10 Best Penny Stocks UK 2024 Guide
If you would like to learn how to start trading penny shares and discover the best penny stocks to buy, then this Penny Stocks UK Guide is for you.
There is no doubt that the best penny stocks are volatile. After all, the very definition of a penny stock UK is a company whose share price is under £1 and for US penny stocks below $5.
These can be young, growing companies whose share price could rise rapidly in a short period of time or it could be a more established company whose share price has struggled but could rise once more. If you're interested to learn more about this then keep on reading.
Table of Contents
- What are Penny Stocks?
- 10 Best Penny Stocks UK to Watch
- Investing in Penny Stocks UK - Pros & Cons
- How to Choose a Penny Stocks UK Broker
- How to Invest in the Best Penny Stocks UK
- Day Trading Penny Stocks
- Swing Trading Penny Stocks
- How to Start Investing in Penny Stocks UK
- Why Invest in Penny Stocks UK with Admirals?
- FAQs on Penny Stocks UK
What are Penny Stocks
What are penny stocks? A penny stock, or penny share, is defined as a publicly traded company whose stock or share price is trading for less than 1 GBP in the UK stock market, less than 1 EUR on European stock markets, or less than 5 USD on US stock markets.
In general, the companies have very low share prices which makes them more volatile and are, therefore, seen as higher-risk stocks. However, be sure to read on as there is an important distinction between a company whose share price is low because they are early on in its overall business journey and a company that has been around for a long time but has a low share price.
10 Best Penny Stocks UK to Watch
If you're looking for a quick list of some of the best penny shares to watch then keep on reading. Remember that some penny stocks don't stay there for long and can easily start to move higher if more and more investors are attracted to the stock. So, you have to be fast but make sure you do your research beforehand. No one can truly know what the 'best' is beforehand as it is subjective. What could be the best UK shares for some may be different for others.
Below is a list of the top 10 penny stocks UK trading on the London Stock Exchange (LSE) to get started with. Be sure to do more research and analysis and manage risk properly as investments will go up and down causing winning and losing trades. To get started you may opt to trade from a demo account so you can practice your skills in a virtual environment until you are ready to go live.
Top 10 penny stocks UK to watch this year:
- Lloyds Banking Group
- AO World
- 888 Holdings
- Tullow Oil
- De La Rue
- Hochschild Mining
- Vodafone Group
As you can see in the list above, there are some very famous names trading as penny stocks in the UK whose share price is under £1. Let's take a look at the top 5 penny shares in a bit more detail.
Lloyds Banking Group (LLOY)
Lloyds Banking Group is a multinational British bank and financial services company headquartered in London and probably needs no introduction to those in the UK. The company was formed in 2009 through a merger between Lloyds TSB and HBOS and serves more than 26 million retail customers. In 2022, the bank reported a 23% rise in net income to £7.1 billion from the year before. For the past 10 years, the bank's share price has been trading between GBX 90p and GBX 20p. The high volume of shares traded makes it one of the most interesting penny stocks to keep an eye on.
AO World (AO.)
AO World is another company that is maybe familiar. Through its online website founded in 2000, it is a major retailer of domestic appliances such as washing machines and fridges. Last year, the company posted a 10% increase in revenue from the previous year to £1.7 billion. The share price delved into has been trading between GBX 100p and GBX 37p since 2021.
ITV is a well-known media company operating the ITV network on Channel 3. It is the largest and oldest commercial TV network in the UK. You don't often get penny stocks within the FTSE 250 index of companies but ITV's share price fell into penny stock territory in February 2022. Since then it has traded between GBX 96p and GBX 54p. It has spent most of 2023 on the decline with 2024 forecasted to be around multi-year lows.
888 Holdings (888)
888 Holdings is an online gambling company founded in 1997 and headquartered in Gibraltar. Last year, the company posted a 12% increase in revenue from the prior year to $3.6 billion. The company was fined $3 million in 2022 due to failures in protecting its customers from the harms of gambling. The share price entered penny stock territory in October 2022 and traded as low as GBX 50p in the first quarter of 2023 but ended the year at GBX 95.55.
Tullow Oil (TLW)
Tullow Oil is an oil and gas exploration company with assets in Africa and Latin America. As with most other oil companies, it had good years since the pandemic with a 40% rise in revenue from the previous year to $1.7 billion. This was largely down to the rise in oil prices from the aftermath of the pandemic. However, since entering penny stock territory in December 2019, the share price has traded between GBX 66p and GBX 7p ever since. In January 2024, the stock was trading around GBX 33p - in the middle of the long-term price range.
Hammerson is a real estate investment trust (REIT) founded in 1985 with properties in the UK and Europe. Last year, the trust posted a 10% drop in revenue from the prior year to £1.7 billion. As most of its properties are in the retail and leisure industries the pandemic took a toll on the company's revenue. Since the pandemic, the share price has been trading between GBX 44p and GBX 4p.
Marston's is an owner and operator of more than 2,000 pubs in the UK. Last year, the company reported a 7% increase in revenue from the prior year to £1.3 billion. However, the pub's profit margins have been declining as record-high inflation took its toll. The stock entered penny stock territory during the pandemic and has since been trading between GBX 100p and GBX 20p.
De La Rue (DLAR)
De La Rue provides secure digital and physical solutions to protect personal identities, goods and trade such as tax stamps, cheques, bank cards and bank notes. In fact, the company is the largest operator in printing commercial banknotes in the world. One-third of all banknotes in the world have come from De La Rue. However, the stock entered penny stock territory in May 2022 and reached a record low of GBX 29.10 in June 2023. The share price started in 2024 at GBX GBX 86.03.
Hochschild Mining (HOC)
Hochschild Mining is a precious metal mining company with operations mainly in Argentina and Peru. Last year, the company posted a 10% increase in revenue from the prior year to $1.3 billion. The share price entered penny stock territory in July 2022. While it has surged 80% higher from the lows of 2022 to the end of October 2023, by the end of January 2024 it was at GBX 96.70.
Vodafone Group (VOD)
Vodafone Group is a telecommunications provider operating in Europe, Africa, Asia and Oceania. Its share price has struggled in recent years and ended in the red for the past five years. The share price started 2024 trading at GBX 68.56. Investors will be watching the recent management change to see if that can help to revive its growth.
Investing in Penny Stocks UK - Pros & Cons
Many new investors often ask the question: can you make money in penny stocks? While it can be the case for some individuals there are risks with any form of trading and investing. The first step should always be to educate yourself regarding these risks and to think long-term rather than short-term (even if considering trading shorter-term strategies). This is because many individuals looking for a get-rich-quick type of scheme - which trading and investing are certainly not - tend to over-risk their trades and wipe out their accounts.
Once these risks are realised, learning how to make money day trading penny stocks or even learning how to start trading penny stocks online requires a sound methodology and trading strategy. Further down the article, we go through an example penny stock trading system. However, it is important to know that short-term traders, such as day traders are attracted to penny stocks due to the volatility these kinds of stocks provide. Longer-term investors favour the low stock price as it could provide the possibility of significant growth in the future if they turn into blue-chip stocks.
However, with a sound strategy and risk management principles some risks can be managed, but not all, so only trade with capital you can afford to lose. You can learn more in the 'Risk Management for Forex and CFD Trading' guide.
Fortunately, you can also access a free demo trading account from Admirals which will allow you to trade in a virtual trading environment so you can start paper trading penny stocks until you are ready for a live trading account. To open your free demo account, simply click the banner below:
How to Choose a Penny Stocks UK Broker
Traditionally, penny stocks have not been listed on major stock exchanges and are often traded on the OTC, or Over the Counter, markets, such as the OTC Bulletin Board which is an electronic trading service operated by the Financial Industry Regulatory Authority. The minimum standards for companies to list here are not as high as companies listed on major stock exchanges, such as the NASDAQ, New York Stock Exchange or London Stock Exchange - making these types of penny stocks highly speculative.
However, there are stocks that have low share prices listed on major exchanges. In fact, there are many stocks that trade under $5 on US stock exchanges and under £1 on the London Stock Exchange that are available to trade on with the UK and FCA-regulated broker Admirals. Not all UK brokers will offer penny stocks due to their volatility.
These types of penny stocks provide a bit more confidence to investors as the requirements to be listed on a major stock exchange are much higher, such as the need to have a minimum market capitalisation. If a stock drops below these minimum standards the exchange can delist the stock and it moves down to the OTC market.
How to Invest in the Best Penny Stocks UK
If you would like to learn how to trade penny stocks, as well as other stocks from the biggest stock exchanges in the world, the first step is to make sure you have the right trading tools and products to do so. This includes having the right platform, broker and stock trading strategy.
1. Who is the best broker for day trading penny stocks UK?
To buy shares in a particular company, you need to find someone who not only owns shares of the same company but is also willing to sell them to you. This is what your broker does for you. Through your broker's trading platform, they route your buy and sell orders to other buyers and sellers through their connection with the stock exchange that lists the shares of the company you are trading.
As your broker will hold the capital you want to trade or invest with, it is important to choose the best broker, ideally one that offers the highest regulation and security possible. For example, investment firms operating under the Admirals trademark offer regulation from the UK Financial Conduct Authority and other authorities from around the world.
With Admirals you can:
- Open an Invest.MT5 investing account to buy penny shares and ETFs (Exchange Traded Funds) from 15 of the largest stock exchanges in the world.
- Open a Trade.MT4, or Trade.MT5 trading account to trade penny stocks via CFDs (Contracts for Difference) in order to go long and short a market to potentially profit from rising and falling markets.
- Access the fastest and most popular trading platform in the world, MetaTrader, for Web, Windows, Mac, iOS and Android operating systems.
2. What is the best trading platform for penny stocks UK trading?
When it comes to trading having the right trading tools is essential. For new traders, it is worthwhile asking the question: how do beginners buy penny stocks? - rather than trying to follow how the institutional traders would. The first step is to choose the right trading platform of which there are quite a few to choose from. With the MetaTrader suite of trading platforms, provided by Admirals, users can view current and historical prices of shares using stock charts and trade directly from the platform - providing an all-in-one experience.
Admirals offers the following MetaTrader trading platforms:
- MetaTrader 4
- MetaTrader 5
- MetaTrader WebTrader
- MetaTrader Supreme Edition (A custom plugin for MetaTrader 4 and MetaTrader 5, created by Admirals and professional trading experts)
Through the above platforms, you can trade across stocks and shares from some of the largest stock exchanges in the world, access penny stocks that are trading on the major exchanges, and access other markets such as indices, commodities, foreign exchange and more.
Once you've opened your live, or demo trading account, and downloaded your free MetaTrader trading platform provided by Admirals, you can now start to view the different stocks available to trade using the following steps:
- Open MetaTrader.
- Open the Market Watch section from the View menu at the top or by pressing Ctrl+M on your keyboard. This will open up a list of market symbols on the left side of your chart.
- Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
- This will then open the window shown below which details all the markets available for you to trade on.
Now you can left-click on one of the symbols you would like to view and drag it onto the chart to view the current and historical price of the symbol you've chosen. From here, you can also open up a trading ticket:
- Right-click on the chart.
- Select Trading.
- Select New Order, or press F9 on your keyboard.
- A trading ticket will open for you to input your entry price, stop loss and take profit levels and unit size (volume).
To download your free MetaTrader 5 trading platform, provided by Admirals, simply click on the banner below!
3. How do you find the best penny stocks to buy?
The first criteria to identify penny stocks to trade online is to identify US stocks trading below $5, UK stocks trading below £1 or European stocks trading below €1. For example, below is a list of stocks that are available to trade with Admirals on the American Stock Exchange:
In the above Market Watch window, the bid column is the sell price of the symbol and the ask column is the buy price. As you can see, there are quite a few stocks that are trading below $5. At the time of writing, this includes GSAT (Globalstar), NAK (Northern Dynasty Minerals Ltd) and many more.
After identifying these types of stocks on the different exchanges, the key question on which ones to trade will depend on the type of trading strategy you choose to adopt.
4. How to choose the best penny stocks UK trading strategies
A common question among beginner traders is: how does trading penny stocks work? Perhaps one of the best penny stock trading tips to know is that it is always best to follow a trading strategy that you are confident in. A trading strategy helps traders analyse the price of a penny stock, or fundamental analysis information, for any clues on where the stock could move next. There are many different ways to perform this analysis and they generally fall under two categories:
- Fundamental Analysis. This is the study of company-specific data and general economic data. Company-specific data includes analysing earnings per share announcements, sales, profits, new product launches and so on. Traders are trying to identify if the company is likely to make more profit in the future as that could translate into a higher share price as the company becomes more valuable. With traditional penny stocks, the information can be difficult to obtain. However, for penny stocks trading on the major stock exchanges, there is much more information available.
- Technical Analysis. This is the study of price to identify patterns of buying and selling activity which could lead to possible entry and exit levels. The study of a share price generally comes down to using chart patterns, price action and technical trading indicators such as moving averages, MACD and many more.
While some traders will choose to specialise in one type of analysis, most traders use a combination of both when creating a trading strategy. The weighting between each depends on the strategy style chosen by the trader. These include:
Day Trading Penny Stocks
This style of trading is where traders buy and sell shares within a single trading day and exit by the end of the day. It is rare for day traders to hold trades overnight. Traders would typically use the lower timeframes when making trading decisions. In the MetaTrader platform provided by Admirals, you can view the one-minute, five-minute, and 15-minute charts and many more different timeframes.
While day trading penny stocks seem attractive to many beginner traders it is very risky. This is because the trader has to process a large amount of data and analysis in a short period of time which allows for errors, frustration and drained willpower. Most new traders are simply not ready to take a high number of traders in a short period of time. It's great if they all win but it is just as easy that they can all lose. Perhaps one of the best ways to get started with a day trading strategy is to start off with a demo trading account. This allows the trader to practice their skills, methods and trading ideas in a virtual trading environment while seeing what it takes to trade in such a style. Some other things to consider are:
- Which penny stocks will you focus on?
- What timeframe will you focus on?
- What tools will you use to enter and exit trades?
- How much will you risk per trade?
It is not uncommon for day traders to use a variety of different technical trading indicators to help with trading decisions. These indicators could be in the form of momentum and trend-based indicators. The 15-minute chart below is just an example of a possible day trader's setup, using different indicators and tools.
Did you know that Admirals offers an enhanced version of Metatrader that boosts trading capabilities? Now you can trade with MetaTrader 4 and MetaTrader 5 with an advanced version of MetaTrader that offers excellent additional features such as the correlation matrix, which enables you to view and contrast various currency pairs in real-time, or the mini trader widget - which allows you to buy or sell via a small window while you continue with everything else you need to do. Download it for free today by clicking the banner below.
Swing Trading Penny Stocks
This type of trading strategy involves traders holding stocks and shares for several days and in some cases several weeks. Swing traders will often use a combination of fundamental and technical analysis in their trading decisions with more weight placed on technical analysis and the use of technical indicators such as moving averages (a commonly used trading indicator when share trading online). Moving averages are used to help identify and confirm the overall trend of the market. This gives the swing trader the directional bias to trade in - long or short.
Swing traders will also often use overbought and oversold indicators such as the Relative Strength Index (RSI), Stochastic Oscillator and others. These help to identify overbought and oversold conditions in the market and therefore potential turning points where the market could change direction. Ideally, these indications would be in line with the overall trend of the market as confirmed by the moving averages.
However, they can also be used for reversal swing trading. This is where traders aim to identify the end of a trend by using indicators and oscillators to find reversal divergences between them and price. The daily chart below is just an example of a possible swing trader's setup, using different moving averages and other tools.
How to Start Investing in Penny Stocks UK
Investing strategies have a lot of similarities to trading strategies. The biggest difference is the holding period. Investors typically look to hold shares for many months or years and try to capitalise on the potential for a long-term capital gain, or for a penny stock to turn into a blue-chip stock.
If you are thinking of taking a long-term view on penny stocks, or other stocks and ETFs from around the world, you may consider the Invest.MT5 account where you can enjoy benefits such as:
- The ability to invest in thousands of stocks and ETFs from 15 of the largest stock exchanges in the world.
- Open an account with just €1 minimum deposit and invest from just $0.01 per share with minimum transaction fees of just $1 on US stocks.
- Receive free real-time market data, with no delays, at no extra cost.
- Create a stream of passive income by collecting dividend payouts.
- Use the world-renowned MetaTrader 5 multi-asset class trading platform.
You can get started right now by clicking the banner below and enjoying all of the features above and more!
You can learn more about different types of trading strategies in the ' Trading Strategies' guide.
Why Invest in Penny Stocks UK with Admirals?
- Trade with a well-established, highly regulated company which includes regulation from the UK's Financial Conduct Authority.
- Access the fastest and most popular online stock market trading software called MetaTrader which you can use on PC, Mac, Web, Android and iOS operating systems and is provided for free by Admirals.
- Open an Invest.MT5 investing account to buy shares and ETFs from 15 of the largest stock exchanges in the world.
- Open a Trade.MT5 trading account to trade via CFDs (Contracts for Difference) in order to go long and short a market to potentially profit from rising and falling markets.
- Benefit from a negative balance protection policy, on some accounts, when trading stock CFDs to protect you from adverse movements in the market.
- Invest in UK stocks from 0.1% of the total trade value, with a low minimum commission of just £1.
- How to Buy Shares Online
- Best Shares to Buy
- Stock Market Trading Hours to Know
- How to Trade the US Stock Market
- A Guide to Dividend Investing UK
- Day Trading Stocks Guide
FAQs on Penny Stocks UK
What are penny stocks UK?
Penny stocks are UK shares trading below £1, or US shares trading below $5.
Can you buy penny stocks in the UK?
Yes, you can buy penny stocks in the UK - if your broker provides them. It's best to stick with an FCA-regulated broker such as Admirals which allows you to buy stocks and shares from 15 of the world's largest stock exchanges including penny stocks and blue chip stocks.
What are the 10 best penny stocks to buy?
Penny stocks are notoriously volatile. A few penny stocks to watch whose share prices are under £1 (but will change over time) include Lloyds Banking Group, AO World, ITV, 888 Holdings, Tullow Oil, Hammerson, Marston's, De La Rue, Hochschild Mining and Vodafone Group.
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or recommendation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.