UK small-cap stocks, especially AIM-listed shares, often get overlooked by investors. But there are some great small-caps to buy now, I feel. While these companies carry a higher degree of risk than FTSE 100 stocks, they also have the potential to deliver great returns.
Here are two UK small-cap stocks I would go so far as to say are among the best shares to buy now for my portfolio.
#1 – Covid-19 treatment
Rather than focus on large pharma companies, I reckon Synairgen (LSE: SNG) shares could be a good pick for me. What makes this small-cap stock different is that it’s developing a Covid-19 treatment, called SNG001, rather than a vaccine.
What does this mean? Well, if anyone is hospitalised due to Covid-19, a vaccine wouldn’t work. Instead SNG001 has the potential to treat the illness.
Synairgen shares have had a good run and the stock is riding high on the back of momentum caused by hopes of a recovery from the global pandemic. Over the past few months, the company has also announced positive news.
In December, Synairgen said the US regulator, the FDA, had granted SNG001 fast track status. Last month, the company reported that the first UK patient had been given the SNG001 treatment as part of its global Phase III trial for hospitalised Covid-19 patients. While there’s no guarantee of the treatment being successful in the third phase, I’m optimistic of the results generated so far. It’s also testing SNG001 on patients who are suffering with Covid-19 at home and don’t require hospitalisation.
I should emphasise that Synairgen is still a small company and there’s a high level of risk when investing. SNG001 may still be unsuccessful and may not get regulatory approval.
#2 – Gold miner
I think Greatland Gold (LSE: GGP) could be also be one of the best shares to buy now. The company mines for gold and copper in Australia. It currently has six projects, four are in Western Australia and two in Tasmania.
Greatland Gold’s Havieron deposit, which is a joint venture with Newcrest, is the jewel in its crown. The miner has released a series of successful drilling results from this deposit. While it’s still early days, Havieron demonstrates the potential for a large, underground mining operation.
Greatland Gold shares are not without risk. The company is still a small loss-making one. The stock has recently fallen back after initial drilling at another site, Scallywag, didn’t display the same level of success as Havieron. I think investors were expecting Havieron’s drilling success to continue at all of Greatland Gold’s sites. Unfortunately this isn’t the case. This is why the Greatland explores many sites and learns from the unsuccessful ones. The share price fall was a reality check to many investors.
Despite this, I reckon Greatland Gold’s partnership with Newcrest allows it to share the costly business of mining. I think it’s a step in the right direct for a small miner.
Why are these stocks the best shares to buy now?
Synairgen and Greatland Gold shares don’t come without their risks but I think they have the potential to deliver. Hence I’ll will be adding both of these stocks to my diversified portfolio.
Nadia Yaqub 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.