I’m searching for great UK shares to buy following recent price dips. Here are three terrific penny stocks that have caught my eye.
Roll with it
Toilet and kitchen roll manufacturer Accrol Holdings (LSE: ACRL) could face a rough ride as rising paper costs hit profits. But it’s my opinion that falling consumer spending power could supercharge demand for its lower-cost private label products and, by extension, profits.
Real wages in the UK are falling at their fastest rate since 2014 because of rocketing inflation, recent data shows. Consumers will have to shop more smartly to make ends meet, which bodes well for Accrol. But the penny stock is not just a great buy for today. The importance of good value to consumers has been rising steadily for more than a decade now.
And Accrol has remained busy on the acquisition front to exploit this opportunity. Recent major acquisitions include Leicester Tissue Company and John Dale.
Penny stock nobility
I’d also consider buying Lords Group (LSE: LORD) following recent share price weakness. Like Accrol, this building materials supplier has also been busy with M&A action to increase its scale. Since the start of 2022 alone, it has spent more than £26.8m to bring builders’ merchant AW Lumb and roofing specialist Advance Roofing Supplies under its wing.
This will give Lords Group better geographic and product coverage and therefore better chances to capitalise on the the booming Repairs, Maintenance and Improvement (RMI) market in the UK. The penny stock has designs on driving revenues to £500m by 2024 (it clocked up sales of £179m in the first six months of 2021, latest financials showed).
Shortages of raw materials are a problem that could push up costs and result in empty shelves at its depots. However, the company’s exciting growth plans still make this an attractive UK share for me right now.
Off to market
In usual times, stocks that have exposure to the housing market are in danger when economic conditions worsen. This is hardly a surprise as a weakening buyer affordability and consumer confidence hits homes demand. So with runaway inflation hurting the domestic economy shares like OnTheMarket (LSE: OTMP) might be considered risky ones to own.
But the reality is that home sales continue to impress despite the worsening economic outlook. A mix of historically-low interest rates and fierce competition among mortgage providers means that borrowing conditions remain extremely favourable. Ongoing government support through Help to Buy also means that market activity remains strong, causing British house prices to continue to rise at breakneck pace.
OnTheMarket allows homebuyers to search for properties through its online platform. And in late 2021, it unveiled a website and brand revamp to help it better take on industry giants like Zoopla and Rightmove. Strong market conditions prompted the penny stock to increase profits expectations in recent months. And I fully expect trading here to remain impressive for the foreseeable future.
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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.