3 penny stocks I’d buy in my ISA in September

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

Here are three penny stocks I’m thinking of buying for my Stocks and Shares ISA in September.

Gold star

The fate of commodities stocks is naturally tied closely to the prices of the raw materials they produce. In the case of penny stock Condor Gold (LSE: CNR) I think there’s plenty to get excited about. It’s not just the prospect of a long and bumpy battle against Covid-19 that could keep gold prices strong. Low central bank rates are likely to remain in place to keep the recovery going, in turn driving fears over runaway inflation.

There’s also the prospect of a sharp decline in the US dollar over the short-to-medium term. This boosts commodity prices as it effectively becomes cheaper to buy dollar-denominated assets.

I’d buy this UK mining share despite the possibility that efforts to get its La India project in Nicaragua to production in the near future could hit trouble. Condor Gold is seeking to produce 100,000 ounces of the yellow metal a year when output eventually commences, with material production increases targeted thereafter.

Bang on the money?

Small loans provider Morses Club (LSE: MCL) might not be everybody’s cup of tea. In fact, with ethical investing becoming more and more popular, the doorstep lender could see demand for its shares steadily sink over the long-term. There’s also the fact that the hostile regulatory environment that has pushed many of its competitors into extinction could eventually bite this penny stock too.

For the time being though, trade is flourishing and from an investment perspective this makes Morses Club worthy of serious attention. Not only is the business benefiting from the demise of its rivals, its huge investment in its digital operations is also paying off handsomely.

The number of customers on its Digital division’s books leapt 80% year-on-year in the five months to July. Moreover, the UK share is also taking steps to ready its traditional home collections business for the digital age. Consequently, 65% of lending in the five-month period was cashless.

A top retail penny stock

The value retail sector is tipped to continue growing strongly over the next decade. And so I think Card Factory (LSE: CARD) — a seller of greetings cards, balloons, wrapping paper and other paraphernalia wheeled out on special occasions — should thrive.

The business sells its products at a vast discount to other cards retailers like WH Smith and Clinton Cards. And this could help it thrive too if the UK economy experiences a tough economic ride following Covid-19 and Brexit.

I also think steps to improve its e-commerce proposition should lift earnings considerably. Indeed, I’m encouraged by the 135%-plus jump in online revenues during the 12 months to January. Remember though, the penny stock faces extreme competition from online bespoke cardmakers Moonpig and Thortful.

The post 3 penny stocks I’d buy in my ISA in September 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 recommended Card Factory. 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.

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