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So far this year, the Dow Jones Industrial Average has been listless at best, declining nearly 2% on the year.
But the top penny stocks to buy in July 2018 offer not just the potential to beat the market, but to crush it.
Now, penny stocks are riskier than other stocks since the companies are smaller, less proven, and are sometimes shell companies with no underlying value.
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But to help alleviate some of these concerns, we turn to our proprietary stock rating system, the Money Morning VQScore™.
We selected our top-rated stocks trading for under $5 per share, the official definition of a penny stock.
And these penny stocks offer potential gains of nearly 200%...
Top Penny Stocks to Buy in July 2018, No. 3: PDL BioPharma Inc.
Nevada-based PDL BioPharma Inc. (Nasdaq: PDLI) buys significant stakes in biotech, medical device, and pharma companies, and profits from these firm's patent royalties.
That means PDL, unlike other biotech firms, doesn't have to spend money on drug research and risky clinical trials to receive approval from the U.S. Food and Drug Administration (FDA).
It can cost up to $2.6 billion to develop a drug from clinical trials to rollout, according to the Tufts Center for the Study of Drug Development.
And the risks of drug development are steep. According to a BIO and BioMedTracker study, just 10% of medications ended up going from phase 1 clinical trials to approval by the FDA in the 2004 to 2010 period.
Biotech firms could spend billions of dollars on a drug that will never reach the public.
But PDLI bypasses these risks, with drug patents for medications already on the market and the purchase of companies that already have products for sale.
PRNewswire.com reported that in 2016 PDL made a $75 million investment in Noden Pharma DAC, ultimately investing a total of $214 million.
PDL bought exclusive global rights to produce and sell the prescription medicine that retails in the United States under the Tekturna and Tekturna HCT names. In addition, it bought the rights to Rasilez HCT and Rasilez throughout the remainder of the globe. These are hypertension treatments, and the hypertension market is forecast to reach more than $33 billion in 2024.
So instead of spending billions in hypertension drug development, PDL acquired the rights to sell Rasilez and Rasilez HCT via the deal with Noden. Further acquisitions could propel the share price higher this year.
Currently, PDLI holds $243 million in debt and $532 million in cash. Given these positions, it could buy additional patents or companies in 2018. These moves would increase revenue, which would drive the share price.
PDL's current share price is $2.32. Analysts forecast that PDL shares could hit a per-share price of $3 in a year, a climb of roughly 22% from current prices.
Top Penny Stocks to Buy in July 2018, No. 2: Turquoise Hill Resources Ltd.
Turquoise Hill Resources Ltd. (NYSE: TRQ) is a Canadian mining firm that has been in operation since the mid-1990s.
Turquoise Hill explores for deposits in gold, copper, silver, and molybdenum.
Globally, 35% of molybdenum is used for structural steel.
The steel sector is worth $900 billion per year. Reuters.com indicates that the average price worldwide has risen approximately 50% since December 2015, after reaching the lowest level in a dozen years.
Turquoise Hill also enjoys a two-thirds interest in Oyu Tolgoi, Mongolian copper, gold, and silver mines that are among the world's biggest.
IHSMarkit.com forecasts that consumption of copper worldwide will rise 3% both this year and next. The demand is forecast to drive the share price.
Analysts forecast that TRQ shares will trade at $4 per share in a year. That's a 30% potential gain.
But our top penny stock to buy right now boasts nearly 200% potential gains...