3 Top Penny Stocks to Buy for March 2018

Today, we're showing Money Morning Members the three top penny stocks to buy for March 2018, and every one of them has incredible profit potential.

In fact, one of them could deliver 400%-plus returns in 2018. And all three of them could soar at least 100%...

Penny stocks are so attractive thanks to their affordable share prices below $5.

And at these prices, even a small increase in trading volume can cause a stock's price to climb.

For instance, SemiLEDS Corp. (Nasdaq: LEDS) is a light-emitting diode (LED) chip and component maker that was trading at just $2.27 on Nov. 9.

Then, exactly one week later, on Nov. 16, the stock soared 205.3% to $6.93 after the company reported positive Q4 2017 financial results on Nov. 15.

Top penny stocks to buy for February 2018

That's an exceptional return in just six trading sessions. Enough to turn a $1,000 stake into $3,053 if you were able to sell perfectly at the top, when it traded for $6.93.

But timing this perfectly can be tricky...

Investors who didn't sell at $6.93 watched their LEDS shares plunge as low as $3.60 by Dec. 11. Unwitting investors who bought at the top would be sitting on a massive 48% loss at that time.

Today, LEDS shares trade at $4.33, 37.5% lower than its Nov. 16 high.

And this underscores the painful reality of investing in penny stocks.

Most are worthless, and even the ones with potential can move so quickly that the average investor gets fleeced.

That's why it's important to buy only the most promising penny stocks.

And because of the high number of duds out there, we're dedicated to finding only the most qualified penny stocks for our subscribers.

An easy way to get started is by focusing on penny stocks that meet the requirements to be listed on the Nasdaq stock exchange.

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But at Money Morning, we make sure any prospective penny stock passes through three more screens before we share them with our readers...

How We Choose the Most Promising Penny Stocks

To find you the best penny stock opportunities out there, we have to run a rigorous screen of all stocks trading under $5.

Here are the three rules we use to find the best penny stocks to buy.

  1. We only look at penny stocks that are actively receiving analyst coverage and have ratings of "hold" or better, according to data collected by S&P Capital IQ.
  2. We make sure that 12-month price targets are above the stock's current price.
  3. We look for signs of fundamental strength, including growing sales, profits, cash flow from operations, as well as a compelling business model within a growing industry.

By applying these rules (and more) to penny stocks, we're able to find the most promising companies with major growth potential.

Now that you know how we screen for the best opportunities, here are the three best penny stocks that currently fit our rules...

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Best Penny Stocks to Buy for March, No. 3: Amarin Corp. Plc.

Dublin-based Amarin Corp. Plc. (Nasdaq: AMRN) is a biopharmaceutical company making Vascepa, a prescription-only omega-3 fatty acid capsule used to reduce triglyceride levels in adults.

Triglycerides are the most abundant fat molecule in most organisms. Vascepa helps treat patients with high levels of fat molecules in their bloodstream. Having high levels of fat in one's bloodstream can lead to high cholesterol and heart disease, which is the leading cause of death in the United States.

For that reason, Vascepa is in high demand, and Amarin is positioned to profit.

In the company's Q3 2017 earnings report, CEO John Thero said estimated prescriptions for Vascepa grew 44% compared to the same period a year ago. Thero also said the company was evaluating potential partnerships to expand the promotion of Vascepa globally.

Shares of AMRN are covered by five firms, with an average price target of $7.60 and a high target of $10 from Cantor Fitzgerald & Co. From its current share price of $3.71, those price targets represent upside of 104.85% and 169.5%, respectively, for AMRN stock.

The company will be announcing its Q4 and full-year 2017 earnings results on Feb. 27 before the market opens. If those results surpass analysts' expectations like they have in the last two quarters, the stock will likely pop.

Next up is a company searching for a cure for cancer with nearly 190% profit potential...

Best Penny Stocks to Buy for March, No. 2: Agenus Inc.

Agenus Inc. (Nasdaq: AGEN) is a Massachusetts-based company developing therapies to get a cancer patient's own immune system to help fight the cancer.

In order to engage a cancer patient's immune system, Agenus develops antibody discovery platforms and vaccines to fight cancer.

The company's antibody discovery platforms identify which antibodies regulate immune response against pathogens that invade the body. Once an antibody is identified and its effectiveness to stimulate an immune response to cancer is evaluated, the company develops a vaccine to stimulate that antibody.

According to the company's Q3 2017 earnings call on Nov. 7, CEO Garo Armen said that, in less than two years, five programs advanced rapidly through clinical trials.

Shares of AGEN currently trade at $5.19, with an average price target of $11 and a high target of $15 from JMP Securities. Those targets represent upside of 112% and 189%, respectively.

The company is expected to announce its Q4 and full-year 2017 earnings on March 8.

Now, as promised, here's a stock with more than 400% profit potential...

Best Penny Stocks to Buy for March, No. 1: DURECT Corp.

DURECT Corp. (Nasdaq: DRRX) develops medicines based on its drug delivery programs.

The company sells osmotic pumps used to dispense medicine under the skin at a controlled rate through its ALZET product line. The ALZET brand also includes accessories used in experiments with mice, rats, and other laboratory animals.

The company also offers biodegradable raw materials to be used in pharmaceutical and medical devices under its LACTEL brand.

Based on these drug delivery systems and raw materials, DURECT has multiple drug candidates in the phase 1 drug development phase.

We believe having a portfolio of products that includes both drug delivery systems as well as drugs built on those systems makes DRRX shares less risky than other biotechnology companies focused on one type of product or drug candidate.

The stock currently trades at $1.17 and is covered by three firms, with an average price target of $2.97 and a high target of $6 from Zack's Investment Research. From current levels, those targets represent upside of about 154% and 413%, respectively.

On July, 28 the FDA will announce if it ultimately approves the company's New Drug Application for RBP-7000, a treatment for schizophrenia.

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