What are the best penny stocks for UK traders and investors to watch?

What is a penny stock?

A penny stock is a unit of common stock that trades with a low share price: below £1 in the UK and below $5 in the US. They’re also referred to as penny shares. The companies will also have a lower market cap: under £100 million in the UK and under $300 million in the US.

These stocks are regarded as a more speculative investment because they’re geared for growth, with many penny companies yet to generate noteworthy income.

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Best UK penny stocks to watch

These are not necessarily the best performing penny stocks, with several having seen their share prices decline over the past year. However, while their share prices may have fallen in recent months, this is not necessarily a reflection of their true value. This list shouldn’t be construed as financial advice.

And with interest rates remaining high, it is true that growth is becoming more expensive, increasing the risk of investing in many penny stocks. Those on this list could well see further falls.

Remember past performance is no indicator of future returns

Empyrean Energy

Empyrean Energy is an Australian based energy company listed on the London Stock Exchange (LSE). The company has projects in Australia, America and Indonesia. Its key interests include the Sacramento Basin in California, the offshore Duyung PSC in Indonesia and the Wilson River Prospect in Australia.

In 2024, the company delivered mixed results with delays in its Mako Gas Field project impacting its ability to meet obligations in China, although, it did manage to raise the money to support operations whilst waiting for progress.

In 2025, the company hopes to deliver a strong performance. Over the past month its share price has increased by 325% and our analysts have given it a strong buy position.

Technology Minerals

Technology Minerals is a is a UK-based metal mining company that’s focused on building a sustainable circular economy for battery metals by exploring raw minerals like cobalt, nickel and lithium. Its main projects are located in America and Spain, and the company also owns a 49% stake in a battery recycling business. 

In 2024, the company reported steady progress with its early stage mining projects delivering strong results and its successful sale of the Leinster project demonstrating its ability to through partnerships. Reclus, its recycling arm is growing and looking to expand both in the UK and abroad. This positions the company well for its next development phase and its share price has increased by 137% over the past month.

Premier African Minerals

Premier African Minerals is a natural resource development and mining company with projects across Africa in places such as Togo, Zimbabwe, Mozambique and Benin. The company predominantly works to extract lithium, wolframite and tantalite, but also works with other minerals. 

In 2024, the company had a mixed performance. Despite facing delays on some projects, it successfully attracted new interest in Zulu’s spodumene. 

In the past month, its share price has increased by 123% and our analysts anticipate a further increase of 33% in the next year, although this can’t be guaranteed.

GS Chain

GS Chain is a UK-based financial services company that’s responsible for acquiring businesses in the technology sector with a view to supporting both long and short-term growth strategies. 

The company reported a steady performance for the year ended 2024 where it reduced its losses from £6.8k to £3.6k. This, alongside the continued financial backing from directors and decreased operating expenses has helped increase its liquidity position from the year before. 

Over the past month its share price has increased by 100% and our analysts have given the stock a buy position.

Oxford BioDynamics

Oxford BioDynamics is a biotechnology company based in the UK that helps support personal healthcare by selling and developing diagnostic tests. Its products range includes tests for prostate cancer, sample collection kits and blood tests which predict patient responses to immunotherapy. 

Strong demand for its clinical tests enabled its revenues to increase by 57% in H1. Despite this, cash remains tight, and the company remains reliant on fundraising and shareholder support. 

The company has recently partnered with Google Cloud to make its EpiSwitch platform easier to use. This partnership will help provide insights more quickly by allowing it to use AI to analyse 3D geometric data. 

Over the past month its share price has increased by 92% and our analysts have given the stock a buy position.

TechFinancials

TechFinancials is a company based in Cyprus that until recently, worked to develop blockchain solutions and licensed trading platforms. It’s now shut down all of its subsidiaries and operations and is now exclusively focusing on finding new investment opportunities. 

The company has recently announced an acquisition agreement with Gathoni Muchai Investment company where it could gain a 60% interest in the Dilotiko high-grade iron ore project in Kenya. This agreement has injected optimism into investors, and the company has seen its share price increase by 75.7% over the past month.

GEO Exploration

GEO Exploration is an Australia-based company listed on the LSE that explores for gas and oil. Its main operations include an 80% stake in the Juno project in Western Australia and a 78% stake in an offshore project in Namibia’s Walvis Basin. 

In the six months ended December 2024, the company came under new leadership and changed its name from Global Petroleum Limited. During this time, the company acquired a stake in the Juno project where early work shows signs of gold deposits. 

Over the past month, its share price has increased by 64.3% and our analysts have given the stock a strong buy position.

African Pioneer

African Pioneer is an exploration and minerals company based on the Isle of Man that’s focused on zinc, lead, nickel, copper and gold projects. The company owns a range of projects and licenses across well-known mineral belts in Africa giving it exposure to some of Africa’s most promising exploration areas. 

In 2024, the company made progress with its copper projects with the Ongombo project in Namibia showing strong potential. Although it had some funding challenges, African Pioneer remains optimistic and believes that increased copper demand and limited supply with create strong opportunities in the year ahead. 

Over the past month its share price has increased by almost 52% and our analysts have given the stock a strong buy position.

Alien Metals

Exploration and development company Alien Metals works to advance its portfolio of mineral projects with its core asset being the Hancock DSO iron ore project in Australia, of which the company has 90% ownership through its subsidiary the Iron Ore Company of Australia (IOCA). The IOCA also has a stake in the Brockman and Vivash Gorge.

In FY25 the company moved its projects forward with new surveys and preparation work across silver, nickel, iron ore and copper. The Hancock Iron Ore Project made particularly strong progress with and is now close to production with resources confirmed and a mining lease granted. 

Going forward, Alien Metals is looking to develop its Pinderi Hills and Hancock projects whilst developing an effective funding strategy. The company continues to look for new opportunities to expand and is implementing a new exploration plan at Pinderi Hills to find more valuable minerals.

Rockfire Resources

Rockfire Resources is a UK based minerals exploration company with projects in Australia and Greece. Its main projects include the Molaoi deposit in Greece as well as several projects in Queensland Australia.

In 2024 the company made significant progress in its exploration activities with the Molaoi project being particularly successful. Although higher administrative costs have contributed to a net loss of £2.29 million, the company remains optimistic aboutt he success of its exploration projects in 2025 as long as it’s able to secure the necessary funding.  

How to trade or invest in penny stocks

1. Learn more about penny stocks
2. Choose whether you want to trade or invest
3. Open an account
4. Search for penny stocks on our web platform or app
5. Make your trade or investment
6. Monitor your position

Investing in a stock involves buying it outright and holding it for a long period of time with the view it’ll increase in value.

Trading takes a shorter term approach and uses leverage. This means that market movements are magnified and you can take a position much larger than your initial deposit.

For instance, using 5:1 leverage allows you to control a £5000 position with a £1000 initial margin. If the market shifts by 10% it could result in a 50% profit or loss on your deposited margin.

Whilst negative balance protection means you can’t lose more than you initially put in, market movements can be fast and unpredictable meaning you could still lose your full deposit.

Risks and rewards of penny stocks

• The share prices of penny stocks can be volatile, either as a result of lower liquidity or because they are sensitive to news and market developments
• Penny stocks can turn into a huge success or an utter failure overnight: winning or losing one contract or the level of success of a new product, for example, can decide their future
• Many penny stocks have no track record and it is not uncommon for them to have no assets, operations or revenue
• Products and service offerings are often still in development and yet to be tested in the actual market
• News coverage and analysis of penny stocks is harder to come by compared to gaining insight into larger, more popular stocks
• Penny stock companies are more likely to raise equity from investors on an ongoing basis, as it gives the business a way of securing vital funds for growth if traditional lenders refuse to provide it

Since then, inflation has risen and now stands at 3.5%, its highest rate in over a year as increased energy costs, water bills and council tax have come into play.

At its most recent meeting on 8 May, the BoE cut interest rates by 0.25 to 4.25%. This decision was largely influenced by the expected impact of US tariffs. But with inflation on the rise, it’s likely that further cuts will be more gradual. 

This decision is influenced by the expected impact of US tariffs, which the Bank anticipate will have a deflationary impact on the UK economy, as its decision not to introduce reciprocal tariffs could result in cheaper goods from Asian and European companies as they look to increase sales to the UK and reduce sales to the US. Although further cuts are expected later this year, with inflation faster than expected these cuts are likely to be more gradual.

Footnotes

¹ As at 5 October 2022
² Trade in your share dealing account three or more times in the previous month to qualify for our best commission rates. Please note published rates are valid up to £25,000 notional value. See our full list of share dealing charges and fees.
³ Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.