10 Biggest Penny Stock Gainers of August 2017 Show Gains of 49.2% in One Week

Today, we've compiled a list of the 10 biggest penny stock gainers of August 2017 so far. After the list, we'll also give you one of the best small-cap stocks to buy this year, courtesy of Money Morning Small-Cap Specialist Sid Riggs...

Penny Stock Share Price August 2017 Gain (as of Aug. 7)
Technical Communications Corp. (Nasdaq: TCCO) $6.19 +49.2%
Pacific Biosciences of California (Nasdaq: PACB) $4.48 +37.4%
Medical Transcription Billing Corp. (Nasdaq: MTBC) $1.69 +30.6%
Westmoreland Resource Partners LP (NYSE: WMLP) $3.19 +29.7%
China Finance Online Co. (Nasdaq ADR: JRJC) $1.79 +26.1%
CareDx Inc. (Nasdaq: CDNA) $1.38 +25.4%
Viewray Inc. (Nasdaq: VRAY) $5.14 +25.2%
DryShips Inc. (Nasdaq: DRYS) $1.35 +25%
Marinus Pharmaceuticals Inc. (Nasdaq: MRNS) $2.33 +24.6%
Ion Geophysical Corp. (NYSE: IO) $4.41 +24.2%

Special Report: Cannabis Is the Gold Rush of the 21st Century - 30 Stocks to Invest in Now. Read more...

The top penny stock of August so far has been Technical Communications Corp., which provides encryption and security services that protect data transmitted between phones, radios, and other devices. Shares of TCCO stock are up 49.2% this month and 17.9% today alone ahead of the firm's Q2 earnings release tomorrow (Tuesday, Aug. 8).

In addition to TCCO's 49.2% return, every other penny stock on the list has gained at least 24.2% so far this month. These double-digit gains over the course of just five sessions show why investors are always looking for the next penny stock winner.

biggest penny stock gainers of august 2017While these gains are noteworthy, we don't recommend buying any of the top penny stocks on the list. They've already seen double-digit returns and are trading at inflated prices. Buying in at these high prices now could set you up for a loss.

Investing in penny stocks like these top performers is risky if you don't do the right amount of financial research. Looking at a company's annual 10-K filings - which summarize its revenue, losses, and executive compensation, among other important details - and digging through recent quarterly filings is paramount to making sure the company is healthy enough to invest in.

However, we know this research can be intense and time-consuming. After all, 10-K filings can be over 75 pages long. For example, the 2016 10-K submitted by Pacific Biosciences of California - the second best-performing penny stock of August so far - was 77 pages long.

That's why Sid does this research for you and gives you his picks for the best small-cap stocks to buy...

Today's recommendation is a direct play on one of the fastest-growing markets in the world - the Chinese auto market. From 2013 to 2016, China's auto sales surged 45%. That crushed sales from the United States and European Union, which only increased 12.45% and 22.9%, respectively, over the same period.

Here's Sid's newest recommendation...

One of the Best Small-Cap Stocks to Buy in 2017

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

Sid's small-cap pick today is Bitauto Holdings Ltd. (NYSE ADR: BITA), which provides marketing, Internet content, and other advertising services to Chinese automakers and automobile customers.

The company has its hands in three of the country's biggest non-manufacturing-related auto segments: advertising/subscriptions, transaction services, and digital marketing. All three sectors have been growing this year, with each rising 4.2%, 193.5%, and 4.3% year-over-year in Q1 2017.

One of the biggest reasons Sid is bullish on BITA stock is the firm's presence in China's growing auto industry. The country sold 23.7 million automobiles last year, surpassing U.S. sales of 17.5 million by 35.4%.

And China's growing sales have been attributed to the rapid rise of the country's middle-class population.

"China's middle class is expected to reach 550 million people in five years," Sid said. "By comparison, the U.S. middle class clocks in at 120.8 million people."

"Just like you and me, they want everything we already have (and take for granted), especially automobiles, which are seen as a huge status symbol associated with success."

But the real catalyst for Bitauto stock in 2017 will be its financing operation...

You see, Chinese consumers have historically used cash to buy not just cars but also real estate and other properties. In 2014, then-Vice President of Ford Motor Co. (NYSE: F) David Schoch said in a conference call that about 80% of all Ford buyers in China used cash and only 20% financed their cars. Similarly, the National Association of Realtors said Chinese buyers paid entirely in cash in 71% of all U.S. real estate deals.

However, these consumers have been shifting toward financing their cars in recent years. And according to Deloitte, 50% of all auto purchases in China will be financed by 2020.

This trend will be huge for Bitauto's transaction services business, which as I mentioned is already seeing explosive year-over-year growth of 193.5%. Not to mention that particular business just received $1 billion in funding from three Chinese Internet companies. These include Tencent Holdings Ltd., JD.com Inc. (Nasdaq ADR: JD), and Baidu Inc. (Nasdaq ADR: BIDU).

"BITA's presence as a trusted company for car financing and transactions gives them a huge first-mover advantage to up-and-comers who have yet to build a loyal user base," Sid noted.

Analysts from Thomson Reuters predict BITA stock will rise 18.2% from today's price of $37.39 to $44.19 by August 2018. However, Sid believes it could post much bigger returns than that, as China's auto market continues to explode and Bitauto's transaction business expands from the rising number of consumers opting to finance their vehicles.

The Bottom Line: With the biggest penny stock gainers seeing returns as high as 49.2% in just the first week of August, it's easy to see why penny stocks are attractive investments. However, we don't recommend buying into any of the stocks on our list. Instead, we recommend Bitauto stock as one of the best small-cap companies to invest in this year. The firm's presence in the rapidly expanding Chinese auto sector and strong transactions business set it up for a minimum return of 18.2% over the next 12 months.

Want to Invest in Weed and Don't Know Where to Start? Well over half of the country already has marijuana legally available in some form. Eight states plus our nation's capital have made it completely legal to anyone over the age of 21. And the marijuana stock market is preparing to take off. Watch this short video and see whether jumping on this moon-bound stock rocket is right for you.

Related Articles: