3 penny stocks to target a 19% annual return
Investing in penny stocks can be an excellent way to target long-term wealth, as the enormous returns of many UK small-cap shares show.
Owning penny shares comes with greater risk than, say, holding FTSE 100 and FTSE 250 stocks. But the huge returns on offer make them worth consideration from confident investors. Take the examples of Panthera Resources (LSE:PAT), Logistics Development Group, and Brave Bison Group.
These UK stocks have delivered an average annual return of 19% since November 2020. And I believe they could continue delivering spectacular profits for shareholders. Here’s why.
Gold star
Panthera Resources — which searches for and develops gold projects in India and West Africa — has been swept higher in 2025 by strong exploration results. At 23.2p per share, it’s delivered an average yearly return of 23% over five years.
Investing in early-stage miners like this can be especially risky. Costs can balloon, putting stress on what can be already-stretched balance sheets. They can also be subject to regulatory issues in various countries.
In fact, Panthera has this year launched a $1.58bn case against the Indian government for stalling development of its Bhukia gold project.
But as we’ve seen, the rewards can also be gigantic if drilling work reveals enormous potential payloads. Studies at Panthera’s Kalaka mine in Mali have revealed a 3m ounce exploration target in a very promising gold region.
This gold stock is a high-risk bet. But given its excellent operational progress and the robust long-term outlook for gold prices, I think it’s worth a close look.
Moving higher
Logistics Development Group has delivered an average annual return of 11.5% since November 2020. During that time it’s changed its name from Eddie Stobart, but has retained its focus on the logistics market.
The assets it invests in range from warehousing and transportation to e-commerce. Its largest holding today is Finsbury Food, though other notable investments include Alliance Pharma — which distributes drugs and medical products — delivery company APC, and digital commerce specialist SQLI.
LDG has exposure to both cyclical and non-cyclical sectors. It’s a mix that leaves it somewhat vulnerable to economic downturns.
Yet at current prices I think it’s a top value stock to consider. At 14p, it trades at a whopping discount to its net asset value (NAV) per share of 26.7p (as of June).
32.4% return
Brave Bison creates, distributes and monetises online video content. It’s delivered a stunning 32.4% average annual return over the last five years, and has been active on the acquisition front to keep outperforming.
The company has made a whopping five acquisitions in the year to date. This includes the potentially transformative purchase of MiniMBA, which provides marketing training and services to blue-chip companies like McDonalds and Google.
Following these acquisitions, Brave Bison’s revenues rose 19% between January and June. This prompted it to lift earnings forecasts for next year. I’m confident these moves to expand and improve its services will pay off handsomely long term.
The penny stock’s profits could well disappoint should the broader advertising industry turn lower. But on balance, I’m confident it can keep providing excellent returns over time. It trades at 23.6p per share.
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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.
