10 Top Penny Stocks to Watch This Week (June 4)

With last week's top penny stock locking in a 192% gain, we're looking at the top penny stocks to watch this week - plus the one stock you need to buy right now.

Investors are attracted to penny stocks because of their low up-front costs and the possibly of huge returns.

Take this week's top gainer, Co-Diagnostics Inc. (Nasdaq: CODX), as an example. Last Monday (May 24), CODX opened at $1.62 before soaring 192% over the course of the week to close at $4.05.

10 Top Penny Stocks to Watch This WeekLike most successful penny stocks, CODX stock jumped on widely publicized news. The Salt Lake City-based molecular diagnostics company announced a partnership with Stanford University to study CODX's recent technological breakthroughs.

While exciting, CODX and our other penny stocks to watch this week are unlikely to tack on any additional gains this week. But don't worry. After looking at our 10 top penny stocks to watch, we'll show you a stock with serious profit potential in its future...

Penny Stock Current Share Price Last Week's Gain
Co-Diagnostics Inc. (Nasdaq: CODX)  $4.35 192.07%
Viking Therapeutics Inc. (Nasdaq: VKTX)  $9.37 95.78%
DHI Group Inc. (NYSE: DHX)  $3.10 67.57%
Axovant Sciences Ltd. (Nasdaq: AXON)  $1.76 60.00%
Netlist Inc. (Nasdaq: NLST)  $0.21 53.79%
Link Motion Inc. (NYSE LKM)  $1.23 47.73%
CorMedix Inc. (NYSE: CRMD)  $0.26 44.44%
Vistagen Therapeutics Inc. (Nasdaq: VTGN)  $1.34 40.21%
J. Jill Inc. (NYSE: JILL)  $8.30 36.55%
Adomani Inc. (Nasdaq: ADOM)  $1.52 34.86%

In order to make sure we protect ourselves from any substantial losses from investing in penny stocks, we follow five rules for penny stock investing. Take look at them on the right.As these stocks demonstrate, there are penny stocks that have tremendous growth potential that can easily dwarf your initial investment. However, most penny stocks lack the solid underlying financials necessary to generate a significant return.
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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 we can do even better than penny stocks. We've uncovered small-cap stocks - those with market caps between $300 million and $2 billion - with the potential to soar.

You see, small-cap stocks have a serious advantage over penny stocks because of their strong financial backing and growth potential.

In fact, according to investment consulting firm Ibbotson Associates, small-cap stocks have even averaged better returns than large caps going back to 1927.

Using the Money Morning Stock VQScore™, we've found a small-cap stock that is on the cusp of huge gains thanks to the changing global trade landscape.

In fact, this small cap is looking at possible returns of over 40%...

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Cleveland-Cliffs Inc. Is Our Favorite Small Cap to Buy

Cleveland-Cliffs Inc. (NYSE: CLF) is a company that specializes in the mining and refinement of iron ore. The company owns mines across North America and Western Australia.

In the United States, CLF operates five iron ore mines in Michigan and Minnesota. Located near the Great Lakes, these mines produce 32.9 million gross tons of iron ore annually.

Much of the company's recent growth has been the result of widespread anticipation over growing domestic steel demand.

While the United States only produces 5% of the global steel supply, that figure is expected to rise as domestic demand continues to grow thanks to increasing price pressure on imports. According to the World Steel Association, North American steel demand is expected to rise by 3% in 2018 and an additional 1.9% in 2019.

With American international economic policy favoring domestic mining and ore refinement, American iron miners and steel refiners are expected to benefit from increased demand.

Cleveland-Cliffs is certainly anticipating as much - in its 2018 outlook summary, the company sees ore pellet prices jumping from $97 per ton to $107 - a 10% increase.

And analysts see this increase playing out in the company's bottom line. Cleveland's earnings per share were recently up to $1.23 from $0.89 - an increase of 38%.

Cleveland also has a VQScore of 3.75 - meaning it has strong underlying value and a high chance of providing significant gains for investors.

Cleveland currently trades for $8.46. However, with such strong growth behind the company, analysts see the price heading 41% higher to $12 a share in the next 12 months. But it could be even more once the new tariffs go into effect.

But penny stocks and small caps aren't the only tickets to soaring gains...

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