The 3 Top Penny Stocks to Watch in April 2018

Penny stocks are a great opportunity for investors who want to pursue gains without having to invest large amounts of capital. That's why the Money Morning team is bringing you the three top penny stocks to watch in April 2018.

It's important to note that while penny stocks can provide investors with significant gains, they are also inherently risky. While there are a few penny stocks that have tremendous growth potentials, many of them pose a significant risk to retail investors.

In order to avoid any substantial losses, we follow five rules for investing in penny stocks. Check them out below.

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.

In addition to following these rules, our team uses the Money Morning Stock VQScore™ to identify penny stocks that have real growth potential.

Developed from our proprietary valuation system, the VQScore identifies undervalued stocks with the highest profit potential by using a blended analysis of a company's earnings potential, growth rate, earnings-per-share acceleration, and market volume.

The VQScore system runs on a scale of 1 to 4, with 4 indicating a stock with strong growth potential.

Our top three penny stocks for April 2018 all have VQScores of 3 or better, meaning that they have strong underlying value and a solid chance of providing significant gains for investors.

In fact, a few of them are slated to provide seismic returns, according to Wall Street analysts.

Here they are...

Top Penny Stocks to Watch in April, No. 3: Fortuna Silver Mines Inc.

Based in Vancouver, Fortuna Silver Mines Inc. (NYSE: FSM) is a silver mining company.

Fortuna operates two mines - one in Mexico and one in Peru. These mines produce a combined 8.4 million ounces of silver per year.

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In the last month, Fortuna's stock has risen 17.8% - largely in response to geopolitical uncertainty driving international demand for silver.

According to Money Morning Resource Specialist Peter Krauth, this instability is a key part to driving up the value of both silver and silver stocks.

"Geopolitics, stock markets, and central planners are helping to provide a floor for silver prices as uncertainties rise, stocks become volatile, and budget deficits explode," he says.

In fact, analysts see global upheaval pushing Fortuna's market price as high as $9 in the near future. That's a gain of over 70% from the stock's current price of $5.25.

Fortuna's 70% gain are exciting. However, our second-best penny stock to buy is set to rake in gains of over 140%...

Top Penny Stocks to Watch in April, No. 2: Entravision Communications Co.

Entravision Communications Co. (NYSE: EVC) is a Spanish-language media company based in Santa Monica, Calif.

Entravision's profit potential lies with the nation's rapidly expanding Latino community, who's 55 million members makes up the majority of Entravision's customer base.

Over the next 10 years, the American Latino population is expected to expand by another 24 million Latino Americans - an increase of over 30%.

This growing audience is already showing in the company's growth. Over the last year, the company had a return on equity of 49.84%. That's over 350% higher than the industry average of 11.99%.

With an expanding consumer market continually seeking new content from major Hispanic media outlets, it's likely that Entravision will experience sustained growth well into the future.

And Wall Street agrees with us. Analysts have put a high price target of $11 on the company's stock, which is a 142% increase from today's price of $4.54.

While these gains are enticing, the third pick on our list is the most exciting of all...

In an effort to avoid the pitfalls of normal penny stocks, Money Morning Small-Cap Strategist Sid Riggs looks for low-cost companies backed by strong underlying value and spectacular growth potential.

Sid recently identified a new small-cap recommendation trading at a low price with incredible small-cap value.

It's a medical products company on track to receive FDA approval for self-testing medical devices.

Here's Sid's pick for reliable gains at a bargain price...

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Top Penny Stocks to Watch in April, No. 1: OraSure Technologies Inc.

OraSure Technologies Inc. (Nasdaq: OSUR) develops tests to detect a range of diseases such as HIV, Zika, and influenza. The company also sells popular cryosurgical products that allow people to remove and treat warts, lesions, and other unwanted blemishes.

OraSure's main attraction is its solid track record of quick FDA approval for its products.

In just three years, OraSure received approval for two methods to detect HCV, as well as the first at-home HIV test - something no other company has been able to do.

Sid first recommended OraSure in February 2017, when the company was trading for $11.12 a share. Today, OraSure trades for $17 - a gain of over 58%.

However, Sid still thinks the stock is underrated by Wall Street, which means even more opportunity for you.

Since Q4 2016, OraSure has beaten analyst earnings report estimates by 40.5% on average. With continued growth in the healthcare industry thanks to an aging population, Sid thinks there's little reason for OraSure's performance to slow down anytime soon.

And Wall Street agrees with him. Analysts see OraSure climbing to $24 from $17 in just 12 months - a gain of over 37%.

But that could be too conservative, especially since Wall Street is underestimating the stock.

While these gains are impressive, there's another profit opportunity we're closely following for windfall profits...

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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