Penny stocks are so attractive thanks to their explosive potential. These stocks trade for just dollars, or even pennies, and can post triple- or even quadruple-digit gains in a matter of days.
Take Marathon Patent Group Inc. (Nasdaq: MARA) for example. Shares of this penny stock soared 341% in just four days during the week of Thanksgiving.
That's why we're bringing readers one of the best penny stocks to watch for December.
While penny stocks can appreciate quickly, they are much riskier than normal stocks. Most penny stocks are listed on over-the-counter exchanges with no requirements for being listed.
As a result, some penny stocks are merely scams relying on pump-and-dump schemes that could quickly drain your entire investment.
However, not ALL penny stocks are scams. Here's the top penny stock gainer from November, which is also one of the best penny stocks to watch for 2018...
Considered to be one of the top penny stocks of December 2017, China Recycling Energy Corp. (Nasdaq: CREG) produced gains of 575.2% in just the first 10 days of November, soaring from $1.17 per share to $7.90. The share price has since dropped back down to $3.25, which gives investors who held on a respectable gain of 177.77% in just three weeks.
CREG is a Chinese producer of energy-saving products such as power generators and turbines. The company's stock skyrocketed 360.6% between Nov. 9 and Nov. 10 based on speculation surrounding U.S. President Donald Trump's newly announced deals with China.
On Nov. 9, Trump was visiting China and announced several major deals, worth $250 billion, involving companies such as Boeing Co. (NYSE: BA) and General Electric Co. (NYSE: GE).
CREG wasn't mentioned in any of these deals, but its trading and share volume were triggered by speculation that the company would somehow benefit from the new business. On Friday alone, 20 million shares changed hands, compared to the stock's average daily volume of 925,000 shares over the prior 30 days.
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Remember, these gains were based on speculation alone and no actual news related to the company. That makes this an extremely risky investment. This is just one of the reasons that we don't recommend buying CREG stock.
The trading of CREG so far in November might have created a windfall from some investors, but it illustrates the volatile nature of penny stocks. While you can make money with penny stocks, they are riskier than their small-cap counterparts, because they are so speculative.
Instead of trying to determine how to find the best penny stocks to buy, a safer strategy is to look for small-cap opportunities that can also produce exceptional gains with less volatility.
This is where Money Morning Small-Cap Specialist Sid Riggs shines with his winning recommendations.
One of Sid's top small-cap stocks to buy now is in the mobile banking industry, expected to soar 716%, to $865 billion, by 2021.
Which is why it's one of the best small-cap stocks to buy right now...
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VASCO Data Security International Inc. (Nasdaq: VDSI) is Sid's number one small-cap stock to take advantage of gains in the mobile banking transactions sector.
VASCO is an Illinois-based company that designs, develops, and markets digital solutions for security, identity verification, and productivity for mobile transactions. The company delivers encryption services for businesses that offer or use mobile banking services.
VASCO's most popular services are its electronic security service and its mobile app security. So far, it has more than 10,000 clients that include multinational banks, healthcare companies, and government agencies. One of its major banking clients is BCR, which is the largest bank in Romania by clientele.
Sid advises investors to check out VASCO's main product, DIGIPASS. The app was launched in May 2016 and is a combined fingerprint, face, and behavioral authentication system.
DIGIPASS can recognize a person's unique facial features, which is just one more layer of security that will keep hackers away from a user's sensitive financial data and protect them from potential identity theft.
Sid isn't the only one who is a fan of DIGIPASS. Leading security publication Info Security Products Guide awarded DIGIPASS with the 2017 Global Excellence Award.
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Digital payments are a massive market, and any company with a niche in the industry is going to have an advantage. According to Juniper Research, the total value of digital payments today is $3.85 trillion, and that figure is expected to increase 14% in the coming year, to $3.9 trillion.
Consumers are using fewer checks every year and are instead opting to use online transfers and mobile devices for payments. Digital payments are seeing major growth, which creates a need for new security solutions like VASCO's.
The growth in the mobile banking industry is going to allow the company to expand its client base and boost its bottom-line results. Yahoo Finance has compiled analyst data showing that VASCO's revenue could increase to $192 million in 2018, up from its expected $185.7 million this year.
These increases will be good news for VDSI stock, which has dropped 1.1% so far in 2017 thanks to an 8.2% revenue dip between the first and second quarters of the year. Because of the potential for massive gains, Sid believes VDSI presents investors with an excellent profit opportunity at the perfect entry point.
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