The top 10 penny stocks of 2014 have seen tremendous gains, one as high as 33,000% since January.
That's why investors hunt for top penny stocks - they have the potential to transform portfolios in a very short period of time.
While some of the top penny stocks on this list have returned incredible gains for their shareholders, not all penny stocks are great investments. There are numerous risks involved with penny stock trading, including illiquidity and shady reporting standards.
For Money Morning readers, we've separated the smart investments from the duds to compile this list of the top 10 penny stocks of 2014.
Here are some of this year's biggest-gaining penny stocks; they've all posted gains of at least 180%...
Med-Cannabis Pharma Inc. (OTCBB: MCPI) has been the biggest penny stock winner of 2014 so far, posting an incredible 33,233% year-to-date gain. Pot penny stocks have seen some huge share-price climbs this year, but MCPI has rewarded shareholders the most.
The case with MCPI is a strange one. The company was formerly known as SW China Imports, and was involved with selling wigs and hairpieces to U.S. retailers. However, in June the company purchased a medical marijuana dispensary company and completely changed its name. From there, the stock skyrocketed from $0.07 a share to a high of $1.14. At the beginning of January, the stock was worth approximately one-fifth of a penny, and now it trades near $0.50.
Investors need to exercise caution when buying penny stocks that trade "Over-the-Counter" (OTC), as they're not subject to the same filing requirements as stocks on the Nasdaq or NYSE. They can return wild gains like MCPI has, but they can also plummet just as quickly. MCPI is also an illiquid stock, averaging just 84,000 shares traded a day. That illiquidity can make it difficult to sell shares once they've been purchased and can leave investors holding the bag if the price drops significantly. This is not the type of penny stock Money Morning would recommend, as it is an extremely risky investment.
First Physicians Capital Group Inc. (OTCMKTS: FPCG) is based in California and provides support staff at several hospitals and medical centers. At the beginning of the year, FPCG traded at fractions of a penny. Currently, it's worth almost $0.50, and has posted a year-to-date gain of 13,991%. While those gains are impressive, FPCG stock is another illiquid stock. The penny stock averages a trading volume of just 1,784 per day, and has a market cap of just $9.7 million, which makes it another risky investment.
Creative Edge Nutrition Inc. (OTCMKTS: FITX) is another OTC stock that makes the list with a gain of 1,194% since January. FITZ markets and sells nutraceuticals and health supplements. FITX has a market cap of $229 million and averages a trading volume of 12.5 million shares. At the beginning of 2014, FITX was trading at fractions of a penny, and now the stock is valued at more than $0.06 each. FITX reached a peak of $0.11 in February, but has traded closer to $0.06 all summer.
While those three top penny stocks posted huge gains in 2014, they are all OTC stocks that carry more risk than most investors are comfortable with. Fortunately for investors, these seven penny stocks below trade on major indexes, and have all had year-to-date gains of at least 183%...
Verso Paper Corp. (NYSE: VRS) develops the paper and paper products that are used in catalogs, magazines, retail inserts, and commercial print. VRS traded at $0.63 per share at the start of 2014 and is now worth $3.20. The stock reached a peak of $5.55 in January. However, investors who bought the penny stock in early January are still sitting on year-to-date gains of 412%.
IsoRay Inc. (NYSE: ISR) develops, manufactures, and sells isotope-based medical products that are used for the treatment of cancer. At the beginning of the year, ISR shares were trading near $0.50 each. Investors who bought the penny stock then have seen gains of 368%, as shares now trade at $2.34. ISR shares actually hit a high of $3.77 in March, at which point investors had banked gains of 654%. IsoRay currently has a market cap of roughly $131 million.
SMTP Inc. (Nasdaq: SMTP) is an IT company that provides services that help facilitate e-mail delivery worldwide. Essentially, SMTP allows companies to outsource their e-email services. As of today, the company has a market cap of just $32 million. At the beginning of 2014, SMTP shares were worth $1.43, but they quickly jumped as high as $10 in January. Shares have settled back down to $6.40 now, which still represents a year-to-date gain of 348%.
RadNet Inc. (Nasdaq: RDNT) is a provider of fixed-site outpatient diagnostic imaging services operating in the United States. Unlike most penny stocks on this list, RDNT saw a gradual increase throughout 2014. Shares of RDNT were trading near $1.67 to start the year, and now are worth $6.92 each. That's a gain of 314%. RDNT has a market cap of $293 million, and the stock has a 52-week high range of $1.50 to $7.67.
Plug Power Inc. (Nasdaq: PLUG) is an alternative energy company that focuses on fuel cell systems used primarily in industrial off-road vehicles. Shares of PLUG were trading at just $0.55 at the beginning of 2014, and hit a high of $11.72 in March. At that point, investors who sold their shares had banked profits of 656%. The penny stock has pared its gains since then, but still has a year-to-date return of 252%. As of today, PLUG shares are trading at $5.47.
Pernix Therapeutics Holdings Inc. (Nasdaq: PTX) is a specialty pharmaceutical company that owns numerous branded and generic pharmaceutical products. Year to date, PTX has brought investors a return of 208% after beginning 2014 at $2.50 per share. Today, PTX is no longer a penny stock as it trades north of $7.75 per share. PTX has a market cap of $292 million. And a 52-week range of $1.68 to $9.56.
Amicus Therapeutics Inc. (Nasdaq: FOLD) is another pharmaceutical company on the list of 2014's top 10 penny stocks. FOLD specializes in small molecule drugs that are used to treat a range of diseases. FOLD shares were trading at $2.35 to start the year, but have climbed to $7.47, a gain of 218%. FOLD is the largest company on this list with a market cap of $577 million. In the last 52-weeks, FOLD stock has a range of $1.76 to $7.52.
LiveDeal Inc. (Nasdaq: LIVE) rounds out the list with a year-to-date gain of 183%. LiveDeal is an online marketing solutions company that began the year trading at $1.33. The penny stock quickly climbed to a high of $11.94 in February, a gain of 798% at the time. The stock has come back to Earth since, and is trading at $3.77 today. It may have pared its gains, but it is still up 183% in 2014. LIVE has a market cap of $53.6 million.
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