Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Best performing UK penny stocks for traders and investors

We explain what you need to know about penny stocks and outline the top 10 penny stocks to watch in 2021 based on their performance over the year so far.1 We’ll also show you how to take a position on UK penny stocks.

What is a penny stock?

Penny stocks or penny shares are common stock that trade with a share price below £1 in the UK and below $5 in the US. The companies will also have a market cap below £100 million in the UK, and below $300 million in the US. As they are small, low-valued businesses, they offer higher risk and reward to traders.

Penny stocks are regarded as a more speculative investment than larger businesses because they are geared for growth, with many yet to generate any income or develop a viable product or service. In the UK, penny stocks are listed on the FTSE Alternative investment market (AIM) index.

Ready to buy or trade UK penny stocks? Open an account to get started, or practise trading with a demo account.

Best UK penny stocks to watch in 2021

The below list includes 10 penny stocks to watch in 2021 and is based on their year-to-date share price increase at the time of writing.

FTSE sector Share price movement: year-to-date (YTD)* Share price** FTSE AIM All-share listed?
Quantum Blockchain Technologies Investment banking and brokerage services 470% 1.43p yes
Itaconix General industrials 415.55% 14.85p yes
PetroNeft
Resources
Oil, gas and coal 332.84% 2.90p yes
Comptoir
Goup
Travel and leisure Travel and leisure 316.67% 10.00p yes
Zephyr Energy Industrial metals and mining 276.66% 3.55p yes
Mobilityone Industrial support services 234.22% 31.50p No,
but listed on
LSE AIM
ADVFN Finance and credit services 220.50% 62.00p yes
Premier African Minerals Industrial metals and mining 203.85% 0.16p yes
Oilex Oil, gas and coal 200.70% 0.22p yes
Ebiquity Media 189.00% 56.50p yes

*2 January 2021 – market opening 1 June 2021
**At market opening 1 June 2021

You can trade all of these UK penny stocks with us. To get started, open an account and search for the stock on our world-class platform.

Quantum Blockchain Technologies

Formerly Clear Leisure PLC, the company officially became Quantum Blockchain Technologies on 7 May 2021. Whereas Clear Leisure operated within the tourism sector, the name change followed a majority shareholder-approved decision to refocus the company exclusively on strategic areas of technological development.

Preceding the adoption of the new name and the narrower concentration of investment, the company raised £1 million in February 2021 from issuing 100 million shares – at 1p each – to an individual investor.

Reports indicate that the funds were earmarked as financing for its cryptocurrency ambitions, including entering into cloud mining contracts with existing operators and setting up a new bitcoin mining facility in Italy.

In the longer term, Chief executive officier (CEO) Francesco Gardin has noted that Quantum Blockchain Technologies will be investing heavily in research into blockchain, artificial intelligence, cryptocurrencies and quantum computing.

According to its website, the company will look to make direct investments in target businesses within the technology sector. It may also act as an investment manager for selected venture capital funds with interests in tech-based projects.

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Itaconix

Itaconix designs and produces bio-based polymers for use as key ingredients in a host of home and industrial applications. For example, at the time of writing, the company’s products are found in range of consumer items, including laundry detergents, dishwasher pods, odour management and hair styling products.

Originally, the AIM-listed firm was known as Revolymer PLC, but changed its name in early 2017 after acquiring Itaconix Corporation in June 2016. The US-based Itaconix Corporation initially developed the core polymer technology central to Itaconix’s current offerings. The company’s products are derived from itaconic acid – itself taken from starch – allowing for Itaconix to carve a sustainability niche in the chemical manufacture industry.

In 2020, it generated 96% of its revenues from the sale of plant-based products – an accomplishment that resulted in the company being awarded the London Stock Exchange’s Green Economy Mark in recognition for its contributions to the global green economy.

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PetroNeft Resources

PetroNeft Resources PLC is an international oil and gas exploration and production company, registered in Dublin but operating in the Russian Tomsk Oblast region. The company’s shares have been listed on the London AIM and Dublin ESM Markets since 2006.
PetroNeft owns and operates two oil and gas licences, both of which are in the Western Siberian Oil and Gas Basin. The first, ‘Licence 61’, permits it to explore and develop oil and gas in an area of 4991 km2; the second, ‘Licence 67’, allows it to exploit an area of 2447 km2.

Both areas contain known oil fields and several prospects and leads. The company has a 90% stake in Licence 67, and a 50% stake in Licence 61 – the other 50% being held by Oil India Limited.
In April 2021, PetroNeft converted almost $2.9 million of debt into equity and issued close on 126 million new shares.

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You can trade all of these UK penny stocks with IG. Simply open an account and search for the stock on our world-class platform.

Comptoir Group

Based in the UK, the Comptoir Group operates well-known restaurants offering menus based on Lebanese and Middle Eastern cuisine. In the Greater London and Manchester area, it owns or operates around 15 Lebanese and Eastern Mediterranean eateries.

The group’s primary restaurant brand is Comptoir Libanais – which also provides customers with menus focused on Lebanese and Eastern Mediterranean dishes. In addition to running 11 Comptoir Libanais restaurants, the group is engaged in franchising opportunities and owns the Shawa brand.

Comptoir took significant steps in 2020 to survive the dire impact of lockdowns, including the cutting of directors’ salaries and the suspension of all non-essential expenditures. Comptoir Group PLC was admitted to the AIM market on 21 June 2016.

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Zephyr Energy

Zephyr Energy is an oil and natural gas investment platform operating in the Rocky Mountain region of the United States. It makes use of a technology-led approach to generate returns from the distressed small-cap US oil and gas sector.

The company’s current management team has a wealth of experience and a track record that includes successful energy sector acquisitions, turnarounds and exits. As an example, Zephyr Energy cites the turnaround and sale of Cabot LNG – a liquified natural gas ex-subsidiary of Boston’s Cabot Corporation – for $800 million.

The Zephyr Energy board and its affiliates invest alongside shareholders, and have collectively purchased more than 12.5% of the company’s outstanding shares. Currently, Zephyr’s primary focus is the development of a high-impact appraisal project in Utah’s Paradox Basin.

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MobilityOne Limited

MobilityOne Limited incorporated in Jersey and listed on the LSE’s AIM in mid-2007. The group specialises in providing e-commerce payment solutions and platforms in Malaysia.

Its services are utilised by operators across several industries, including financial institutions, hypermarkets and retailers, transportation service providers, and other types of services requiring payment and transactional technology.
The company reports that it has created a payment eco-system consisting of more than 2,000 retail points and eight banking partners – providing a collective coverage of more than 10 million account holders. Its technology solutions are marketed under the brands MoCS and ABOSSE, and its subsidiaries include MobilityOne Sdn. Bhd. and Netoss Sdn. Bhd.

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ADVFN

ADVFN is a global stocks, cryptocurrency and forex information website aimed at private investors and the retail trading market. The company is incorporated in the UK and listed on the London Stock Exchange’s AIM.

Originally a UK-based site, the company now has operations in the US, UK, Brazil, France, Italy, Canada, Australia and Germany. It provides share price data from approximately 80 stock exchanges across the globe.

A reported 34 million unique users per year generate one billion page impressions for ADVFN – giving the website an opportunity to put financial (and other) advertisers in front of a large and active audience.

In September 2006, ADVFN acquired InvestorsHub.com, a North American online investment community website. In July 2009, ADVFN bought three new entities: the online IPO trading platform, AllIPO, and two stock brokers – TSCTrade and Throgmorton Street Capital.

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Premier African Minerals

Premier African Minerals is an emerging tungsten producer developing a portfolio of metals and agricultural mineral projects across Africa. The group’s management enjoys a successful track record within the mining industry: one board member acted as a founder, and another as a director, of UraMin Inc., a uranium exploration outfit sold for over $2.5 billion in 2007.

The group currently produces tungsten from its 49% stake in the RHA Tungsten Mine, and holds interests in MN Holdings Limited and Circum Minerals Limited. The former owns and operates the Otjozondu Manganese Mining Project in Namibia, while the latter owns the Danakil Potash Project in Ethiopia.

The news of the moment, however, is that African Premier Minerals has been granted a three-year Exclusive Prospecting Order (EPO) by the Zimbabwean government over an area comprising the Zulu Lithium and Tantalum claims.

According to the group, the project is potentially the largest undeveloped lithium-bearing pegmatite in Zimbabwe.

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Oilex Limited

Founded in 2003, Oilex Limited was incorporated in Australia but listed on the London AIM in early 2006. The company states that ‘Oilex’s strategy is to use its extensive technical and commercial expertise to explore, appraise and develop unconventional petroleum resources around the Indian Ocean Rim to meet growing energy demands in the region.’

In April 2021, its board announced that they had arranged the necessary funding to acquire the Gujarat State Petroleum Corporation’s 55% interest in the Cambay Production Sharing Contract (PSC). This will allow Oilex – given the additional required funding – to drill wells to assess its possible access to Eocene gas accumulation in the region.

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Ebiquity

Ebiquity is an independent marketing and media consultancy. It has 18 offices internationally and operates in 14 high-value advertising markets, including London, Paris, New York, Madrid, Singapore, Shanghai and Sydney.

The company aims at minimising wasteful media expenditure and maximising the effectiveness of investment by looking to data and analytics when consulting with clients.

It reports that it has the most comprehensive view of the global media market as it analyses $55 billion in media spend from 75 markets, and that its compliance division, FirmDecisions, audits $40 billion of contract value annually.

Founded in 1997, Ebiquity was admitted to the London Stock Exchange AIM in 2000, and its share price has shown a consistent appreciation over the opening months of 2021.

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How to trade or invest in penny stocks

With us, you can either invest in penny stocks, or trade them long or short.
When investing, you’ll use one of our share dealing accounts to buy UK shares outright from just £3 commission.2 You’ll also receive any dividends if the company grants them.

When you trade penny stocks, you do so with derivatives like spread betting and CFDs. You won’t own the stock, but you can use leverage to open a position while putting up just a percentage of the capital.

It’s important to bear in mind, however, that leverage will amplify both your profits and your losses, and that you could lose more than your deposit. You should never risk more than you can afford to lose, and always take steps to manage your risk.

You will also be able to go short on penny stocks – profiting if the share price falls, but your risk is unlimited in this case.

With spread bets, you can trade tax-free and won’t have to pay a commission.3

With CFDs, you won’t have to pay stamp duty and can offset any losses against profits for capital gains tax.3

How to trade penny stocks

  1. Create an account or log in and go to our platform
  2. Choose between spread bets and CFDs and search for your opportunity
  3. Select ‘buy’ to go long, or ‘sell’ to go short
  4. Set your position size and take steps to manage your risk
  5. Open and monitor your position

How to invest in penny stocks

  1. Create an account or log in and go to our platform

  2. Search for the penny stock you’d like to invest in

  3. Select ‘buy’ in the deal ticket (you can only go long when investing)

  4. Choose the number of shares you want to buy

  5. Open and monitor your position

What are the risks and rewards associated with penny stocks?

A number of well-known companies started off as penny stocks. Those that invested in companies such as Ford Motor Co or JD Sports Fashion in the early stages have been well rewarded, however it is important to stress that many penny stocks ultimately fail and that investing can be highly speculative.

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. This could range from a small pharma stock developing a new drug to a junior miner digging for gold in foreign destinations, both of which are highly risky endeavours but ones that can be transformational if they are successful.

News coverage and analysis of penny stocks is harder to come by compared to gaining insight into larger, more popular stocks, and issues of corruption and fraud tend to be more prominent, although even the largest stocks are exposed to these matters too.

Read more about Singapore's penny stock crash of 2013

It is also worth noting that penny stocks are more likely to raise equity from investors on an ongoing basis as it gives them a way of securing vital funds for growth if traditional lenders refuse to provide debt, or if any available debt is too pricey. Each fundraising dilutes the shareholding of existing investors and devalues the price per share.

Footnotes

1 As measured from 2 January 2021 to market opening 1 June 2021
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.

Last updated : 2021-06-21T09:17:27+0100


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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