It can sometimes be challenging to separate the best penny stocks to buy from the trash in the market.
But there are undeniably some fantastic companies offering massive upside right now. One example is our top penny stock today, with 257% return potential, which we're about to show you...
There are several ways to uncover the real gems that can soar by several multiples of the current stock price. We are always looking for ways to discover the overlooked companies with bright futures that are temporarily trading for less than $5 a share.
One of the easiest and most effective ways to find the top penny stocks is to watch for big insider purchases in the open market.
Buying in the open market means somebody wrote a check with their own money to buy shares of the company they run.
Insiders know more than anyone else on the planet about what is going on at the company they manage or oversee. If they are buying big, it could mean they expect huge gains in the stocks.
Here are some of the best penny stocks today that have caught a wave of insider buying...
Tech Penny Stock with Insider Interest
Net 1 UEPS Technologies (NASDAQ: UEPS) is in the payments business in South Africa and South Korea, with a presence in other international markets. In its latest earnings release, management said that it would be focusing its efforts on the core South African markets in the future.
In South Africa, Net 1 is one of the leading independent transaction processors, the national provider of social welfare payment distribution services to the country's large unbanked and under-banked population, the largest third-party processor of retail merchant transactions, and the leading processor of third-party payroll payments.
Antony Ball is considered the founding father of the South African private equity industry.
He founded and built Brait, the premier private equity firm in South Africa. He currently serves as the non-executive Chair of Value Capital Partners.
He is also a director of Net 1, and he must like what sees developing at the company. Mr. Ball has spent about $5.5 million buying shares of the company in the open market in the past month.
As a private equity investor, Antony Ball is looking to make several times what he is investing ins shares of Net 1. By jumping in alongside him, we can position ourselves to share in these huge gains.
This penny stock trades for $3, while analysts give it a 12-month target of $5, or 66% gain for today's investor.
Our next penny stock could grow more than 100%...
Biotech Penny Stock Ready to Double
Selecta Biosciences Inc. (NASDAQ: SELB) is a biotech company working on drugs that deal with immune system response.
One of the company's directors is Timothy Springer, an immunologist and professor at Harvard Medical School. He is also a Resident Professor at Pfizer and a founding investor in Moderna Inc. (NASDAQ: MRNA) and Editas Medicine Inc. (NASDAQ: EDIT).
In the last month, Springer has been buying shares of Selecta in the open market. And he kept buying shares even as the stock price moved higher.
I am not a scientist. I have no idea how Selecta's drugs work.
I do know that a noted immunologist who has made a fortune buying into other biotech companies spent almost $20 million of his own money buying shares of the stock.
He is on the board and knows precisely how the drugs work and their potential. If he is buying aggressively, we probably should as well.
The stock trades for $3 right now, but the average analyst is targeting $6.71 over the next 12 months. That would represent a gain of 123% for today's investor.
Now, here's our best penny stock to buy today with 257% potential...
Best Penny Stock to Buy Now
Tanker stocks have given investors quite the ride so far this year.
The pandemic started prices soaring with curtailed oil demand. But shippers have come falling back to earth since then. That's good news for one penny stock...
Nordic American Tanker Ltd. (NYSE: NAT) soared for a moment, then it took the ride back down. But I think the fiscal discipline required by its new debt agreement will lead to considerable improvements in the company finances, and the stock should move a lot higher.
The new agreement is with Beall Bank. Without going into too much of a history lesson, Beal Bank is known for financing industries others avoid. Beal has a long history of successfully bottom fishing out-of-favor industries.
I suspect this will be the case for the tanker industry as well. Lima Burke, an analyst at B. Riley Financial Inc. (NASDAQ: RILY), noted last week that "With stronger balance sheets and shrinking fleet capacity, tanker sector fundamentals are strong despite near-term challenges related to the COVID-19 driven global recession."
As part of the agreement, Nordic American has to maintain higher cash reserves, pay down debt, and prepay operating expenses before it can pay dividends.
In the past, Nordic has paid massive dividends. But for the foreseeable future, they will be a lot lower.
The balance sheet will be a lot stronger.
The people that founded Nordic American and still run the company like what they see.
Founder and CEO Herbjorn Hansson and his family members have been buying more than $200,000 worth of stock almost every month recently.
When conditions improve for the tanker industry, a financially stronger Nordic American could easily see its stock explode to five times or more the current price.
Three Stocks We Like Even More Than NAT
Our Shah Gilani just named three stocks he says are "screaming buys" right now.
All three are trading at a discount... are under-the-radar companies most people haven't even heard of... and have massive tailwinds with the potential to make their prices skyrocket.
Go here to watch Shah give you the company names, tickers, and price targets for three stocks that belong in EVERY portfolio.
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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.