Do you want to change your life without investing all of your savings? Come check out our picks of the top 10 penny stocks that will give you the best return!
What Are Penny Stocks?
Simply put, they’re shares priced below the $5 range. Since most penny stocks move up and down constantly, they’re considerably riskier than bigger stocks, and investing in them requires the willingness to move your money about quickly.
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You also need to be on the lookout for potential scams, like the infamous ”pump and dump”: a new, cheap share will get promoted aggresively by dubious dealers – typically over the phone or by spam e-mails, and then, once the shares have gone up, the same dealers will sell with great profit, leaving you with a useless heap of shares.
These types of shady business have contributed to the bad reputation that penny stocks now have among many stock investors.
Actually, penny stocks have never had a positive image; it’s not uncommon for stock investors to look down at companies whose shares are priced below $5, and understandably so – after all, a company’s shares are cheap for a reason, right?
OTC and Nasdaq
The important difference you have to have to understand is that between OTC (over-the-counter) trading and stock exchange trading. Many penny stocks are OTC, that is, they are traded directly by dealers. OTC companies are usually highly unstable – most of them never even make it into Nasdaq, because they’ll never get large enough and they’ll never issue enough shares - and such investments are, therefore, very risky. Furthermore, information about OTC companies is very scarce, since they’re not as visible as those listed on Nasdaq or New York Stock Exchange.
Obviously, you don’t want to invest in OTC stocks. Where you want your money to go – and you have to be extra careful – is in penny stocks on Nasdaq or New York Stock Exchange. Any companies whose shares are available on the big stock markets have passed the listing requirements of minimum capital and numer of shares issued. There are plenty of companies whose shares trade below $5 and which are stable enough to offer some good profit.
Choosing The Right Stock
When it comes to choosing where to invest your money, the same broad principles apply as in major stock trading. You have to take into account factors related to the company in which you plan to invest, such as its net profit and its debt load, you have to do some research on recent company expansions, contracts or improvements, and you also have to pay attention to the larger trends in the industry.
At the same time, you have to keep an eye on the company’s evolution on the stock market: take a look at the company’s YTD (year-to-date) performance and see if that’s on the upturn, and pay attention to its recent fluctuations. Keep in mind that penny stocks are pretty volatile, and you need to be on the upswing if you want to make a profit.
Top 10 Penny Stocks To Invest In
We’ve analyzed different data and come up with a list of the best ones to buy that are most likely to make you some good profit. In compiling this list, we’ve looked at different factors: trends in global economy, profit and growth data pertaining to the different companies, business moves and transactions that these companies have undertaken and, last but not least, their stock market history.
Obviously, our recommendation is that you only invest in established stock exchanges; that’s why we’ve chosen our top list from among stocks trading on Nasdaq.
Again, caution is necessary; rather than getting stuck with a lot of shares that may or may not go up, your best bet would be to invest small amounts in more than one company and keep your money moving.
Here Are Our Top Ten Penny Stocks :
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Number 10: Banro Corp (Nasdaq: BAA)
Mining businesses have done great in 2016, with companies such as Coeur Mining ( an unbelievable 517% YTD increase!) shooting out of the penny stock market.
A Canadian gold mining company, Banro has recently announced a record gold production for the second quarter of 2016, and recent profitable business movements mean that it is likely to keep growing in the months to follow. A BAA share is now around $0.4, but it’s gone slightly down over the past week. However, considering the past fluctuations, this may only be temporary. If you invest right now, you might catch an early August rise, and thereby secure a solid profit.
Number 9: CAS Medical Systems Inc (Nasdaq: CASM)
The health-care industry is another sector with significant growth, and some such companies look really promising.
CAS Medical Systems is a developer of non-invasive medical monitoring devices, and its recent deals indicate it as a potential source of serious income for a penny stock investor. CASM currently trades at $1.8 per share, and its shares have been doing great since April. You may secure some profit in the months to follow if you make a move now, but you have to be patient – a slow but stable growth is more likely than a sudden upshoot, and there may be days when its stock may temporarily drop.
Number 8: Asanko Gold Inc (Nasdaq: AKG)
Another successful gold mining company, Asanko has seen a steady rise in gold production in the first half of 2016. This has been mirrored by its stock growth. An AKG share is currently $4.36, and it’s been growing beautifully over the past 2 months. With proper timing, you could secure a steady profit in the following months, since its production is expected to increase: AKG has recently announced that its second quarter production of 36,337 ounces was in line with the 35,000 – 40,000 expectation, with a likely production of 90,000 – 100,000 ounces in the second half of the year.
Number 7: Alexco Resource Corp (Nasdaq: AXU)
This Canadian mining company currently focuses on developing three silver mines in the Keno Hill District of Yukon. Its sustained efforts have resulted in a serious 2016 growth, with an AXU share currently trading at $1.9. As this trend is likely to continue, investing in Alexco shares will probably secure you a solid profit in the near future. Its activity in the ecological mining field and its deals with government and industry clients are also a big sign that this company has the potential to grow considerably, making it one of the safest penny stock companies at the moment.
Number 6: BioScrip Inc (Nasdaq: BIOS)
This healthcare company has recent went through a financial readjustment, with plans to reduce costs significantly. It’s been doing great over the past 6 months and an upward trend is likely to follow. A BIOS share is now $2.56, with a 5-day downturn that will probably be cancelled in the following week. Invest carefully and you may make a profit in the months to follow.
Number 5: Sequenom Inc (Nasdaq: SQNM)
This is a great short-term investment, which could turn out very profitable if you do it right.
Sequenom is a health-care company specializing in genetic tests and research. It has recently announced a significant enhancement of one of its non-invasive pre-natal genetic tests. More importantly, it will soon be bought by LabCorp, which means that SQNM shares are likely to increase as a result of this transaction. You might want to invest in SQNM right now, since it’s likely to generate a quick profit.
Number 4: Zix Corporation (Nasdq: ZIXI)
An e-mail encrypton and data protection provider, this company work with a quarter of US banks and 20% of US hospitals, making it one of the most stable penny stock companies around. Its shares have grown considerably during the last month, and this trend is likely to keep going. A ZIXI share is roughly $4 right now. You might want to invest in it right away, as the upward trend may continue in the near future.
Number 3: STMicroelectronics NV (Nasdaq: STM)
One of the four chip-makers in the auto business, this company is bound to profit from the current self-driving auto industry growth. It had some serious ups and down over the past three months, but it’s been on a serious upward trend recently. Its shares are currently trading at around $5, with an increase of roughly $2 from July 1, and our predictions are that they may break out of the penny stock zone in the months to follow. If you play it smart, STM could potentially make you a good profit.
Number 2: Hecla Mining Company (Nasdaq: HL)
This company is the largest primary-silver producer in the US, and it’s been growing steadily over the past ten years. It’s reported record productions constantly, and it’s investments in exploration mean that it is likely to keep this upward trend.
A HL share is currently $4.49, and by the looks of the past 6 months, there’s no indication that it is likely to go down. You might want to buy some HL share right now, as they’re likely to go up in the months to come.
Number 1: Clean Diesel Technology (Nasdq: CDTI)
This company, which offers advanced emission control technology, has seen a sharp rise above the resistance level over the past week, its shares tripling by comparison with the third quarter of July. This is probably due to the news of its recent partnership with Honda for the new Accord Hybrid model.
CDTI’s upward trend is very likely to keep rising, so you might as well invest in it right now. Considering that it is only in its early stages, and taking into account the fact that last year’s share prices were as high as $10.5, it’s not unlikely that a heavy, even dramatic growth is likely to follow. A CDTI share is $3.7, with a constant increase over the past 5 days.
If you’re looking to make a steady profit with a small amount of money, one of your best bets would be to invest in penny stocks. Relatively small sums (in the $1000 – $5000 range) could secure you a stable starting point, provided that you don’t place them all in one stock. Doing that is likely to get you stuck with unsellable shares, and you want to avoid that at all costs.
To maximize your chances, you should be prepared to do a decent amount of research, looking at a company’s profit and debt, its business transactions and its trading history. Making an informed choice is the only way to ensure that you stay on top of your losses.
Most importantly, you should avoid OTC investing, since they are extremely risky and you might get scammed. Pick a solid stock exchange like Nasdaq or New York Stock Exchange – that’s the only way to avoid tragic losses caused by unproductive companies.
Finally, you can use our list of top 10 penny stocks to invest in as a rough guide as to where your money might best be placed right now. While the research behind this list is serious and thorough, there is no guarantee against unexpected stock moves, such as a dramatic share drop. That’s why doing your own research is very important; a company that’s doing great today could do terribly tomorrow, if one of its trademark products is cancelled or if one of its deals fails. However, we’ve tried to pick relatively stable, trustworthy companies, that are likely to earn you some good money. Remember, stay informed and keep your money flowing!