The 3 Best Penny Stocks to Buy in October 2018

For ambitious investors, penny stocks offer triple-digit return opportunities with little up-front investment. That's why we're bringing you the three best penny stocks to buy in October 2018.

In order to identify penny stocks with the greatest profit potential, we use the Money Morning Stock VQScore™ system.

It finds companies that have a high change of delivering strong returns, then we screen them for stocks that trade for under $5 a share – the SEC's definition of a penny stock.

Our screening process eliminates scams and companies without any real potential, leaving us with only profitable companies that can grow their share prices.

Today, we've identified three penny stocks with serious growth potential.

In fact, our top penny stock to buy could jump over 230% in just the next year…

Top Penny Stocks to Watch in October, No. 3: Mechel Mining Co.

Mechel Mining Co. (NYSE: MTL) is one of Russia's largest mining and metal companies, focusing on the production of coal, iron ore, steel, and silver.

Much of Mechel's growth over the last ten years has been the result of an aggressive acquisitions strategy that has expanded the company's global reach.

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Since 2004, Mechel has undertaken nine significant takeovers, giving the company a hold in mineral-rich regions across the Russian subcontinent and the Pacific Rim.

These acquisitions fueled the companies' robust profit growth over the last four years. Since 2014, the company's gross profit jumped 52% while expanding its operating income by a staggering 547%.

This kind of growth has analysts giving Mechel a target price of $4 – a 28% increase over today's price of $3.12.

That's a decent return. However, our next penny stock is on the track to return more than twice that amount…

Top Penny Stocks to Watch in October, No. 2: Valhi Inc.

Located in Dallas, Texas, Valhi Inc. (NYSE VHI) is an American holding company that manages market securities for a wide range of domestic industries.

Valhi manages funds for several wholly-owned and majority-owned subsidiaries, including companies like CompX International Inc., Waste Control Specialists LLC, and Kronos NL.

While managing much of these firms' shares, Valhi is itself owned by the privately held Contran Corporations, which owns a majority of the company's common stock.

Valhi has seen a substantial increase in the company's gross profit over the last three years, jumping nearly 170% since 2015.

Meanwhile, Valhi currently delivers a whopping 45% return on equity, indicating that the company is using raised capital efficiently and is likely to continue to expand its gross profit for the foreseeable future.

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Valhi currently trades for $2.36 a share. However, thanks to the company's efficient management of capital, analysts see the company's stock heading to $4 in the near future – a gain of 70%.

That's a strong return. However, our next top penny stock to buy in October is even more profitable.

It's a natural gas and electricity company on the verge of tremendous gains – analysts project over a 230% return for shareholders…