Penny Stocks to Buy During the Coronavirus Sell-Off

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

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Liquidity Services Inc. (NASDAQ: LQDT) is our top penny stock to buy for this week. The company operates a number of B2B marketplaces that allow users to engage in trade across more than 500 product categories.

The firm's online auction sites include Liquidation.com, GovDeals.com, Network International, IronDirect, and Machinio. It provides services to more than 3 million users in roughly 200 nations and territories.

The company allows firms to sell surplus or underused machines, equipment, materials, vehicles and other inventory.

U.S. markets are under pressure from the coronavirus and companies facing financial challenges ahead of a potential recession. That could make Liquidity Services extremely busy in the near future. Companies will look to use this firm's services to sell excess supplies in order to raise cash, pay bills, and reduce costs.

One of the other major factors that make this stock a buy: LQDT Chairman of the Board and CEO William Angrick purchased more than $250,000 in stock last week. Insider buying is an important, positive catalyst for stocks. Who better knows the future of the company and its performance than its leaders?

Shares of LQDT stock currently trade for $4.25. However, we have a one-year price target of $10. That price target represents more than 135% from today's current prices.

Action to Take: The coronavirus is sending many stocks to new lows. But it's created an opportunity to pick up some stocks at a discount. Liquidity Services Inc. (NASDAQ: LQDT) is down with the broader market right now. But if you pick it up today, it may help you brave the current downturn for 135% profit potential.

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About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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