4 ‘almost’ penny stocks I’d buy in an ISA

A pile of British one penny coins on a white background.

These UK shares all trade just above UK penny stock terrain of £1 and below. Here’s why I’d buy them for my Stocks and Shares ISA.

A green (almost) penny stock

Accelerating action by lawmakers to combat the climate crisis naturally bodes well for companies involved in renewable energy. One such UK share that could deliver delicious investor returns on the back of this is Octopus Renewables Infrastructure Trust.

This green stock owns wind and solar power assets in the UK, France and Sweden. And in the past year, it’s inked conditional agreements to buy solar farms in Spain and Ireland. I’d buy this low-cost stock (which trades at 110p) even though the intermittent nature of green energy could have negative implications for profits.

Legal eagles

DWF Group‘s another ‘nearly’ penny stock I’m a big fan of. This low-cost UK share (which trades at 112p) provides integrated legal and business services spanning a range of industries. Business is booming at the moment thanks, in part, to restructuring which has turbocharged revenues and hacked down costs.

I need to mention the brilliant success of DWF’s acquisition-led growth strategy too, and I’m encouraged that the company’s excellent cash generation will result in lots more of the same. Remember, though, DWF operates in a highly-regulated environment which could threaten performance in some or all of its markets.

No place like Home

Responsible investing, and demand for so-called ESG (environmental, social or governance) stocks, is going from strength to strength. Like Octopus Renewables, a cheap UK share I’m thinking of buying to play this theme is Home REIT.

This ‘almost’ penny stock, which trades at 113p, buys residential properties and leases them to charities, housing associations and other organisations to help alleviate the problem of homelessness. Rough sleeping has exploded in recent years in the UK, and Home REIT is considering raising equity to continue building its asset portfolio to house the growing homeless population.

I think it’s a great buy despite the threat that unexpected risks and liabilities related to acquisitions could hit profits.

Deep impact

Like Home REIT, I believe Impact Healthcare REIT is another great UK property share for me to buy. This borderline penny stock (which trades at 117p) provides residential care homes for the elderly, a market which looks set for explosive growth as Britain’s population rapidly ages.

The Office for National Statistics thinks one in four people will be aged 65 or over by 2050. This compares with one in six in 1999. It’s possible that government funding for this sort of social care will rise following coronavirus too, boosting Impact Healthcare REIT still further.

Though do bear in mind that profits could take a whack if rising labour costs in the wake of Brexit hit its tenants. A large percentage of workers in its homes are from European Union countries. 

The post 4 ‘almost’ penny stocks I’d buy in an ISA appeared first on The Motley Fool UK.

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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.