10 Top Penny Stocks to Watch This Week (March 5)

Seven out of 10 of last week's biggest penny stock gainers came from the healthcare industry - and we'll show you exactly which stocks in our list of the top penny stocks to watch this week...

Take a look at Zosano Pharma Corp. (Nasdaq: ZSAN). Shares of Zosano rose from $5.29 to $8.43 - a gain of over 50% - in just a week.

The sudden gain in Zosano's share price came after news that the company recently received a patent for a new method of migraine treatment therapy. According to company CEO John Walker, the patent is likely to serve as a catalyst for the company's future growth.

"We intend to pursue similar patent coverage for future products that Zosano develops internally, and in future partnerships," Walker said.

BIG, FAST PROFITS: This one pick paid 100% in seven days, then 205% the next day, and 410% by the next week. You've got to see how it's done...

But while the healthcare industry led the charge for penny stocks last week, these gains are already in the books. After the list of penny stocks to watch, we'll show you the stock Money Moring Small-Cap Strategist Sid Riggs is recommending right now...

Penny Stock Current Share Price (As of March 5) Feb. 26 - March 2 Gain
Zosano Pharma Corp. (Nasdaq: ZSAN) $7.25 39.38%
Auris Medical Holding AG (Nasdaq: EARS) $0.28 26.49%
T2 Biosystems Inc. (Nasdaq: TTOO) $6.26 25.20%
Synergy Pharmaceuticals Inc. (Nasdaq: SGYP) $2.22 24.00%
Southwestern Energy Co. (NYSE: SWN) $4.29 20.49%
Pangaea Logistics Solutions Ltd. (Nasdaq: PANL) $3.03 19.91%
TearLab Corp. (OTCMKTS: TEAR) $0.32 18.71%
Avinger Inc. (Nasdaq: AVGR) $1.44 18.35%
Conatus Pharmaceuticals Inc. (Nasdaq: CNAT) $6.73 17.92%
Stein Mart Inc. (Nasdaq: SMRT) $0.68 17.84%

While the gains these stocks made are exciting, they also highlight the danger of investing in penny stocks.

You see, if any penny stock can climb over 50% on good news, it can also fall 50% on bad news just as quickly.

Penny stocks are considered speculative investments and are incredibly risky for the retail investor. Take VistaGen Therapeutics Inc. (Nasdaq: VTGN), for example.

On Dec. 6 of last year, Vistagen shot up 177%, from $0.92 to $2.55. Over the next two weeks, the stock pulled back to $1.08, leaving investors who bought at $2.55 with an almost 60% loss.

Before you consider making speculative investments, look at our rules for safely trading penny stocks on the right.

Rules for Safely Trading Penny Stocks

  • No more than 2% of your overall stock portfolio should consist of penny stocks.
  • Avoid stocks with average daily trading volume of less than 500,000 shares.
  • Avoid penny stocks being aggressively promoted on public discussion forums or websites not focused on investing.

Here are the top three warning signs of a shell company scam, according to the SEC and FINRA...

  • If a company has been dormant for many years and then brought back to life.
  • If a company has changed its name and, especially, business focus multiple times.
  • Check for massive reverse stock splits like 1-for-20,000 or 1-for-50,000.

But savvy investors can find explosive profit potential in more reliable companies...for-20,000 or 1-for-50,000.

Money Morning Small-Cap Strategist Sid Riggs is committed to identifying companies with strong underlying value that will enhance your profit potential.

When it comes to providing readers with massive profit potential, Sid is an expert. For example, when Sid picked Neurocrine Biosciences Inc. (Nasdaq: NBIX) as his favorite profit play for December 2013, the company was trading at $9 a share.

Today, Neurocrine trades at just below $90 a share, a nearly 900% increase.

And Sid has a new small-cap recommendation...

Sid's pick is a player in the semiconductor industry with huge profit potential. This company's revenue is growing at a rate of 20% per year, far outpacing the 11.5% of the semiconductor industry as a whole.

And it trades for less than $10 a share, giving you the affordability of a penny stock without the speculation.

Here's Sid's pick and how you can play it...

The Best Penny Stock to Buy Right Now

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Sid's pick is AXT Inc. (Nasdaq: AXTI), a semiconductor company based out of Fremont, Calif. AXT focuses on creating semiconductor chip substrates by using its proprietary freezing technology. Substrates are typically made of silicon and are an important component in microchips, lasers, and solar panels.

Due to the company's proprietary freezing technology, AXT's substrates are almost twice as efficient as their standard silicon counterparts. As a result, the company has been able to grow its revenue 50% faster than most of the semiconductor industry.

In just the last 12 months, the company's stock has gained a staggering 78%. But the gains are only going to continue.

Sid thinks investors are still missing out on AXT's true profit potential.

Over the last five years, the company has beaten quarterly earnings estimates by an average of 94.44%. Sid predicts that AXT's winning streak will continue.

AXT currently trades for $7.60.

Sid isn't the only one bullish on this semiconductor company. Wall Street analysts see AXT hitting $12, a nearly 60% gain from today's price. And that's just the beginning for this chip maker.

While AXT is a great play in the semiconductor industry, a new breakthrough is changing everything...

Critical: FCC Approves Revolutionary Device

It's a stunning breakthrough that's set to spark the most monumental life-changing transformation you'll ever see.

The Washington Times says the technology behind this revolutionary innovation "will change the world on a scale hardly seen in human history."

And now that it's approved by the FCC, the floodgates are set to open - and could reward early investors with astronomical gains.

With one tiny company at the heart of this massive shift, even a small investment could create staggering wealth for years to come.

Continue here to learn more...
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