These UK penny stocks have all caught my attention recently. Should I buy them to hold for the next decade?
A long shot?
The use of cannabis, whether for medical or recreational purposes, remains a taboo subject for many. Laws on the issue have been relaxed and especially so in North America, leading to speculation that pot could become an industry worth hundreds of billions of dollars very soon.
That means Kanabo Group (LSE: KNB) could well prove to be a hit should the cannabis market grow as projected. This business manufactures cannabidiol (CBD) oil products and a medical grade vaporiser it’s called the VapePod. This VapePod technology could pave the way for soaring sales.
Yet regulations remain strict in many other parts of the world and could remain so. This means that the penny stock could fail to ignite like its shareholders believe it will. Unfortunately regulatory problems aren’t the only thing it needs to worry about. It also faces tremendous competition, and particularly from gigantic US operators that have far more financial clout to make and market their products.
But for the time being I’m happier to keep my cash in my pocket.
Hydrogen powered
AFC Energy (LSE: AFC) could also be considered a highly-speculative stock today. Not only is it a small player in the field of hydrogen energy. The wider adoption of its power cells might be challenged by other forms of low-carbon technologies. I haven’t forgotten that hydrogen power remains untested at a commercial level.
That said, there are several reasons why I’m considering buying AFC Energy today. Its fuel cells produce ‘green’ hydrogen that’s far more environmentally-friendly than other systems that use natural gas. It’s one of the reasons why construction equipment giant JCB plans to start selling green-hydrogen-powered machines by the end of next year.
I’m also encouraged by the eye-catching performance of AFC Energy’s systems in the Extreme E motor racing series. I believe its successes on this high-profile stage could help adoption of this next-generation energy source still further. AFC Energy is clearly high-risk. But as a long-term investor I think the business could make me some serious cash.
Another top penny stock I’m looking at
I think getting exposure to renewable energy stocks could prove another good idea as the climate change battle intensifies. This is why Greencoat Renewables is on my watchlist. This cheap UK share operates more than a dozen wind farms in Ireland, and it’s steadily building its presence on mainland Europe too. In September for example it made its maiden foray into Scandinavia.
The main worry I have with Greencoat is the unpredictable nature of making energy from wind turbines. FTSE 100 renewable energy share SSE gained headlines in late September when it said the driest, calmest weather conditions for 70 years hit its own profits in the first half. Still, as a major player in a fast-growing industry I still think shares like Greencoat have a lot to offer investors like me.
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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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