap UK share now or in the near future.
Another penny stock on my radar
I also believe Topps Tiles (LSE: TPT) is a highly attractive, cheap UK share to buy. That’s even though its operations are highly cyclical and so it could suffer considerably if the British economy skids lower.
First of all, I’m encouraged that the robust housebuilding sector should keep sales at the retailer rising solidly. Latest Office for National Statistics data showed average property prices soar 10.6% year-on-year in August. This was up from the 8.5% increase the prior month.
All this illustrates the massive homes shortage on these shores that I believe will persist for years to come. In this climate major housebuilders should continue busily building and demanding Topps Tiles’ product in massive quantities.
I’m also expecting sales there to remain strong as the country’s DIY craze continues following recent Covid-19 lockdowns. The retailer’s huge investment in its e-commerce channel should help it to win customers in the years ahead too.
Like Ediston Property, this is a top penny stock I’d buy in November and hold for years.
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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