10 Top Penny Stocks to Watch in October 2017 Include This 440.2% Gainer

The following list shows the 10 top penny stocks to watch in October 2017, including the biggest gainers of September. Each penny stock has rallied at least 92.7% this month, with the top performer gaining a whopping 440.2%.

For investors looking for future gainers, we'll also show you one of the best small-cap stocks to buy before 2018...

Top Penny Stock Current Share Price September 2017 Gain (as of Sept. 25)
ITUS Corp.

(Nasdaq: ITUS)

$3.67 +440.2%
Helios and Matheson Analytics Inc.

(Nasdaq: HMNY)

$8.40 +190.6%
Net Element International Inc.

(Nasdaq: NETE)

$0.63 +129.1%
Capricor Therapeutics Inc.

(Nasdaq: CAPR)

$2.32 +128.4%
Aradigm Corp.

(Nasdaq: ARDM)

$3.04 +127.6%
Neovasc Inc.

(Nasdaq: NVCN)

$1.71 +116.5%
Seadrill Ltd.


$0.39 +106.2%
ZAIS Group Holdings Inc.

(Nasdaq: ZAIS)

$3.73 +101.6%
CASI Pharmaceuticals Inc.

(Nasdaq: CASI)

$1.88 +95.8%
Pengrowth Energy Corp.


$1.17 +92.7%

top penny stocks to watch in October 2017The top penny stock to watch next month is ITUS Corp., which develops a tumor detection platform called Cchek. ITUS stock is up 440.2% from $0.67 at the Aug. 31 close to $3.67 today (Monday, Sept. 25).

The bulk of that rally has come over the last week following the firm's Sept. 18 announcement of a patent issued on its Cchek technology. Shares have surged 431.9% since the announcement because Cchek should give ITUS an edge over similar cancer-detection biotechs like Grail.

Cchek is unique in that its cancer detection product is based in flow cytometry. This is a fancy way of saying the test measures blood cells and components with a laser. By patenting the test, ITUS ensures competitors won't be able to create similar platforms that could steal ITUS' customers.

ITUS' 440.2% gain isn't the only reason to watch the stock in October. The share price could keep swinging as trading volumes remain at record highs. Today's volume is 12.8 million shares - or 967% above the average volume of 1.2 million. The stock will likely continue seeing high volume as investors continue to react to the big patent news.

Although ITUS' September rally makes the stock look enticing, we don't recommend buying into that - or any of the top penny stocks on the list - right now. They've already seen gains of at least 92.7%, and our experts only recommend stocks with bullish potential ahead of them.

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Money Morning Small-Cap Specialist Sid Riggs has one for our members today...

Sid's picks include winners like Neurocrine Biosciences Inc. (Nasdaq: NBIX). That recommendation has netted readers a 532.6% return since December 2013, beating the Dow Jones's 39.1% gain over the same time.

And today's company will directly benefit from the Chinese car market, which is becoming one of the world's fastest-growing markets. Chinese auto sales grew 45% between 2013 and 2016, beating U.S. and EU sales of 12.5% and 22.9%, respectively. Car ownership in the country reached 172 million in 2015 - more than half the total U.S. population of 320.9 million.

According to Sid, this stock could climb as China's car market undergoes a change in the way customers pay for cars.

Here's his pick...

This Small-Cap Stock Could Surge from the Booming Chinese Auto Market

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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, rising 4.2%, 193.5%, and 4.3% year over year in Q1 2017 respectively.

Another catalyst is 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 biggest catalyst for Bitauto stock in 2017 and 2018 will be its financing operation...

You see, Chinese consumers have historically used cash to buy cars, 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 it a huge first-mover advantage to up-and-comers who have yet to build a loyal user base," Sid noted.

The Bottom Line: Despite the top penny stocks of September 2017 seeing gains as huge as 440.2%, we don't advise buying any of them. Instead, Sid recommends buying BITA stock as a long-term hold. The company's bottom line can only expand from here as Chinese car buyers shift away from using cash and move toward financing.

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