There’s no doubt that penny stocks are an affordable way to get into investing, and while they come with some inherent risks, they can be extremely lucrative. But with more than 15,000 penny stocks on the market, how do you know which of them are stocks on the rise?
The Security and Exchange Commission defines a penny stock as a share of a company sold for a value of less than $5. We use the Money Morning Stock VQScore™ system to bring you cheap stocks on the rise so you can have the biggest potential for returns on your investments.
How to Choose Hot Penny Stocks
Having a good understanding of how to choose penny stocks is a must then deciding what is worth investing in. Once you have this knowledge, you can build upon this knowledge with deeper insights and discover penny stocks are on the rise and invest with better odds that you’ll see a great return.
To begin, consider is the number of shares available against the price of the share itself. Just because the share costs less, doesn’t mean the market capitalization of the company is any lower. However, the number of shares available may lead to dilution. This is your second consideration. For example, if a company seeks to raise capital, they may offer more shares at a lower price, without actually changing anything about the business and its forecast. These considerations change depending on the internal and external factors at play.
However, when you can address these two characteristics in the beginning, you will likely have put more thought into your investment than many other retail investors at this point.
Spotting Winners and Cheap Stocks on the Rise
The fundamentals of a company and the way it raises capital are essential for the determination of its potential to be a winning investment. How are they profitable? Do they have a current model that ensures its likelihood of becoming profitable? Is the company a competitor in its area? Who are the key competitors and what does this company do that sets them apart with their product or service?
Aside from the company’s business model and forecasted profits, as well as the method it uses to raise capital, another indicator of a penny stock on the rise is the presence of a catalyst. A catalyst can be when the smaller company anticipates being bought by a larger company, or the business may have recently announced they’ve patented a product. A catalyst in an indicator of potential movement.
Doing research on stocks prior to investing puts you in a much better position to see success with investing in penny stocks, and we provide tools for you to have top insight on some of the best penny stocks on the rise.
We done our own research to help you out and here are our top hot penny stocks for July…
Top Penny Stock to Watch in July, No. 3: Mizuho Financial Group
Mizuho Financial Group Inc. (NYSE: MFG) is a Japanese banking holding company headquartered in Tokyo, Japan.
The second-largest financial services company in Japan, Mizuho controls $1.8 billion in assets, ranking just behind Mitsubishi UFJ Financial Group Inc.
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Mizuho's profitability comes from the company's significant diversity. Mizuho divides its financial services among retail banking, global asset management, financial strategy, and corporate investment.
Spreading its business across four distinct financial services, Mizuho's business is well-insulated against the volatility that often rocks financial companies in turbulent markets. It also allows Mizuho to tap profit centers across the spectrum of the financial industry.
This diversity is consistently reflected in the company's bottom line. Between 2017 and 2018, Mizuho managed to raise its gross profit by over $57 million while growing earnings by over 2%.
Mizuho currently trades for $3.33. However, analysts see the company's stock heading to $4.00 by the end of the year, locking in a gain of 23% for investors.
While Mizuho's profit potential is promising, our second penny stock to watch is even better.
Top Penny Stock to Watch in July, No. 2: Turquoise Hill Resources
Turquoise Hill Resources (NYSE: TRQ) is a Canadian mineral exploration and development company headquartered in British Columbia.
Focusing on the Pacific Rim region, Turquoise Hill is in the process of developing several large mines, including the Oyu Tolgoi Project in Mongolia - one of the world's largest copper and gold porphyry deposits.
For the last four quarters, Turquoise Hill has significantly beat earnings by an average of 225% while heavily investing in the expansion of its mining operations across the globe.
This investment has given Turquoise Hill some aggressive production estimates for 2018. According to guidance issued in 2017, Turquoise Hill expects to pull between 125,000 to 155,000 tons of copper and 280,000 tons of gold in 2018.
In June, Turquoise Hill recommitted to these figures and stated that it had the potential to outpace initial estimates.
Recently, TRQ experienced a drop in market price following the retirement of the company's longtime CEO Jeff Tygesen. However, this slip has created a great buying opportunity for savvy investors.
Turquoise Hill currently trades for $2.76. However, with rapid expansion fueling rising profit potential, analysts estimate that the company could hit $4.00 in the near future. This is a gain of 43%.
Both Turquoise Hill and Mizuho are great penny stock investments for July. But our top penny stock outpaces both of them.
It's an international steel company poised to break out in the face of international trade conflict - and make a killing in the process...
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Top Penny Stock to Watch in July, No. 3: Companhia Siderúrgica Nacional
Companhia Siderúrgica Nacional (NYSE: SID) is the second-largest steel producer in Brazil and one of the largest crude steel producers in South America. Located in the state of Rio de Janeiro, the company produces a wide range of steel products, including galvanized steel and tin.
According to Credit Suisse, who recently upgraded the company's stock to "outperform," the company's success in the shifting international trade landscape is largely due to the fact that "global steel fundamentals are largely unchanged." As a result, SID's "business fundamentals remain intact."
Not only that, but global steel demand is projected to grow by 1.6% in just the next year. India, one of the world's fastest-industrializing countries, is expected to increase demand by 5.5% alone.
Credit Suisse's estimates and increasing demand are certainly evident in the company's bottom line. Company revenue has risen sharply over the last three years, jumping 44% between 2015 and 2017.
At the same time, SID has managed to significantly cut losses from $1.2 million to just under $900,000 - a drop of over 25%.
With a current return on equity of 18.63%, SID offers a robust return to investors that is insulated from the trade turmoil in Washington and likely to provide significant profits to savvy investors.
Today, SID is trading for $1.97 per share. However, this stock is projected to hit $3.15 as trade tensions heat up in July - a gain of 62%.
Stocks like Turquoise Hill, Mizuho, and Companhia Siderúrgica Nacional are easy to identify thanks to the VQScore system.
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