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

Strategic Minerals PLC

Strategic Minerals PLC is a diversified mineral development and production company with projects spanning the United States, UK and Australia. Its portfolio includes magnetite production and exploration interests in critical minerals. The group focuses on advancing assets toward commercialisation while generating revenue from existing operations to support ongoing development.

ImmuPharma PLC

Immupharma PLC is a biotechnology company developing novel peptide-based therapies, most notably for autoimmune and inflammatory diseases. Its lead candidate targets lupus, supported by earlier clinical studies. The company partners with research institutions to advance its pipeline while seeking further funding and collaborations to progress late-stage trials and commercial prospects.

Eco Buildings Group PLC

Eco Buildings Group PLC develops modular, sustainable building systems aimed at reducing construction time and environmental impact. Using engineered panels and low-carbon materials, it targets residential and commercial markets in emerging economies. The company focuses on scalable manufacturing, government partnerships and expanding its presence in regions with high demand for affordable housing.

Oracle Power PLC

Oracle Power is an energy and natural resources developer with projects primarily in Pakistan and Western Australia. Its portfolio includes coal-to-power, green hydrogen and critical minerals exploration. The company aims to participate in large-scale energy transition projects by securing strategic partnerships, regulatory approvals and infrastructure agreements.

Europa Oil & Gas Holdings PLC

Europa Oil & Gas Holdings PLC is a UK-focused exploration and production company with assets in onshore and offshore basins. It generates revenue from producing fields while pursuing appraisal and exploration opportunities. The company aims to enhance reserves through farm-outs, development partnerships and targeted drilling campaigns across its core North Sea portfolio.

Jangada Mines PLC

Jangada Mines PLC is developing natural resource projects in South America, including interests in platinum group metals, nickel and copper. Its main focus is advancing the Pitombeiras vanadium-titanium-iron project in Brazil. The company seeks to progress technical studies and assess commercial routes as demand for battery-related minerals grows.

Cadence Minerals PLC

Cadence Minerals PLC invests in early-stage mining projects with exposure to lithium and rare earths. Its strategy centres on identifying undervalued assets, securing strategic stakes and working with partners to de-risk development. The portfolio includes interests in Brazilian lithium and European rare earth projects aligned with long-term electrification trends.

80 Mile PLC

80 Mile PLC is an exploration company focused on natural resource opportunities, primarily early-stage mineral projects. Its strategy involves acquiring prospective licences, undertaking initial geological work and attracting partners to fund further exploration. The company seeks exposure to commodities with favourable long-term demand fundamentals while maintaining a low-cost operating base.

Panthera Resources PLC

Panthera Resources PLC is a gold exploration and development company with assets in West Africa and India. It aims to expand resources at its key projects through drilling and geological analysis. The company also seeks to progress licence and legal processes in India while pursuing joint ventures to accelerate development.

EnergyPathways PLC

EnergyPathways PLC is an energy transition company developing natural gas and lower-carbon projects in the UK. Its focus includes supplying domestic markets with secure energy while exploring technologies that reduce emissions. The company aims to position gas as a bridging fuel during the shift toward renewable energy and lower-carbon solutions.

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.