Confidence within the investment community is deteriorating rapidly as news of a new Covid-19 variant emerges. As is common, UK shares of all sizes and colours — from FTSE 100 heavyweights to tiny penny stocks — all slumped on Friday. There’s a possibility that a new stock market crash could be just around the corner.
Despite this rising uncertainty I don’t plan to stop investing. This is because there are many UK shares I believe should thrive even if the pandemic cranks up a notch. Some might even receive a boost from a dreaded deterioration in the coronavirus crisis. With this in mind, here are four solid penny stocks I’m thinking of buying in December.
#1: EKF Diagnostics
I’d expect business at EKF Diagnostics to pick up significantly if the pandemic does indeed worsen. This is because it manufactures the testing kits that diagnose whether an individual has contracted Covid-19. Revenues at the business rocketed 45% in 2020 as demand for its medical products grew. And since then it has embarked on acquisition action to bolster its operations, EKF snapping up coronavirus tester ADL Health last month.
I think this stock has a bright outlook, even if extreme competition in the Covid-19 testing space could pose problems.
I think gold miner Petropavlovsk is a perfect penny stock for these uncertain times. Prices of the yellow precious metal hit record peaks above $2,050 per ounce last August as the pandemic was in full swing. And it’s started moving higher again following news of the B.1.1.529 coronavirus variant.
Even if the mutation fails to derail the global economy, I’m confident that gold should still rise as roaring inflation will bolster gold demand. However, bear in mind that safe-haven buying of the US dollar could pose a danger to precious metal values. A rising greenback makes it less cost effective to invest in dollar-denominated gold.
#3: Finsbury Food
I also think baker Finsbury Food Group could prove a solid buy as food spending remains broadly stable, even if broader economic conditions worsen. This is even though demand for the company’s cakes, breads and other morning goods from the hospitality sector could sink if mass lockdowns are resurrected.
I also like Finsbury Food because sales are growing in its overseas territories at rapid pace. Latest financials showed revenues rose 8.3% in the four months to October, driven in part by a “very strong” performance from its non-UK operations.
#4: Angling Direct
Purchasing shares in non-essential retailers can be a dangerous business when the economic outlook is uncertain. However, I think Angling Direct could prove a lucrative purchase even if the Covid-19 crisis worsens. The popularity of fishing has been ballooning in recent years. And sales of rods, bait and the like were particularly strong in 2020 as people took up the hobby during lockdowns.
I think Angling Direct’s huge investment could also pay off handsomely as the e-commerce boom continues. I’m aware, though, that revenues could suffer if broader consumer spending power sinks.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.