This Is the Top Penny Stock to Buy This Week

It's the Q3 earnings season, and with hints of a recession and trade tensions with China, Wall Street is worried about the risks large companies may face.

However, there's still potential in the top penny stock to buy this week.

You see, economic concerns focus on large firms like Goldman Sachs Group Inc. (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM), and Morgan Stanley (NYSE: MS) not hitting their Q3 target earnings.

Earnings reports correlate with volatility increasing. On average, 80% of a stock's annual movements happen during the seasons when earnings are reported.

When markets get volatile, penny stocks benefit from low share prices. Small price movements often result in large percentage gains. Even a $0.10 move on a $1 stock can result in a 10% gain.

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Of course, investors should know penny stocks can be risky. And their share prices could move down as well.

Fortunately, the rewards could be much greater than the risks. And we have one of the best penny stocks to buy this week that's poised to grow as much as 100%.

But before we show you our top penny stock this week, here's how to find the best penny stocks...

Here's How to Choose the Right Penny Stocks

How can you know what the top penny stocks to buy this week are? After all, there are thousands of penny stocks.

To uncover the best penny stocks, we look at Money Morning Stock VQScore™. Our VQScore system scans thousands of equities and rates them on their breakout potential.

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Then, we screen again to find the best penny stocks (those trading at or below $5) on the list.

And our top penny stock to buy this week could get a boost of more than 100% from volatility in the market.

The Best Penny Stock Now

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Our best penny stock is Resolute Forest Products (NYSE: RFP). RFP is a supplier of wood-derived products like pulp, paper, and various specialty papers worldwide.

Resolute supplies these products in more than 70 countries, focusing on high quality while minimizing any environmental concern.

As a result, it's one of the biggest sustainable paper goods providers globally. It's currently one of the biggest newsprint suppliers in the world as well.

RFP's worldwide position and sustainability have provided it with benefits. These include its ability to reduce waste and optimize profits, especially over the last three years.

RFP increased sales by 7% from 2017 to 2018. And it was profitable for the first time in six years, with $235 million of profit last year. Operating cash flow also rose 175%.

For investors, one of the company's best qualities is its relative lack of visibility on Wall Street. In fact, its good qualities are precisely the kind of thing our VQScore system will uncover.

Currently, RFP shares sell for $4.64. Wall Street analysts forecast they could climb to $8 over the next year, a potential gain of 72.4%.

We think it could rise even higher.

That's because RFP currently has just a 1.8 price/earnings (P/E) ratio. That's a little more than 50% of its P/E average last year.

If the P/E recovers to its 2018 level, shares could be boosted 100%. And the company's business is doing well enough that a double in price is a distinct possibility.

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