Confidence on global share markets remains on a knife-edge. As I type, major indices are edging away from the recent troughs struck as news of the Omicron virus variant emerged.
But I wouldn’t be shocked if stock markets crash again before Christmas. The biggest blue-chip to the smallest penny stock are all in jeopardy of another slump.
It’s not just fear that the Covid-19 crisis could significantly worsen very quickly, decimating the economic recovery in the process. The threat of persistently-high inflation continues to linger in the back of investors’ minds. Signs that Chinese property giant Evergrande is creeping closer to default adds another major problem for investors to chew over.
3 penny stocks I’m considering buying
I don’t plan to stop buying UK shares despite these risks. There are plenty of British stocks that could still provide excellent shareholder rewards. Here are three top penny stocks I’m thinking of buying, despite the threat of another stock market crash.
#1: Sylvania Platinum
I think Sylvania Platinum’s a great way for me to hedge my bets. Investment demand for the platinum group metals (PGMs) it produces will likely balloon if the global economy struggles and interest in safe-haven assets rises.
But on the other side of the coin, prices of platinum et al could swell if the economic recovery continues and autobuilders continue to buy the metal. PGMs are used in huge quantities to clean up emissions in car exhaust systems.
My main concern with Sylvania Platinum is the ever-present danger of production problems that can hit revenues and supercharge costs.
#2: ContourGlobal
CountourGlobal is in the business and building and operating power stations all over the globe. The essential nature of its services means, therefore, that profits remain broadly stable at all points of the economic cycle. I wouldn’t just buy this penny stock for its excellent defensive qualities though. I think its increased focus on renewable energy could pay off handsomely as demand for low-carbon electricity soars.
I’d buy ContourGlobal shares despite the complex nature of its operations. Any delays to the power plants it constructs could take a big bite out of the bottom line.
#3: Futura Medical
I’d also expect Futura Medical to stand up well during a broader stock market crash. Why? This healthcare stock has created a gel (the snappily-titled MED3000) that helps solve the problem of erectile dysfunction.
In a busy 2021, the gel received the all-important CE mark in Europe. It is now being considered by regulators in the US too. Positive news on this front would naturally light a fire under Futura Medical’s share price.
But Future Medical does face huge competition from industry giant brands like Viagra. Still, MED3000 has shown qualities that could help it fight back the competition. These include a fast-acting formula and a lack of drug interaction with prescription products.
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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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