The ongoing sell-off across the markets has many investors running for the hills. But the recent downturn has pulled a number of high-upside stocks with potential to rally to all-time highs.
Among the stocks that offer tremendous upside are penny stocks. Today's penny stocks to buy – currently priced under $6 per share – give investors low-risk,high-return potential that requires little capital to get started.
Today, we're taking a look at three of the top penny stocks under $6 that are poised for big gains in the future. Our top penny stock is a chance at a 135% return…
Penny Stock to Own, No. 3 – Herzfeld Caribbean Basin Fund
Herzfeld Caribbean Basin Fund Inc. (NYSE: CUBA) is a closed-end fund with a large portfolio of stocks. It's poised to benefit from normalized relations between the United States and Cuba.
Although geopolitical tensions exist between the two countries, the portfolio includes a number of popular travel stocks that have been beaten down by the coronavirus. This portfolio includes companies like Royal Caribbean Cruises Ltd. (NYSE: RCL) and Carnival Corp. (NYSE: CCL).
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What stands out about the closed-end fund is that it pays a solid dividend and currently trades well below its net asset value. In fact, it's trading at a 15.6% discount to the sum of its parts. And its dividend is 5.4%. This might be a bit of a contrarian play at $5.35 per share. However, the NAV sits above $6.50 and has a one-year price target of $7. This price target represents a potential upside of 28.4%.
But you could lock in a 73% return with this next one…
Penny Stock to Own, No. 2 – Entercom Communications Corp.
Entercom Communications Corp. (NYSE: ETM) is a U.S.-based broadcasting company with radio networks in Philadelphia, Pa. Shares have pulled back in the last few days since the company's COO, Weezie Kramer, retired after 20 years at the firm.
The media firm currently reaches about 170 million people per month (or roughly half of the U.S. population). The firm has a robust reach across primary and secondary markets including Atlanta, Denver, Dallas, Miami, Phoenix, and Richmond, Va. At the moment, the coronavirus doesn't stand to threaten the television and radio markets.
But a positive catalyst is fast approaching that will benefit the company's advertising revenue: the 2020 election. Markets anticipate that the 2020 presidential election and down-ballot contests for the Senate and House of Representatives will generate billions of dollars in advertising spots for candidates.
In addition, ballot initiatives like legalization of recreational cannabis will pop up in dozens of states, creating an opportunity for significant advertising spend on both sides of these issues. Investors would be smart to start speculating on the 2020 election given the recent weakness in the market.
The current price target for ETM sits at $5.50 per share. That figure represents 12-month upside of 73.1%.
But you could look at this next penny stock for nearly twice that…
Penny Stock to Own, No. 1
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.