The stock market volatility has more than doubled since April. But volatility is good for penny stocks. And today you'll find our top penny stocks to buy in June.
These market swings have sent the Volatility Index (VIX) as high as 20.55 in the past month, largely thanks to the trade war. When China announced a new round of 25% tariffs on $60 billion worth of American exports in May, the S&P 500 responded with its worst trading day in 50 years.
But volatility doesn't have to be a negative.
You see, penny stocks thrive in volatile markets because small swings in their share price can return double- and triple-digit gains to investors.
You just have to know where to look to find them. To find the gems, we unleash the Money Morning Stock VQScore™ system, which finds stocks with high growth potential.
We've used it to uncover five of the best penny stocks to buy in June - and our top pick has the potential to return over 200% to investors.
Top Penny Stocks to Buy in June, No. 5: AK Steel Holding Corp.
AK Steel Holding Corp. (NYSE: AKS) is an Ohio-based steel manufacturing company.
It runs eight steel plants in the Midwest and is a major steel supplier to the auto industry in the United States.
As the auto industry continues to grow its demand, this will have a positive impact on the company's bottom line. However, the real catalyst for growth, and the main reason this is a strong stock to buy, is the rising demand for steel globally.
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According to analysts, global demand for steel is expected to increase 1.6% over the next year, with demand rising 5% from India alone.
Plus, the trade restrictions put in place by Washington are tying up steel coming from China, which presents new opportunities for domestic steel companies like AK Steel.
This company has seen its gross profits increase by 37% over the past three years, which is a sign it knows how to make money already. But as steel demand and prices go up, so too will AK's profits.
The current share price is $2.03, and analysts are predicting as high as $5 in the next year. This represents gains of 146%.
Top Penny Stocks to Buy in June, No. 4: Xinyuan Real Estate Co. Ltd.
Xinyuan Real Estate Co. Ltd. (NYSE: XIN) is a real estate firm based in China.
It was founded in 1997 and focuses on creating retail establishments that serve middle-income consumers in the country. And with China's explosive middle class, this stock has the potential to soar.
China currently has the largest group of middle-income consumers on the planet, with more than 500 million people in this class. This is also a figure that is expected to climb to 600 million over just the next two years.
Thirty percent of China's GDP now comes from real estate development, and prices in Beijing alone have skyrocketed 54% from 2013 to 2016.
Xinyuan also runs 11 subsidiaries related to the real estate industry, like intercom installation and landscaping systems.
The stock currently trades at $4.45 per share, but this is one that can easily jump quickly as China's real estate market continues to grow.
Top Penny Stocks to Buy in June, No. 3: Just Energy Group Inc.
Just Energy Group Inc. (NYSE: JE) continues to be one of the top penny stocks to buy now.
This is a Canadian utilities company that, through its many subsidiaries, delivers renewable energy solutions to Canada, the United States, Germany, Ireland, Japan, and the UK.
The company has 4.5 million customers, and some of its affiliate companies include Tara Energy, Commerce Energy, Hudson Energy, and other regional suppliers.
Just Energy's diverse access to the market allows it to maximize its return on equity and minimize risk.
Currently, its return on equity is an astounding 540%, which shows that it has mastered the allocation of its cash flow resources. You're unlikely to find this sort of management prowess in another penny stock.
JE stock currently trades at $3.36, but it has a high price target of $9.99. This would give today's investor a potential return of 197%.
Top Penny Stocks to Buy in June, No. 2: Hi-Crush Partners LP
Hi-Crush Partners LP (NYSE: HCLP) is a Houston-based oil infrastructure company. It delivers logistical services to major oil drillers throughout the United States.
Hi-Crush is a major supplier of monocrystalline sand, which is a key material required to build an oil well. It currently makes 17.3 million tons of this material annually.
As oil drilling is booming once again, this puts Hi-Crush in the ideal position to profit from this sector. Even though oil prices have been rocky lately, they're still up 20% on the year, and oil analysts predict there will be a 2.5% increase in oil drilling this year. Drilling grew just 1.6% last year.
The shale drilling sector in the United States is expected to create 20,000 wells alone, and these wells will be relying on the specialty sand provided by Hi-Crush.
The company has boosted its gross profits by an amazing 164% over the last four years.
HCLP is trading at $2.29 per share, and analysts have given it the potential to move to $6. This represents a 162% upside.
But our top penny stock to buy in June has the highest upside of all.
That could mean tripling your money...
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Top Penny Stocks to Buy in June, No. 1: Denbury Resources Inc.
If you're looking to buy one of the best penny stocks now, Denbury Resources Inc. (NYSE: DNR) should be at the top of your list.
This is an oil and gas company based in Plano, Texas, that was founded in 1951.
It holds interests in a variety of properties throughout Texas, Mississippi, Alabama, Louisiana, and the Gulf Coast region. It also has interests in Wyoming, North Dakota, and Montana, in the Rocky Mountain region.
As of the end of 2018, Denbury held 255 million barrels of crude oil, condensate, and natural gas liquids. It also had 43 billion cubic feet of natural gas at that time.
Denbury is unique in the way that it extracts oil, using a revolutionary method called "enhanced oil recovery." This involves the use of carbon dioxide to make old wells active again, allowing the company to extract oil that would otherwise be inaccessible.
This method allows the company to use wells that have already been drilled, which eliminates the large costs that come with finding and setting up a new site. These are all savings that are passed on to shareholders.
Denbury's largest property, which reaches across North Dakota and Montana, was responsible for 25% of its daily production in the region last year.
The production levels that the company is reporting are translating to impressive bottom-line results.
Its gross profits have gone up 38% over the past four quarters, and strong growth and demand have helped the company beat earnings estimates consistently over the same period.
Denbury stock is currently trading at $1.47. Analysts have given the stock a high price target of $4.60 over the next year, which would give today's investor an astounding upside of 212%.
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