Best Penny Stocks to Watch This Week (May 29 - June 5)

These are the 10 best penny stocks to watch this week, because they've all posted gains of at least 21% in the last seven days (May 29 to June 5)...

Penny Stock Current Share Price Weekly Return (May 29 - June 5)
Liniu Technology Group (Nasdaq: LINU) $0.37 +75.4%
Inventergy Global Inc. (Nasdaq: INVT) $0.23 +46.9%
ChinaCache International Holdings Ltd. (Nasdaq: CCIH) $1.37 +42.6%
SuperCom Ltd. (Nasdaq: SPCB) $3.03 +33.6%
PAVmed Inc. (Nasdaq: PAVM) $4.75 +28.9%
Adamis Pharmaceuticals Corp. (Nasdaq: ADMP) $4.69 +26.8%
Wowo Ltd. (Nasdaq ADR: JMU) $2.12 +25.4%
Luby's Inc. (NYSE: LUB) $3.15 +25%
Cumulus Media Inc. (Nasdaq: CMLS) $0.50 +24.7%
TrovaGene Inc. (Nasdaq: TROV) $0.79 +21.9%

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The top penny stock of the week is Liniu Technology Group. Shares of the Chinese agricultural services company have surged 75.4% to $0.37 over the last week mostly due to its Q1 2017 earnings report released on Wednesday, May 31. Liniu posted a loss of $0.01 per share - up from a loss of $0.06 per share during the year-ago quarter. This sent the LINU stock price up 65.9% on Wednesday alone.

However, we don't recommend investing in any of the penny stocks listed above. Since they've all posted big double-digit gains, it could be risky to buy shares now if they've already peaked.

best penny stocks to watchAdditionally, investors should know that penny stock investing is inherently risky. Companies listed on over-the-counter (OTC) exchanges or on the pink sheets aren't regulated as closely as the major exchanges. That means they're capable of being downright fraudulent and cheating investors out of their money.

It's important to research a company's financials to see if they're a legitimate and well-run business worthy of your investment. But conducting this research is usually an arduous task that requires going through long, dense 10-K reports and quarterly filings.

That's why we do the research for you here at Money Morning. And Money Morning Small-Cap Specialist Sid Riggs recommends buying shares of one small-cap company in the financial tech - or "fintech" - sector.

Since first recommending it on April 19, this stock has gained 16.9% to just over $8 a share. And analysts say it could return as much as 34.5% by June 2018.

Here's Sid's pick...

One of the Best Small-Cap Stocks to Buy for 34.5% Profit

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Sid recommends Mitek Systems Inc. (Nasdaq: MITK) as a great way to make money from the exploding fintech sector.

You see, the market for mobile financial transactions is growing at an incredible pace. It's projected to expand by 716% over the next four years, with total combined revenue for the tech firms designing the transaction software rising to over $865 billion.

And Mitek is perfectly positioned to dominate that market. The company offers sophisticated identity verification software and services that let you do things like pay insurance or deposit checks over your phone. Some of its services are Mobile Docs, used for scanning documents, and Mobile Verify, used for validating personal identifications.

Its ID services, combined with its mobile banking services, will be a big reason why Mitek keeps growing over the long term.

"The company is already the world leader in mobile capture and identity verification, so it has a huge first-mover advantage over its competition," Sid said. "It's no surprise, then, that its top line nearly doubled over the last two years."

Mitek's earnings have made a big turnaround over the last three years. Its net income swung from a $5.3 million loss in 2014 to a profit of $1.9 million for the full year 2016. In fact, the company posted income of $1.2 million in Q1 2017 - up a massive 109% from the same quarter in 2016.

Analysts don't see that earnings growth slowing down anytime soon. Five analysts surveyed by Thomson Reuters project Mitek to earn an average earnings per share (EPS) of $0.29 this year. That would be over four times the $0.06 EPS earned in 2016.

Those same analysts see the MITK stock price rising to as much as $11 in 12 months. That would be a generous 34.5% return for investors who buy in now at $8.18.

With a strong foot in the mobile transaction sector and growing earnings, Mitek is one of the best small-cap investments to make this year.

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Alex McGuire writes about penny stocks for Money Morning. Follow him on Twitter for the biggest penny stock news and updates.

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