The five best penny stocks this week posted big gains for investors, with the No.1 penny stock rising nearly 700%.
Every week, I roll out a new list of the top penny stocks. I detail why these penny stocks performed so well and give readers a brief overview of their companies.
I'll get to this top penny stocks list in just a moment. But first, let's look at two of the best tips for trading penny stocks. These tips will help you avoid scam or shell companies that want to steal your money.
You'll find the best penny stocks to buy on the Nasdaq or NYSE MKT exchanges. While penny stocks listed on these exchanges don't necessarily trade for pennies per share, they do trade for less than $5.
And the small premium you'll pay for penny stocks on the Nasdaq or NYSE MKT is worth it. These exchanges have stricter requirements for penny stocks than those trading Over-the-Counter or on the Pink Sheets.
For example, the Nasdaq requires listed companies to have assets totaling at least $80 million, along with other tough conditions.
And one of the requirements for companies on the NYSE MKT (an exchange for micro- and small-cap companies) is to have at least $750,000 in revenue in two of the last three fiscal years.
While being listed on a reputable exchange is important, the best way you can vet penny stocks is to look at their companies' annual filings.
You can find these listed on the U.S. Securities and Exchange Commission website. Look for a company's 10-K form to analyze its annual performance. It will tell you all you need to know about that company's earnings, assets, and liabilities. A 10-K form will also tell you whether a company has taken on too much debt, making it a poor long-term investment.
Now that we've looked at two of the top penny stock trading tips, here are the five best-performing penny stocks this week, including one with gains over 700%...
The 5 Best-Performing Penny Stocks This Week
Best Penny Stock No. 5: EnSync Inc. (NYSEMKT: ESNC) develops energy management systems for the utility and industrial sector. The company's management systems focus on transitioning from coal to more renewable energy sources. ESNC stock jumped nearly 40% this week from $0.27 to $0.37 per share on Thursday intraday after the company reported its earnings on May 11. EnSync beat analysts' expectations of $0.09 earnings per share by $0.01. In its earnings call, EnSync also said it expects government regulations of clean energy to be favorable in the future, which it predicts will boost the company's future growth. ESNC stock is down 2.61% year to date.
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Best Penny Stocks No. 4: Towerstream Corp. (Nasdaq: TWER) is a rooftop tower company. The company provides wireless services to major U.S. cities, like Boston, Chicago, and New York City. TWER stock was trading up 60% this week after it reported its first-quarter earnings on May 16. While its revenue declined and its costs rose, Towerstream management said it was committed to improving its financial performance in several years. TWER stock is currently trading at $0.27 per share as of Thursday intraday and is down 26% year to date.
Best Penny Stocks No. 3: Nanosphere Inc. (Nasdaq: NSPH) is a medical diagnostics company that develops tests to detect deadly diseases in patients before they become life-threatening. NSPH stock rose nearly 70% this week after its competitor, Luminex Corp. (Nasdaq: LMNX), posted a bid for Nanosphere. As a part of the deal, Luminex would assume around $25 million on NSPH's debt. NSPH stock is currently trading at $1.32 per share as of Thursday intraday and is up 114% year to date.
Best Penny Stocks No. 2: Petroquest Energy Inc. (NYSE: PQ) is an oil and gas company that has over 60 exploratory and development wells. PQ stock rose nearly 217% this week, although there appeared to be no catalyst for PQ stock's rise, other than general speculation. PQ stock is trading at $2.47 per share as of Thursday intraday and is up 396% year to date.
Best Penny Stocks No. 1: MGT Capital Investments Inc. (NYSEMKT: MGT) is a holding company that manages and acquires online gaming and casino websites, like FantastySportsLive.com and DraftDay.com. MGT stock surged over 700% this week as investors reacted to news of its new CEO, antivirus software legend John McAfee. McAfee announced he'd be joining the company on May 10. With McAfee's help, MGT plans to transition into the cybersecurity industry. The company also announced it's changing its name to John McAfee Global Technologies. MGT stock is currently trading at $2.93 per share as of Thursday intraday and is up 1,169% year to date.
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