Rockhopper and Empire Metals: the best UK penny stocks to buy today?

British Pennies on a Pound Note

When we look for penny stocks, we hope to find ones that won’t remain as penny stocks for too long.

At 10.5p per share, Rockhopper Exploration (LSE: RKH) still has some way to go. But if the price carries on the way it has over the past few years, we could see some nice gains.

We’re looking at a 55% fall in the past five years, though that does cover the pandemic. But since the lows of late 2020, Rockhopper shares have doubled.

Oil price

The rising oil price will be partly behind the Rockhopper share price rise. And it does show one thing that I’ve been convinced of for some time.

Everyone’s talking about renewable energy, and how it’s going to completely replace fossil fuels some day. But I reckon it’ll surely take a lot longer than people might think. It’s a long-term risk.

The main attraction has to be the size of Rockhopper’s potential resources. In September last year, the firm estimated its peak production volume at around 80,000 barrels per day. And that’s with costs of under $30 per barrel.

Still risky

The company seems to have a decent amount of cash, though there’s no actual profit yet.

Now, if oil should fall closer to that $30 again, Rockhopper could be in trouble. And it did fall way below that in 2020, remember.

But I’m keeping my eye on Rockhopper this year, and I think it could be a good one. FY 2023 results should be with us in April or May.

Soaring share price

The Empire Metals (LSE: EEE) share price took off like a rocket in late 2023, meaning it’s up more than 500% in the past 12 months.

It’s been way higher in the past, though. So it’s clearly made it to the penny stock ranks by starting off well and then hitting hard times.

Still, at today’s 11p price, the shares have nearly doubled in the past five years. So, are we in for a growth stock rebound here?

What does it do?

Empire digs for a number of metals, including copper, gold, and what it describes as other high-value minerals.

Copper prices seem to be holding up. And there’s big demand for all sorts of rare metals these days.

But the big excitement is Empire’s 2023 titanium discovery. In November, the firm announced a big find in Australia, including a good depth of high-grade titanium dioxide.

What’s the risk here?

That sounds good, but investors do face some risks.

For one thing, Empire is still making losses — of £1.04m in the first half of 2023. At the time, it had £1.4m in cash and equivalents on the books.

It has, though, achieved that reasonably healthy position thanks to new share issues. This means we face a risk of dilution if we buy now.

Still, with titanium in such critical demand, I think the firm’s market cap of just £70m does not look stretching. I think this could be another to watch in 2024.

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Alan Oscroft 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.