If anything can be called "good" news while coronavirus fear tanks the market, current stock lows could double or triple your money a few months down the road.
Our top penny stock to buy today is one of those, with 227% profit potential this year.
The CBOE Volatility Index - or "Fear Index" - is above 70. It hasn't gone higher than 30 since 2011.
Record-high volatility means stocks could soar or dive day to day. The Dow Jones Industrial Average might lose 2,000 points one day (like on Wednesday, March 11), and then it might correct by adding 1,000 the next (like on Thursday, March 12).
Penny stocks are especially sensitive to these shifts because they trade for less than $5 a share. A move of a couple bucks could be 100% or more of the stock's price.
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But penny stocks are considered speculative investments.
If you're considering penny stock investing, you might fall into the "bullish" camp of investors. There is opportunity for huge gains here. But as the reward is multiplied, so is the risk in these volatile moments.
Before penny stock investing, do a quick "gut check" and assess your risk tolerance. If you decide you want to proceed, we're onto one of the best penny stocks to buy right now.
Why This Penny Stock Is Undervalued
One of the hardest-hit industries in the last few weeks has been the energy industry. And limited travel is only part of the story.
As a consequence of coronavirus travel bans, OPEC - the cartel of petroleum exporters led by Saudi Arabia - took measures to limit supply to keep oil prices afloat.
Unfortunately, they couldn't see eye to eye with fellow OPEC member Russia.
Supply wasn't cut according to plan. Instead, Russia and Saudi Arabia entered a price war, driving oil stocks even further down than before.
This was bad news for our top penny stock today. It's lost 66% of its price since the start of the year.
But bullish investors might see this as enormous upside in a few months. More will become known about the virus over the next few weeks. As its spread is contained, the panic may subside, and travel may recover.
That's what keeps analysts believing in a 227% price target for this penny stock on the year...
The Top Penny Stock to Buy Right Now
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Marathon Oil Corp. (NYSE: MRO) was trading above $13 at the start of January. And it hit a sort of "fire drill" scenario in the last few weeks with coronavirus and OPEC debacles.
Marathon stock has dipped as low as $3 over the last few days.
But you're reading this because you still see opportunity down the road. And there are worse decisions than investing in oil when it's down 46%.
Oil is still a much-needed commodity, whether or not the coronavirus "blows over" in a few months.
Marathon has been taking all the right steps in responding to the outbreak. The company already had solid liquidity to begin with. It finished 2019 with $3.9 billion in liquidity and no debt maturing before 2022.
The company is cutting costs to make even more room right now. It recently announced a $500 million cut to its capital expenditure.
Its initial plan was to spend $2.4 billion on capital in 2020, 30% less than the $2.59 from last year. That is now down to $1.9 billion.
This was a proactive move on the part of Marathon's front office, and it's going to help protect its bottom line over the next few months.
Marathon had profits over $1 billion for 2018, when oil averaged $64.90 per barrel. Last year, when oil took a dip to $57.05 and geopolitical tensions began to escalate, Marathon took in half that.
The next few months will be difficult for Marathon. But leadership has shown some proactive decision-making in this rough patch. Oil is still necessary, and demand can only soar higher when things get better.
If buying MRO stock for $4.22 right now is your move, you're probably not alone. The average analyst is shooting for $14.24 by the end of the year. That's a potential 227% return for today's investor.
Action to Take: Oil could tank around 50% in the most volatile time for stocks in the last decade. And our top oil stock has dropped 66% in the last three months. But oil will continue to be necessary, and this company is doing everything it can to protect its balance sheet. You can buy Marathon Oil Corp. (NYSE: MRO) stock for $4.22, for 227% profit potential this year.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.