Today, we're giving you the three top penny stocks to buy right now to help you find the next triple-bagger.
The U.S. Securities and Exchange Commission (SEC) defines penny stocks as securities that sell for $5.00 per share or less.
With such low entry prices, a small investment can generate tremendous gains. For example, if a stock sells for a $1.00 and jumps just one dollar, that's a quick 100% gain. And that's what investors are looking for in the best penny stocks.
However, this doesn't mean penny stocks are always a safe investment. Penny stocks are a volatile asset class, and investors should have a strong risk tolerance to put penny stocks to work in their portfolio.
Investors shouldn't risk more than they are willing to lose in penny stocks.
In order to identify penny stocks with the highest profit potential, we utilize the Money Morning Stock VQScore™ system.
The VQScore identifies companies with a strong chance of returning impressive gains to investors.
And the VQScore system recently identified three penny stocks with breakout potential.
In fact, one could jump over 200%…
Top Penny Stocks to Buy Now, No. 3: Mechel Mining Co.
Russia-based Mechel Mining Co. (NYSE: MTL) is one of Russia's largest mining firms. It produces coal, steel, iron ore, and silver.
A lot of the company's growth over the past decade is the result of acquisitions that have aggressively expanded MTL's reach around the globe.
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In the last 14 years, Mechel successfully completed nine takeovers, significantly expanding its presence in the subcontinent of Russia and Pacific Rim countries – regions rich in raw minerals.
These takeovers have fueled MTL's strong growth since 2014. In the last four years, its gross profit has climbed an impressive 52%, and its operating income has expanded a whopping 547%.
And analysts think this stock still has room to run. They set a price target on MTL of $4.00, forecasting a 28% return from today's share price of $3.11.
That's a nice return. But our next penny stock is on track to provide even greater profits…
Top Penny Stocks to Buy Now, No. 2: Valhi Inc.
Dallas, Texas–based Valhi Inc. (NYSE VHI) is a U.S. holding company managing market securities for a wide array of U.S. industries.
The company manages funds for firms that are wholly owned and majority owned. Examples include CompX International Inc., Waste Control Specialists LLC, and Kronos NL.
Valhi itself is owned by a privately held firm, Contran Corporations. Contran owns a majority of VHI common stock.
The company's diversification of management has shown up in Valhi's bottom line.
In the past three years, Valhi's gross profit has skyrocketed almost 170%.
The company also boasts a highly impressive return on equity level of 45%. A figure like that means that the company's equity is being used to maximize the company's returns.
Today, VHI is trading at $2.09 per share. But analysts, looking at the company's ability to efficiently manage its money, expect the stock to trade at $4.00 during the near future. That's a soaring 91% gain.
However, our top penny stock to buy blows this pick out of the water.
It's an energy company with the potential to return 224% gains…