Snapping up leisure shares like penny stock Revolution Bars Group (LSE: RBG) is still a risky business. The hospitality sector was famously battered in 2020 as the Covid-19 outbreak closed bars, pubs and restaurants en masse. UK share investors need to remember that the ongoing public health emergency could prompt more large-scale shutterings.
As a long-term investor, however, Revolution Bars is a share that’s still drawing my attention. The business operates dozens of premium bars across the country. It’s therefore well placed to exploit the trend of consumers spending ever-higher proportions of their income on going out. Leisure spending in Britain has been growing at twice the rate of retail in recent times.
Most recent trading data from Revolution Bars has illustrated the robustness of this trend too. Between 19 July and 2 October the business saw sales jump 17% compared with the same period two years earlier.
A rare beauty
I also like Rainbow Rare Earths (LSE: RBW). Demand for rare earth metals has rocketed over the past decade as the manufacture of mobile phones, computers and other consumer electronics has boomed. Elements like neodymium and praseodymium (commonly known as NdPr) are essential components in making such hi-tech devices run. Some analysts think that demand growth will move up several notches too as the green technology revolution kicks off.
Take the boffins at investment firm CITIC, for example. They’re predicting that “downstream demand for rare earths is expected to continue to improve” as sales of low-emission cars, wind turbines and special energy-saving air conditioners rise. At the same time CITIC thinks supply from China, the world’s largest supplier of rare earths, will fall as local lawmakers clamp down on unregulated production.
All this bodes well for NdPr prices for the first part of the decade, and by extension profits at Rainbow Rare Earth. Through its Gakara project in Burundi the company is sitting on one of the richest rare earths resources on the planet. Mining is a notoriously difficult business and setbacks can deal a significant blow to profits. However, I think predictions of soaring demand still make this penny stock very attractive today.
A penny stock for 2022 and beyond?
I think Futura Medical could be on the cusp of delivering explosive revenues growth. In a potentially game-changing year, the business — which has high hopes for its MED3000 erectile dysfunction gel — has received the green light to begin trials in the US. And it now has the critical ‘CE’ marking in European markets, as well as having signed key licensing agreements spanning the globe.
Futura has a battle on its hands to take on Pfizer’s market giant Viagra. But the fast-acting nature of its product could still make it a winner in a rapidly-growing market. That’s providing trials of MED3000 yield positive results in 2022. It’s estimated that global impotence rates will have doubled between 1995 and 2025.
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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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