Penny stocks can be volatile investments. But investors who get it right can open the door to spectacular long-term returns.
Here are two top small-cap shares I’m hoping to buy for my Stocks and Shares ISA when I have cash to invest.
1. Angle
Rising healthcare investment across the globe provides excellent growth opportunities for medical stocks. Angle (LSE:AGL) is one such company on my radar today.
The penny stock is a liquid biopsy company that helps doctors diagnose cancers. And today its patented Parsortix technology is the only one currently cleared by the US Food and Drug Administration for the capture and harvest of living cancer cells from metastatic breast cancer patient blood for analysis.
You may have seen Angle’s share price spike recently. It surged after the company released excellent clinical results from its DNA molecular analysis of blood samples using Parsortix.
The study — which looked at blood samples from patients with breast, lung, and ovarian cancers — identified DNA mutations that were not found in other types of test. Angle said that the study “gives a completely new insight into cancer clonal evolution not currently available to researchers or oncologists”.
The number of cancer cases is tipped to rise steeply in the coming decades. The International Agency for Research on Cancer thinks there will be 28m new cancer cases each year across the globe by 2040. In this climate, Angle could see demand for its technology explode.
The small cap has a history of tapping its shareholders to solve funding issues. And this will remain an ongoing risk moving forwards. But encouragingly Angle says it has enough cash to operate until the second quarter of 2025 following cost-cutting measures. I think it could be a great growth stock to own.
2. Triple Point Energy Transition
Investment trust Gore Street Energy Storage Fund (LSE:GSF) also has tonnes of investment potential, in my view. As its name implies, the business invests its money in assets that will help the world move over from fossil fuels. As a consequence, it provides excellent exposure to the rocketing green economy.
Power generation from renewables like wind, solar, and water is famous for being highly unstable. Modern life relies heavily on a constant supply of electricity, so this can cause significant problems.
This is where Gore Street comes in. Its technology (which is located across Europe and the US) stores energy and releases it when needed, like when sun doesn’t shine and the wind fails to blow. This critical role means demand for its services should rise strongly as renewable energy capacity ramps up.
Gore Street’s share price leapt towards the end of 2023. Yet at current prices of 81p per share, the firm still looks undervalued. Right now it trades at a large discount to the value of its assets (its net asset value currently sits at 111p per share).
The small cap also carries a large 9.1% dividend yield, more that double the 3.8% average for FTSE 100 shares. I think this is a brilliant buy at today’s prices.
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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.
