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.

*Data collected on 4 February 2025

Remember past performance is no indicator of future returns

Craven House Capital

UK based investment company Craven House Capital primarily invests in eCommerce businesses which have offerings ranging from medical supplies, digital platforms and online media.

In FY24 operating expenses reached £818 down from £5450 the year before and its investments were worth almost 5.2k down from £1.1 million the year before. This is largely due to difficult market conditions.

Going forward, the company aims to continue focusing on its investment strategy, generating returns through income and capital appreciation. But uncertainties within the market as well as the early stage nature of most of its investments mean it’s not without risk, but the company believes its resources are sufficient enough to overcome this.

Over the past month, the company’s share price return has increased by 70%.

Empyrean Energy

Australian oil and gas development company Empyrean Energy has projects in the US, Australia and Indonesia. Its main assets include the Sacramento Basin projects in California, the Wilson River Prospect in Australia and the Duyung PSC in Indonesia. It also invested in the Eagle Oil Pool Development Project in California and the Eagle Oil Pool Development Project.

The company’s H1 results were mixed with administrative expenditure up almost 70% year—over—year. Through selling shares, the company was able to raise £1.3 million in November last year, but more funding is needed for Empyrean Energy to meet all its financial obligations. The company is confident that this can be achieved by selling its stake in the Mako Gas Field but this isn’t guaranteed.

Empyrean Energy’s share price return has increased by 26% over the past month.

DP Aircraft I Limited

DP Aircraft I Limited is an aircraft company based in Guernsey that focuses on the buying, leasing and selling of Boeing 787—8 (the Dreamliner). It currently has two engines both equipped with Rolls—Royce engines and renowned for its spacious passenger cabin.

In H1 the company reported a profit per share of $0.0111, up from a loss of $0.0170 the year before. Its two aircrafts are leased to Thai Airlines until 2026 and frequently fly in Asia and to Australia. There’s an option to extend this lease until 2029 and reduced rates, but this agreement has yet to be finalised.

Over the past month the company’s share price return has increased by 17%.

TomCo Energy

Oil exploration and development company TomCo Energy is working to extract oil from sands in Utah. This project is run through its subsidiary Greenfield Energy LLC. The company is also developing two plants which can process oil and it also owns oil rich land in Uintah Country.

The company’s H1 results reported an operating loss of 264k, down from 1.2 million the year before. Gross profit wasn’t reported but there was a decrease in both administrative costs and foreign exchange losses.

TomCo Energy has recently raised £0.3 million by selling new shares to help its subsidiary Greenfield Energy with its project in Utah. For $17.25 million Greenfield could buy the 90% of a site called Tar Sands Holdings that it doesn’t own, but it’s still uncertain as to whether they manage to secure the finances to do so.

Over the past month TomCo Energy’s share price return has increased by 13%.

Deltex Medical Group

Deltex Medical Group is responsible for the development, manufacturing and distribution of advanced medical devices that monitor heart function and blood flow. These tools are used in critical care, kidney injury treatment, certain surgeries, pediatric care and recovery programs.

In H1 the company reported stable results. Revenue remained flat year—over—year at £1.1 million and its cost base for 2024 was down. Sales of its new TrueVue monitor are beginning to increase with particular popularity in overseas markets, although this has yet to translate into revenue. The company remains confident in its performance for H2 and intend to focus on sales to international markets.

Over the past month Deltex Medical’s share price return has increased by 13%.

Reabold Resources

Reabold Resources is an oil and gas investment company based in the UK, with projects in the UK, US, Italy and Romania. The company invests in both onshore and offshore oil fields, with exploration licenses in the North Sea and a 42% stake in Daybreak Oil & Gas in California.

Reabold Resources H1 results ending 30 June 2024 were positive. Net loss decreased by 46% to £2M, and cash and cash equivalents were up 41% reaching £7.6M up from £5.4M the year before.

Looking ahead, Reabold Resources are optimistic about its upcoming projects. Early production plans at West Newton appear both valuable and cost effective. Its strong partnership with trading company Gunvor as well as an effective regulatory process makes The Colle Santo gas project also seem promising and could positively impact the business in the coming months.

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.

For the 6—months ended 30 June 2024, the company reported an operating loss of 5.7 thousand, but this was down from a loss of 1.6 million the year before.

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

Europa Oil & Gas

Oil and gas exploration company Europa Oil & Gas extracts and produces oil from sites across the UK, Ireland and West Africa. Its key assets include the Serenity oil discovery, Inezgane Permit in Morocco, the Inishkea prospect in Ireland, as well as four oil fields in the UK Wressle, West Firsby, Crosby and Warren.

In FY24 the company reported a revenue of £3.6 million, down 46% from the previous year due to lower oil production and prices. Despite this, the company continues to generate income from its UK assets and remains financially stable. In 2024 the company brought a 42.9% stake in Antler Global which gives it access to a resource rich oil and gas area in Equatorial Guinea. Looking ahead the company are looking to grow this project as well as focusing on ones it has in the UK and Ireland.

Rockfire Resources

Rockfire Resources is an exploration company who works to extract critical, base and precious metals and minerals. Its key assets include copper, silver and gold projects in Queensland Australia as well as the Molaoi project in Greece where it extracts zinc, germanium, lead and silver.

Its H1 results were mixed with the company reporting an £8.9k loss, up almost 50% compared to the year before. This is mostly due to increased administrative costs for Hellenic Minerals and expenses relating to the exploration of new business opportunities. Despite this, the company remain optimistic and are looking to focus on its Molaoi zinc/silver/lead deposit on Greece which they believe to be a key growth opportunity.

Vast Resources

Vast Resources is a UK-based mining company with operations in Eastern Europe and Africa. In these places, the company mines for zinc, silver, gold, diamond and copper. Its key assets include the Takob mine in Tajikistan, the Blueberry Gold Project in Zimbabwe and the Baita Plai Polymetalic Mine in Romania.

Although sales increased throughout 2023, their revenue of $3.7 million was stable year-on-year. This was due to lower copper prices. The company also reported a 14% drop in overhead expenses, mostly as payroll costs were down.

In the past month the company’s share price return has increased by 9%.

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

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.