The list below shows the 10 top penny stock gainers to watch in August 2017, based on the top performers of July 2017. And after the chart, we'll show you one of the best small-cap stocks to invest in this year...
|Penny Stock||Current Stock Price||July 2017 Return (as of July 24)|
|Daré Bioscience Inc. (Nasdaq: DARE)||$5.06||+1,039.6%|
|Aeterna Zentaris Inc. (Nasdaq: AEZS)||$2.30||+130%|
|AcelRx Pharmaceuticals Inc. (Nasdaq: ACRX)||$3.65||+69.8%|
|TearLab Corp. (Nasdaq: TEAR)||$2.83||+69.5%|
|Verastem Inc. (Nasdaq: VSTM)||$3.67||+68.3%|
|Sito Mobile Ltd. (Nasdaq: SITO)||$6.01||+62%|
|XG Technology Inc. (Nasdaq: XGTI)||$2.54||+55.8%|
|Monster Digital Inc. (Nasdaq: MSDI)||$0.75||+54.2%|
|Bon-Ton Stores Inc. (Nasdaq: BONT)||$0.65||+48.6%|
|Capricor Therapeutics Inc. (Nasdaq: CAPR)||$1.12||+35%|
The top penny stock of July 2017 is Daré Bioscience, which has exploded 1,039.6% this month and soared 809% on July 20 alone, when it rose from $0.66 to $6 per share. DARE's quadruple-digit return this month comes after the firm completed a merger with cancer drug developer Cerulean Pharma Inc. (Nasdaq: CERU)...
Back in March, Cerulean agreed to sell itself to Daré for $7.5 million and lay off 11 of the 19 Cerulean employees. The deal finally closed on July 20, and the newly combined company will retain the name Daré Biosciences Inc. and the ticker DARE.
Anyone who owned shares of DARE stock before market close on July 19 became owners of approximately 51% of outstanding Cerulean shares. This news significantly spiked demand for DARE stock, sending it up a stunning 809% from $0.66 to $6 on July 20.
But while the 1,039.6% gain earned by DARE stock this month may be attractive, we don't advise investing in that or any of the other penny stock gainers listed above. Since they've already seen gains in July, August might not be the best time to buy them. They might already be trading at inflated prices.
Buying penny stocks like these that have been ripping higher all month can be risky for investors who haven't done their homework. When looking for profitable penny stocks, conducting research into 10-K documents - which outline a firm's annual revenue, profits, and executive compensation - and quarterly earnings reports is crucial to making sure they're legitimate and profitable.
But Money Morning Small-Cap Specialist Sid Riggs prefers to do the intensive research for you...
Although many of his small-cap recommendations cost slightly more than the typical penny stock cutoff of $5, they cost more for a reason. They have bigger market caps, between $300 million and $2 billion, meaning they're more financially stable than penny stocks, which typically have market caps below $300 million.
And Sid - whose recommendation from April 19 has given investors a 41.3% return since then - is recommending another top small-cap stock to buy in 2017. It's a biotech company with a strong track record of U.S. Food and Drug Administration (FDA) approval for its products. Three drugs were approved from 2010 to 2012, with one being the first of its kind sold over the counter and not requiring a doctor's prescription.
But even more impressive is this firm's incredible stretch of earnings beats. It's surpassed analyst expectations by an average of 57.6% in its last four quarterly earnings reports. According to Sid, that's a sign the big Wall Street banks underestimate the company's growth prospects, making now a great time to buy in before Wall Street catches on.
Here's our best small-cap stock to buy right now...
The Best Small-Cap Stock to Buy in 2017
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The pick is OraSure Technologies Inc. (Nasdaq: OSUR), which develops medical devices that detect conditions like HCV, HIV, and influenza. The company also sells drug-screening products that can detect narcotics or alcohol in a person's system.
But OraSure's most popular products include its line of portable cryosurgical devices. These let people apply intense cold to lesions, warts, and other spots on the skin to remove the unwanted or infected tissue.
The company has seen a number of its products quickly receive FDA approval in recent years. In 2010 and 2011, the FDA approved OraSure's blood and fingerstick HCV tests, respectively. And in 2012, the company received FDA approval for its in-home HIV test.
According to the OraSure website, it's the first oral fluid over-the-counter HIV test approved in the United States. That ability to stay ahead of competitors will continue to be a long-term boost to OraSure stock.
In fact, its ability to outperform the market is already showing this year. The OSUR stock price has soared 112.2% so far in 2017, decimating the Dow Jones' 8.9% gain and the Nasdaq Biotechnology Index's 23.7% return. And Sid expects those gains to keep coming as the firm continues to stay ahead of the competition.
The stock has also blown through Thomson Reuters analysts' previous one-year price target of $16 that they estimated back in June, with OSUR currently trading at $18.63.
Now, those same analysts are raising their price target, and they predict OSUR stock will rise 12.7% to $21 by July 2018.
However, the company keeps growing while analysts keep underrating it, and that means it's a value buy right now...
Since Q2 2016, OraSure has smashed earnings estimates by an average of 57.6%. During the last quarter of 2016, the firm posted $0.13 per share, exceeding the $0.05 analyst estimate by 160%. It kept that streak going in Q1 2017, when it earned $0.21 per share and beat the $0.18 projection.
"That tells me analysts have almost perennially underestimated the company's potential - something they won't do for long," Sid said. "Which is why you don't want to delay for a New York minute if you're as interested as I am."
The Bottom Line: Although the top penny stocks listed above have surged as much as 1,065.1% in July, we still don't advise investing in any of them in August. They've already posted impressive returns, meaning they could leave with you losses if you buy in at these high prices. Instead, Sid recommends buying OSUR stock for a minimum gain of 12.7%, per Thomson Reuters analysts' current forecast. The company's revolutionary at-home HIV test and consistent smashing of analyst expectations make it an investment that could very well outperform the current 12.7% return projection.
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