3 Penny Stocks to Buy for 134% Profit Potential

Finding an undiscovered low-priced stock can be exciting and wildly profitable. Penny stocks have also been the source of massive profits for those who find the gems with life-changing potential.

And we're going to show you our three best penny stocks to buy today.

Of course, there are thousands of penny stocks out there. But there are some tricks and tools we can use to make the search easier.

One way to uncover those low-priced stocks is to track insider buying. Decades of research and real-world results have proven time and again that insiders have an edge. And piggybacking their trades can be a source of incredible profits.

The people running the company only have one reason to buy more stock in the companies they run. They have a strong belief that the stock price will go a lot higher and make them wealthier. We can grow our own cash pile by following their lead.

Our best penny stock today could pop 134%. Here's the first one...

Penny Stock to Buy No. 3: ServiceSource International

ServiceSource International Inc. (NASDAQ: SREV) provides a suite of cloud applications for service revenue management. Its customers include some of the biggest tech companies, including Cisco Systems Inc. (NASDAQ: CSCO) and Dell Technologies Inc. (NASDAQ: DELL). Its applications are used by companies in some of the hottest areas of the market place, including Cloud Computing, Software as a Service companies, data centers, and the Industrial Internet of Things.

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Analysts expect to see earnings explode over the next five years, with growth averaging around 25% annually. That should drive the stock a lot higher than today's bargain-basement price level. The CEO certainly thinks that is going to happen. He recently made a six-figure open market purchase to increase his ownership of the company. One of the company's largest outside investors, Edenbrook Capital, has also been a large buyer of the stock in recent weeks.

Making big money in low-priced stocks can often be as simple as following the money. When the insider and big money moves into a low-priced stock, jumping on the bandwagon can make a lot of money.

This next penny stock is another example. We'll get to our 134% gainer in a moment.

First, this stock could pop 54% in a few months' time...

Penny Stock to Buy No. 2: Entercom Communications

Entercom Communications Corp. (NYSE: ETM) is in the radio business. This company has also seen strong buying by the people running the company in the past few months. The company currently owns 234 news, sports, and music radio stations across the country. Entercom also has a digital platform and sells tickets to live entertainment events around the United States. The digital platform, Radio.com, has been the fastest-growing digital audio platform in the country and now delivers over 40 million users.

The first quarter saw a drawback in ad spending and will likely see a further decline in the second quarter. The sports radio outlets have been hit the hardest as sports ground to a halt in 2020.

If you want to have a good laugh right now, tune in to sports radio and listen to the anchors trying to fill airtime. All of that should change by the third quarter as sports come back to life. Ad spending will pick up as the economy continues to recover. More importantly, election-related advertising should provide a significant boost in revenue.

The people running the company clearly think the stock price is too low right now. Since March, we have seen some directors, the CEO and chair, loading up on shares in the open market.

The upside for Entercom is significant over the next few years. As recently as 2018, this was a $12 stock. Recovering just half the ground lost would more than double our money from this level.

Analysts say Entercom could reach $3.50 from its current price of $2.26. That's a 54% pop for today's investor.

But that's less than half of what our top penny stock could reel in. Our best penny stock today has 134% profit potential...

Penny Stock to Buy, No. 1

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S&W Seed Co. (NASDAQ: SANW) is in the seed business. The company sells alfalfa and sorghum seeds. It also offers wheat germplasm that helps farmers produce higher-yielding crops. S&W does business in 30 countries around the world. The company recently expanded its operation in Australia by buying Pasture Genetics Pty Ltd., the third-largest pasture seed company in Australia.

Since the pandemic rocked markets back in March, several officers and directors stepped up to make open market purchases of S&W Seed. Buyers have included directors of the company as well as both the CEO and CFO. Famed investor Michael Price, who used to manage the Mutual Shares funds, has owned the stock for years. The second-largest shareholder, Wynnfield Small Cap Value Partners, was also a buyer last month.

This company would be a good fit for any number of larger agricultural companies. I will not be surprised to see S&W sold to a larger company at some point in the near future. That would be for several multiples of the current stock price.

The stock trades for $2.27 right now. But analysts give it a $5 target over 12 months. That's 134% gain for today's investor.

Action to Take: Look into penny stocks that insiders are buying up. It's usually a good indicator that the stock price will appreciate soon. Check out shares of S&W Seed Co. (NASDAQ: SANW) for $2.27. Analysts are giving it a $5 target - 134% gain over a short period.

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