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

What are penny stocks?

A penny stock is generally defined in the UK as a share trading below £1 per share with a market capitalisation below £100 million. Most UK penny stocks trade on the Alternative Investment Market (AIM), London's junior market for smaller companies, which operates under lighter regulatory requirements than the main London Stock Exchange. 

This lighter-touch regime makes AIM accessible to early-stage companies that would not yet qualify for the main market, but it also means investors have less regulatory protection and company disclosures can be less detailed.

The appeal of penny stocks is straightforward: a small share price means even a modest absolute movement can represent a large percentage gain. The risk is equally straightforward: the same dynamics work in reverse, liquidity is often thin, and many AIM-listed penny stocks are pre-revenue, pre-profit, or dependent on a single asset or catalyst to justify their valuation.

For investors interested in penny stocks as a trading vehicle rather than a long-term holding, spread betting and CFDs are also available with us on eligible AIM stocks, allowing you to take a position on price movements without owning the underlying shares. 

Spread bets are free from capital gains tax and stamp duty, though they are leveraged instruments and carry a high risk of rapid losses. For long-term investors, our share dealing account and stocks and shares ISA both provide access to AIM-listed stocks.

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Ten UK penny stocks to watch in July 2026

There is no single authoritative source for penny stock popularity in the way that dividenddata.co.uk provides a clean, ranked yield table for FTSE 100 stocks. Any penny stock list involves a degree of editorial judgement.

The ten stocks below were selected using a combination of three factors: popularity among investors, trading volume relative to each stock's size, and the presence of a substantive recent corporate development. Stocks that appeared consistently across internet platforms and had newsflow were prioritised.

All ten trade under £1 per share and have a market capitalisation below £100 million, meeting the standard UK definition of a penny stock. All are highly speculative, all carry significant risk of capital loss, and none constitute a recommendation to buy or sell. 

Past performance is not a reliable indicator of future results.

Kodal Minerals (KOD)

Kodal Minerals is one of the most consistently discussed penny stocks, driven by its transformation from an exploration company into a producing lithium miner. Its flagship Bougouni Lithium Project in southern Mali — operated through a 49% stake in Kodal Mining UK, alongside majority partner Hainan Mining — commissioned its Stage 1 Dense Media Separation plant in February 2025 and has since shipped three cargoes of spodumene concentrate, generating total revenue of approximately $89 million across the first three shipments.

March 2026 production of over 10,900 tonnes of spodumene concentrate at 5.28% lithium oxide was a record for the operation. A Phase 2 flotation plant feasibility study is targeting completion by end of 2026, with an investment decision to follow. The Boumou prospect, flagged by Hainan as potentially containing an additional 15.47 million tonnes of mineral resource, adds further optionality, though this estimate has not been independently audited or JORC-validated by Kodal. The key risks include Mali's security environment, the structure of Kodal's minority position within the operating company, and continued exposure to lithium price volatility.

TPXimpact (TPX)

TPXimpact is the highest-quality business on this list by conventional financial metrics and among the strongest share price performers on AIM over the past year. The digital transformation consultancy focused on UK public sector clients completed a three-year turnaround in the year to March 2026, with adjusted EBITDA rising 54% to £8.6 million and net debt halved to £4.2 million. Revenue rose 1% to £78.1 million, a resilient result given ongoing central government spending reviews.

New business wins reached £122 million — up from £70 million the prior year — including major contracts with DEFRA, NHS England, HM Land Registry, and HM Prison and Probation Service. A further £16 million contract with the Ministry of Justice was announced in June 2026. Management is targeting double-digit revenue growth, adjusted EBITDA of at least £12 million, and zero net debt by the end of FY27. The analyst consensus target price sits at 80p. 

TPXimpact trades at a meaningful discount to that target and offers a more substantive commercial story than most names on this list — though the pre-revenue public sector environment and its dependence on government contract cycles remain the primary risks. It is a good example of the breadth of the penny stock universe: a profitable, growing business that simply has a small enough market capitalisation to qualify.

Kromek (KMK)

Kromek develops radiation detection and bio-detection technology for medical imaging, civil nuclear, and defence and security markets. It’s popular in part because its share price has moved significantly over the past year. The company reported £15 million in revenue for the first half of its current financial year, up sharply from £3.7 million a year prior, driven by expanded distribution across 39 new countries in Europe, the Middle East and Asia, and a significant Siemens licensing agreement.

Management is guiding for revenue of at least £60 million by 2030, with a 30% EBITDA margin target. The company is the only independent commercial supplier of cadmium zinc telluride detectors in the medical imaging market and is expanding its production capacity by 8-10 times through the addition of new furnaces. 

Two analysts cover the stock with a consensus Buy rating and a 12-month price target of 22.5p, a significant premium to the current price. The stock has materially pulled back from its 52-week high, leaving investors debating whether the pullback is a buying opportunity or a sign of structural headwinds.

ImmuPharma (IMM)

ImmuPharma is a specialist biopharmaceutical company focused on developing peptide-based therapeutics, principally for autoimmune diseases and anti-infective indications. Its lead candidate P140 targets systemic lupus erythematosus, a chronic, life-threatening autoimmune condition for which treatment options remain limited. ImmuPharma is currently pursuing a licensing deal for P140, which it describes as its primary near-term corporate objective for 2026. 

The company has also launched a regulatory push for Kapiglucagon, a glucagon treatment for diabetes management.

ImmuPharma generates significant retail investor discussion principally because of its speculative nature — it is entirely dependent on the success of its licensing negotiations and clinical pipeline. 

The 2026 AGM passed all six resolutions with 93-99% shareholder support, reflecting a stable governance position. The 52-week share price range has been wide, reflecting the binary nature of drug development outcomes. 

Strategic Minerals (SML)

Strategic Minerals develops critical minerals projects, with its primary focus on the Redmoor tungsten-tin-copper project in southeast Cornwall, described by the company as Europe's highest-grade undeveloped tungsten resource. 

Tungsten has been classified as a critical mineral by NATO due to its importance in defence applications, aerospace, and advanced manufacturing, which has intensified investor interest in any credible domestic European source.

The company completed an £8.7 million fundraise in early 2026 to finance an expanded 22,500-metre, 44-drillhole infill and expansion drilling programme at Redmoor. A new JORC-compliant inferred mineral resource estimate of 17.4 million tonnes was published in March 2026, with the resource representing a 49% increase over prior estimates. 

A preliminary economic sensitivity analysis published alongside the resource estimate shows a base-case after-tax NPV of approximately $1.54 billion and a 40% IRR, though this remains preliminary, is based entirely on inferred resources, and is subject to significant uncertainty pending the forthcoming pre-feasibility study. Tungsten recovery in the most recent metallurgical study improved to 85.8%, up from 72% in a 2020 scoping study.

Cash flow from the company's Cobre magnetite operation in New Mexico — which generated $4.2 million in revenue in 2025 at an 85% operating margin — provides operational support while the Redmoor development programme progresses. 

Hardide (HDD)

Hardide specialises in advanced tungsten carbide surface coating technology — specifically chemical vapour deposition (CVD) coatings — used in high-performance engineering applications across oil and gas, aerospace, precision engineering, and semiconductor manufacturing. 

The company turned profitable in its financial year ended September 2025, with revenue rising to £6 million from £4.7 million, demonstrating that it has crossed the line from development-stage to commercially sustainable.

New orders from a major North American energy customer worth £1.75 million were announced in early 2026 and are underpinning growth expectations into 2027. 

Two analysts cover the stock with a consensus price target of 60p, a significant premium to the current price, making it an interesting risk-reward profile for investors who believe the analyst case. 

MobilityOne (MBO)

MobilityOne is an AIM-listed provider of electronic payment infrastructure and fintech solutions, operating primarily in Southeast Asia through a multi-channel distribution network spanning mobile wallets, e-commerce platforms, kiosks, ATMs, and internet banking. 

Its technology platform handles mobile prepaid reload, bill payment, remittance, and white-label e-money services across Malaysia and the broader regional market.

Two significant corporate developments in early 2026 have driven chat board interest. 

First, shareholders of its US partner Technology and Telecommunication Acquisition Corporation approved a joint venture with Super Apps, with MobilityOne set to receive up to RM60 million — approximately £10.3 million — linked to the transaction, which involves carving out part of its electronic voucher business into a subsidiary called OneShop. 

Second, its Malaysian subsidiary received conditional approval to establish MBO Bank (Labuan) Limited as an Islamic digital bank — though the company has stressed that full licensing requires substantial additional regulatory requirements to be met around capital, governance, and operational readiness

United Oil & Gas (UOG)

United Oil & Gas is an oil and gas exploration company focused on its 100% owned Walton-Morant licence, a massive offshore exploration block in the south of Jamaica. 

The company has been actively derisking this asset in 2026, completing an offshore geochemical exploration survey earlier in the year using the research vessel R/V Gyre, which undertook multibeam echo sounder surveys, heat flow measurements, and seabed piston coring operations to characterise the hydrocarbon potential of the licence.

Preliminary results from the survey confirmed thermogenic hydrocarbons — including C4 and C5 hydrocarbons such as butanes and pentanes — in the headspace gas dataset. Thermogenic hydrocarbons are not typically associated with biogenic gas systems and are consistent with a potential petroleum contribution from subsurface source rocks, further de-risking the basin. 

Petroleum systems modelling on the licence has historically suggested the presence of oil-mature source rocks, supported by onshore and offshore oil seeps and repeat satellite slick anomalies. 

The company holds a five-year Environmental Permit from Jamaica's National Environment and Planning Agency for a range of non-invasive offshore surveys, providing the regulatory framework for further exploration activity. Investors are hoping for a farm-in deal with a major for this frontier.

Westmount Energy (WTE)

Westmount Energy is an investment vehicle providing exposure to the Canje Block — an offshore oil and gas exploration block located in the prolific Demerara-Berbice basin off the coast of Guyana, one of the most significant deepwater oil exploration discoveries of the past decade. 

The Canje Block sits adjacent to the Stabroek Block, where ExxonMobil and partners have discovered more than 11 billion barrels of recoverable oil equivalent. Canje's main licence holders are TotalEnergies and ExxonMobil, and the Westmount position provides retail investors with an indirect equity stake in the Canje exploration programme.

Westmount holds a small equity interest in a subsidiary that has an interest in the Canje licence, making the investment highly speculative and several steps removed from actual production. Canje has faced delays to its planned drilling programme, and investors in Westmount are effectively waiting on developments driven by major international operators over whom Westmount has no control. 

Sancus Lending Group

Sancus Lending Group is an alternative finance provider offering property-backed and business loans to borrowers in the UK and offshore markets. It operates in a segment of the lending market that sits between mainstream bank lending and higher-risk peer-to-peer platforms, focused on short-term, asset-backed lending where the loan is secured against property or business assets.

Sancus has generated chat board interest primarily because of the speculative nature of smaller financial companies in the current credit environment. Loan book performance, funding arrangements, and broader credit conditions can all drive rapid share price movements in stocks of this size and liquidity profile. 

There has been limited major public corporate news from the company in the first half of 2026, and the stock remains thinly traded. Investors may be attracted to Sancus are typically speculating on either an improvement in the credit environment benefiting its loan book, a strategic corporate development, or simply the mean reversion of a depressed share price in a sector that has faced headwinds. 

Risks every penny stock investor must understand

Penny stocks are among the highest-risk investments available to UK retail investors. Before committing capital to any of the names above, these risks must be understood clearly.

• Liquidity risk. Many AIM penny stocks have very thin trading volumes. A small number of buy or sell orders can move the price significantly. This means you may not be able to exit a position at the price you expect, particularly if you need to sell quickly or hold a large position relative to the stock's normal daily volume.
• Dilution risk. Companies at this stage frequently raise additional capital through share placings to fund operations, exploration programmes, or working capital. Each placing dilutes existing shareholders. Several stocks on this list have conducted fundraisings in the past 12 months and may do so again.
• Spread risk. The bid-offer spread on penny stocks — the gap between the buying price and the selling price — can be very wide as a percentage of the share price. A 0.5p spread on a 2p stock represents a 25% round-trip cost before any market movement. Always check the spread before trading.
• Binary event risk. For development-stage companies — particularly the mining, oil and gas, and biotech names on this list — value is largely determined by single binary events: a drilling result, a licensing deal, a feasibility study outcome, or a regulatory approval. These can go either way, and the downside of a negative outcome is often severe.
• Regulatory and geopolitical risk. Several stocks on this list have exposure to international jurisdictions — Mali, Malaysia, Jamaica, Guyana — where political risk, regulatory change, and currency exposure add additional layers of uncertainty beyond the fundamental business case.
• No personal investment advice. Nothing in this article constitutes financial advice or a personal recommendation. All investments carry risk. The value of your investments can fall as well as rise and you may get back less than you invest.

For broader context on how to evaluate individual stocks, see our guides on how to pick stocks, fundamental analysis, and what are penny stocks.

How to trade or invest in penny stocks with us

You can access AIM-listed penny stocks through several routes with us, depending on your approach.

Share dealing gives you direct ownership of shares. UK shares are available from £3 commission per trade online. Buying AIM shares through a share dealing account means you pay stamp duty at 0.5% on purchases, though AIM shares held in an ISA are exempt from stamp duty, capital gains tax, and income tax on dividends — making the ISA the most tax-efficient route for long-term penny stock investors within the annual £20,000 allowance.

Spread betting and CFDs allow you to take a leveraged position on eligible AIM stocks without owning the underlying shares. Spread bets are free from capital gains tax and stamp duty, though gains from CFDs are subject to CGT. Both are leveraged instruments — losses can exceed your initial deposit — and are best suited to shorter-term traders who understand the mechanics of margin and leverage. For a full explanation of how spread betting and CFDs are taxed, see our spread betting vs CFDs tax guide.

If you want to practise trading AIM stocks without risking real capital, you can open a demo account with us and use virtual funds to simulate trades before committing real money.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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. Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invest.