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When looking at the gains of the top 10 penny stocks in March 2014, it's clear why so many people invest in penny stocks.
Penny stocks have the ability to bring triple-digit gains in just days, and the top stocks on this month's list brought in monthly returns of 1,977%, 627%, and 400%.
While the rewards from penny stocks can be huge, so too are the risks. Many penny stocks trade "Over-The-Counter" (OTC) or on the Pink Sheets, meaning they are not subject to the same strict financial filing standards as the New York Stock Exchange (NYSE) or Nasdaq. Also, because penny stocks can be so illiquid, it can be difficult for investors to sell shares.
For investors who added one of these 10 penny stocks to their portfolios in March, the risks were worth it.
Here are the top 10 penny stocks from March 2014.
Top 10 Penny Stocks in March 2014
Canadian Tactical Training Academy Inc. (OTCMKTS: CTTG) is by far the biggest penny stock winner from the month of March, seeing its share price gain an incredible 1,977%. The company is headquartered in Quebec and provides various types of courses including private security, surveillance, and executive protection services. Like many penny stocks that trade OTC, CTTG is extremely illiquid, meaning it is not often traded. On the last day of March, more than 7.9 million shares of CTTG exchanged hands, when most of the month had seen very few CTTG shares traded. At the beginning of March, CTTG was worth a fraction of a penny. Now it's valued at a little more than $0.02. While the stock posted an unbelievable gain in March, those who purchased CTTG will have hard time selling the stock because it is so illiquid. If there isn't another buyer interested, shareholders might now be stuck with CTTG stock without anywhere to unload it.
Bravada Gold Corp. (OTCMKTS: BGAVD) shares shot up 627% in March and now trade at $0.08 per share. Investors looking for strong financial backings in their stock picks would have trouble choosing Bravada, as its market cap is just $179,000. BGAVD is also very illiquid, averaging just 727 shares traded daily. On the last day of the month, more than 27,000 shares were traded, sending the stock price higher.
North American Energy Resources Inc. (OTCMKTS: NAEY) is another illiquid penny stock that posted a serious gain in March, up 400%. At the beginning of the month, NAEY was trading at just $0.01. At the end of March the stock was worth $0.04. Adding three pennies doesn't seem overwhelming, but NAEY shareholders quadrupled their investments. NAEY is an independent oil and gas company that has a market cap under $1 million.
But those weren't the only huge winners in March. These next seven all nearly doubled or tripled their share prices in just one month…