The 3 Best Penny Stocks to Buy in Q3

If you don't have time to research the over 15,000 penny stocks available, you're not alone. By popular demand, we are giving Money Morning readers our list of the three best penny stocks to buy in Q3.

While penny stocks are known for their low liquidity and volatile price swings, penny stocks can still be profitable investments if you make the right picks.

Just last month, we uncovered a social network company flying under the radar. It was trading near $3 a share, then soared 158% in only one week of trading. This is just one example of how to make money with penny stocks.

Don't Miss: This secret stock-picking method has uncovered 217 double- and triple-digit peak-gain winners since 2011. Find out how it's done...

But investing in penny stocks can still be risky. There are plenty of penny stock scams designed to do nothing more than to take your investment dollars. Falling for a pump-and-dump scheme could leave you holding worthless shares in the long term.

Fortunately, we have developed a method to identify the top penny stocks to watch with our Money Morning Stock VQScore™ .

Our top-rated stocks are some of the most profitable companies on the market, and they meet our criteria showing serious growth potential.

One of the penny stocks on our list boasts potential gains of over 40% in the coming year.

If you're ready to buy penny stocks, here is our list of the best penny stocks for Q3...

Best Penny Stocks to Buy in Q3, No. 3: Mizuho Financial Group

Mizuho Financial Group Inc. (NYSE: MFG) is a Tokyo-based bank holding company that is now Japan's second-largest financial services company.

Mizuho controls assets worth more than $1.8 billion, which puts the company just after Mitsubishi UFJ Financial Group Inc.

stack of coins

The company's profitability is derived from its diversity. It segments its financial services business among corporate investment, retail banking, financial strategy, and global asset management.

By spreading its revenue across four diverse financial services, Mizuho is able to insulate its business against the volatility that can impact these types of companies when markets become turbulent. This also allows Mizuho to tap into a variety of profit centers throughout the finance industry.

The company's bottom-line results reflect this diversity. In 2018, Mizuho reported an increase of $57 million in its gross profit and a 2% boost in earnings in just one year.

MFG stock currently trades at $3.34 per share. Analysts expect that shares could trade at $4 by the end of 2018, representing a 19.76% gain for today's investor.

Plus, it boasts a perfect VQScore of 4, meaning it's the perfect buying opportunity.

While this is one of the top penny stocks to buy, our next pick is even more promising...

Best Penny Stocks to Buy in Q3, No. 2: Turquoise Hill Resources

Turquoise Hill Resources Ltd. (NYSE: TRQ) is a Canada-based development and mineral exploration company.

Based in British Columbia, Turquoise Hill focuses on developing several large mines in the Pacific Rim. Specifically, it has operations in Mongolia, which is one of the world's largest gold porphyry and copper deposits.

The company has smashed earnings estimates over the past four quarters, beating estimates by an average of 225%. It has also invested heavily in the global expansion of its mining operations.

These reinvestments into the operations have enabled the company to release some aggressive production estimates for the current year. In 2018, it expects to produce 280,000 tons of gold and up to 155,000 tons of copper.

The company recommitted to these estimates in June and stated that it has the capacity to beat them.

TRQ recently experienced a share-price drop after its long-time CEO, Jeff Tygesen, retired. This presents a unique buying opportunity for investors.

With a perfect VQScore, we agree.

TRQ is now trading at $2.81, but analysts expect that shares could hit $4.00 in the short term. This represents 42.34% gains for investors.

Our last penny stock is an international steel company that could produce even better gains...

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

Best Penny Stocks to Buy in Q3, No. 1: Companhia Siderúrgica Nacional

Our top pick is Companhia Siderúrgica Nacional (NYSE: SID).

This company is among the largest steel producers in South America and is now the second-largest steel producer in Brazil. SID is based out of Rio de Janeiro, and it is responsible for producing a broad range of steel products, including tin and galvanized steel.

Credit Suisse recently upgraded SID's stock to "Outperform." When it did this, the analysts attributed the move to the fact that SID has been successful in the shifting landscape of international trade. This is due in large part to the fact that SID's business fundamentals remain strong while the fundamentals of the global steel industry remain largely unchanged despite the U.S. trade war.

Even better news, demand for steel globally is expected to increase by 1.6% over the next year alone. India, one of the fastest-growing countries on an industrial basis, is anticipated to boost its demand for steel by 5.5% just in the next year.

This increased demand and the estimates by Credit Suisse are showing up on the company's bottom-line results. Between 2015 and 2017, company revenue jumped 44%, which is a sharp increase over just three years.

SID has also managed to reduce its losses as its revenue blooms. Over the same period, losses decreased 25%, going from $1.2 million to just below $900,000.

SID is currently trading at $2.28 per share. The best news is that the target price for this stock is $3.15 as July's trade tensions accelerate. If you invest today, this represents a gain of 38%.

And one of the best reasons to buy SID is its top-rated VQScore, a great sign for future growth.

But don't stop there - we have even more lucrative stock picks...

The Gains on This One $10 Stock Alone Could Earn You Enough to Retire

A paradigm-shifting technology could disrupt every major industry, and one tiny company is at the center of it all.

It recently inked four major deals... BlackRock has snatched up 29 million shares... and its technology could be adopted by millions around the globe.

Best of all, this stock trading for less than $10 could deliver a 471.9% gain for early investors.

Click here now for details...

Follow Money Morning on Facebook, Twitter, and LinkedIn.