The United States and China struck a "phase one" trade deal last week, and China announced it was dropping tariffs on hundreds of U.S. imports this weekend. That's the kind of catalyst that can send stocks shooting higher, and we've found just the one. In fact, it's the best penny stock to watch this week.
There's one Chinese company that was already on its way up, trade deal or not.
And with positive U.S.-China trade developments raising the broader market tides, it only accelerates this stock's growth potential.
That's why this penny stock is on pace to grow 153% in just 12 months.
You see, because penny stocks trade under $5 a share, their share prices are susceptible to giant percentage leaps on small movements in price. So finding an event that is lifting stocks can lead to big profits from penny stocks.
For example, when the Dow Jones hit the 28,000 mark, a record high, back in November, the penny stock Senmiao Technology Ltd. (NASDAQ: AIHS) flew 268%.
And that's no coincidence. It happens all the time with penny stocks.
The only thing reason every investor doesn't profit from penny stocks is that there are thousands of them and only a few are worth owning.
Lucky for us, the Money Morning Stock VQScore™ can quickly process the financials underlying those thousands of stocks. It uses a proprietary algorithm to scan the stocks and score them from 0 to 4.9. Stocks receiving a score of 4 or higher have the best breakout potential.
After that, it's simple. We arrive at our best penny stocks by looking at the top scorers and selecting the top stocks trading under $5 a share.
Our best penny stock today has a perfect VQScore of 4.9. And that tells us it's right on track to meet analyst expectations of 153% growth.
The Best Penny Stock to Watch This Week
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What keeps this company strong through all the trade war ups and downs is that it focuses exclusively on its Chinese customers.
Qudian Inc. (NYSE: QD) provides credit to Chinese consumers. And it's powered by China's growing middle class population. It's about 500 million people, estimated to be about one-third of China's population. But it's projected to grow to 600 million.
China's population has created a strong retail market. In 2018, the retail sector grew to $6 trillion, which was a 400% boost from 2010.
By 2023, China will have surpassed the United States in retail sales by a more than $4 billion margin, at $6.4 billion. This growth is inevitable as the Chinese population booms. And a company helping finance that expansion could be making a killing.
Qudian has seen its net income grew 275% from 2016 to 2017, from $576 million to over $2 billion. And it's on pace to close the year at $3.1 billion. That's to say this company has already been cashing in on China's growth, and there's plenty more to come, especially with the trade war winding down.
Wall Street analysts give it a 153% growth target of $11.91 from its current price of $4.70.
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