The 10 Best Penny Stocks to Buy Now in 2018

The 10 Best Penny Stocks to Buy NowPosted on Thursday, August 30th, 2018 by MarketBeat Staff

Penny stocks are notoriously unpredictable. For investors to take advantage of the rapid price movements that these stocks can make requires an understanding of technical analysis. However, when looking at many of these small-cap and micro-cap stocks, the first question for investors is “Why should I buy this stock in this company?”

To answer that question, investors need to consider some other questions including:

Are these companies promising a better mousetrap or just another mousetrap?

Does the company have a viable business model that may make them an attractive buyout target for an established company in their industry? Is the company in a sector that is currently growing?

Ideally, you want to find a penny stock that allows you to answer yes to all of those questions. These are the penny stocks that have the potential to get investors excited in the coming weeks and months and show the technical signs that point to real gains. We’ve selected 10 penny stocks that look to meet these criteria and that you should consider buying now.

Click the “Continue to Slide #2” button to view the first company.

#1 - Chesapeake Energy (NYSE:CHK)

Chesapeake Energy logo

Chesapeake Energy (NYSE: CHK) - The decision to buy Chesapeake Energy really comes down to which direction you see oil and gas prices moving. The company took it on the chin during the last downturn and was saddled with almost $10 billion in debt. However, many analysts are projecting oil and gas prices to rise through 2019, and an increase would benefit a small player like CHK more than some of the major oil companies. Lending support to that argument, CHK’s stock has posted a 15% gain for 2018 as oil prices have risen to around $70. If those prices hit the $120 mark by the end of 2019 as some analysts predict, CHK could be in for a sizable bump in price.

The company also recently announced that they were selling off some assets to reduce their debt by about $2 billion and their second-quarter earnings report gave evidence that they have a viable plan in place to replace the profit they are losing from selling those assets.

In their last earnings report, results were mixed. Year-over-year earnings were down substantially with the company posting a loss of $40 million ($0.04/per share) compared to a profit of $470 million ($0.47/per share)the year before. And total revenue fell from $2.281 billion to $2.255 billion. However, their adjusted earnings per share of $0.15 came in ahead of estimates that called for $0.14. At this writing, the stock was trending just below their simple moving average (SMA) and if it finds support it could be ready to move past its high for the year which was hit in early July.



About Chesapeake Energy
Chesapeake Energy Corporation engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids (NGL) from underground reservoirs in the United States. The company holds interests in natural gas resource plays, including the Haynesville/Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin in Pennsylvania. It also holds interests in liquids-rich resource plays, such as the Eagle Ford Shale in South Texas; the Utica Shale in Ohio; the Anadarko Basin in northwestern Oklahoma; and the stacked pay in the Powder River Basin in Wyoming. The company owns interests in approximately 17,300 oil and natural gas wells. As of December 31, 2017, it had estimated proved reserves of 1.116 billion barrels of oil equivalent. The company also provides oil, natural gas, and NGL marketing services comprising commodity price structuring, securing and negotiating gathering, hauling, processing and transportation, contract administration, and nomination services for Chesapeake-operated wells; and marketing services for third-party producers. Chesapeake Energy Corporation was founded in 1989 and is headquartered in Oklahoma City, Oklahoma.

Current Price: $3.20
Consensus Rating: Hold
Ratings Breakdown: 3 Buy Ratings, 8 Hold Ratings, 4 Sell Ratings.
Consensus Price Target: $5.1083 (59.6% Upside)

#2 - Mid-Con Energy Partners LP (NASDAQ:MCEP)

Mid-Con Energy Partners logo

Mid-Con Energy Partners LP (NASDAQ: MCEP) - Mid-Con Energy Partners illustrates the risks for small-cap companies in the oil and gas sector.  In 2013, this company’s stock was up to $27 per share. But when oil prices cratered from 2014-2016, Mid-Con’s stock cratered with it, moving into penny stock territory. At one point it was selling for as low as $0.73 per share. Even with oil prices rising, the stock has struggled to find a lift, trading around $1.75 per share.

However, the stock has achieved a gain of over 42% for the year while revenues are forecast to hold steady below $60 million through 2019. What isn’t clear is if those estimates are accounting for higher oil prices. When oil was trading at $120 per barrel, Mid-Con’s stock price held steady in the 20’s, so if crude makes a leap from its current price at around $70, Mid-Con could be a good long play in the penny stock arena.



About Mid-Con Energy Partners
Mid-Con Energy Partners, LP engages in the ownership, acquisition, and development of producing oil and natural gas properties in North America. The company's properties are primarily located in the Mid-Continent and Permian Basin regions of the United States in Oklahoma and Texas. As of December 31, 2017, its total estimated proved reserves of approximately 19.6 million barrel of oil equivalent. Mid-Con Energy GP, LLC serves as the general partner of Mid-Con Energy Partners, LP. The company was founded in 2011 and is headquartered in Tulsa, Oklahoma.

Current Price: $1.01
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#3 - Advantage Oil and Gas Ltd. (NYSE:AAV)

Advantage Oil & Gas logo

Advantage Oil and Gas Ltd. (NYSE: AAV) - For investors who are looking for a more proven player in the oil and gas sector, Advantage Oil and Gas is a compelling choice. In its second-quarter earnings report, the company showed a year-over-year decline on both the top and bottom lines which is creating downward pressure on the stock. However, in the first quarter, the company’s profit margin was 29%, well above the industry average of 6.1%. And that profit shows no signs of slowing due to the juice that’s driving up demand for Canadian oil such as the Iran sanctions and forecasted production issues in South America. In fact, analysts are forecasting the Canadian oil industry as a whole to register a $1.4 billion profit in 2018.

Forecasts like that are contributing to Advantage receiving a forward price target of $5.90. The stock is currently trading at approximately $3.10.



About Advantage Oil & Gas
Advantage Oil & Gas Ltd., together with its subsidiaries, acquires, exploits, develops, and produces natural gas in the Province of Alberta, Canada. The company primarily focuses on the development and delineation of its Montney natural gas and liquids resource that includes 200 net sections of land in Glacier, Alberta. It provides natural gas and natural gas liquids primarily through marketing companies. The company was founded in 2001 and is headquartered in Calgary, Canada.

Current Price: $2.50
Consensus Rating: Buy
Ratings Breakdown: 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $5.25 (110.0% Upside)

#4 - Castle Brands (NYSE:ROX)

 logo

Castle Brands (NYSE: ROX) - Castle Brands may be a case where the market has already set a floor for its stock. If that's the case, there are reasons to think that the stock may be due for a run. First, it has two compelling product offerings with its Dark & Stormy drink made from its Gosling brand of Black Seal dark rum and ginger beer and it's Jefferson bourbon brand that continues to anchor their whiskey portfolio that has increased their revenue by 20% in 2018. Their profit remains weak, but their margins have increased over the last couple of years and revenue continues to increase. The company has 166 million shares outstanding which could create some downward pressure on the stock. However, 30% of those outstanding shares are owned by company insiders signaling that management is confident of the company's prospects.

Castle Brands looks to be a target for acquisition down the road. But with the stock trading within a tight range, it seems that if it’s going to break in one direction, it would be up. 



About


Current Price: $0.00
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#5 - Sportsman’s Warehouse (NASDAQ:SPWH)

Sportsman

Sportsman’s Warehouse (NASDAQ: SPWH) - With a trailing P/E ratio that is significantly below the S&P 500 at 11.5 and same-store sales growth of 3.4% in the first quarter of 2018, Sportsman’s Warehouse is giving off some strong technical vibes that say it is undervalued. However, analysts are looking at their sales numbers with a little skepticism. While the company showed a profit in its most recent earnings statement, its earnings per share (when calculated with GAAP standards) was $0.15, unchanged on a year-over-year basis. Revenue growth that is not matched by earnings growth may be a sign that the company is increasing expenses which may explain why the company has not been growing along with the specialty retail sector. Still, the company is projecting strong revenue and EPS numbers for the remainder of 2018 which should provide support for the stock’s recent movement.

In large part due to their positive earnings report, the stock has moved past its simple moving average and still has room before it would hit its 52-week high. The stock is trading at 7x next year’s consensus EPS.



About Sportsman's Warehouse
Sportsman's Warehouse Holdings, Inc., together with its subsidiaries, operates as an outdoor sporting goods retailer in the United States. It offers camping products, such as backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents, and tools; and clothing products, including camouflage, jackets, hats, outerwear, sportswear, technical gear, and work wear. The company also provides fishing products comprising bait, electronics, fishing rods, flotation items, fly fishing products, lines, lures, reels, tackles, and small boats; and foot wear products consisting of hiking and work boots, socks, sport sandals, technical footwear, trial and casual shoes, and waders. In addition, it offers hunting and shooting products, such as ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, firearms safety and storage products, reloading equipment, and shooting gear products; and optics, electronics, and accessories, including gift items, GPS devices, knives, lighting, and optics. Further, the company's stores provide archery technician services, fishing-reel line winding, gun bore sighting and scope mounting, and other services, as well as issues hunting and fishing licenses. Additionally, it offers various private label offerings under the Rustic Ridge, Killik, Vital Impact, Yukon Gold, Lost Creek, and Sportsman's Warehouse brands. As of May 5, 2018, the company operated 89 retail stores in 22 states. Sportsman's Warehouse Holdings, Inc. was founded in 1986 and is headquartered in Midvale, Utah.

Current Price: $4.60
Consensus Rating: Buy
Ratings Breakdown: 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $6.8333 (48.6% Upside)

#6 - Limelight Networks (NASDAQ:LLNW)

Limelight Networks logo

Limelight Networks (NASDAQ: LLNW) - Any decision to buy Limelight Networks should be based on where you feel the future of streaming content is headed. Limelight creates Content Delivery Networks (CDNs) that help companies ensure efficient, customizable performance and content availability. According to industry analysts, CDNs will carry 71% of the total internet traffic by 2021. That's a significant increase from the 52% they carried in 2016. This is due, in large part, to the demand for streaming content without buffering. That's where the CDN comes in. However, the industry faces a threat to their clients such as Facebook and Netflix seek to create their own CDNs so they can control their internet speeds and bandwidths. However, that threat seems to be abating for the moment, which is good news for Limelight which has seen a 14% increase in revenue for the first half of 2018. The stock is trading right around $4.85 per share and recently broke above its 50-day SMA.



About Limelight Networks
Limelight Networks, Inc. provides content delivery and related services and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers services and solutions for businesses to deliver their digital content across Internet, mobile, and social channels. It provides Orchestrate Platform, a suite of integrated services comprising content delivery, video content management, Website and Web application acceleration, Website and content security, and cloud storage services. The company also offers professional services and other infrastructure services, such as transit and rack space services. It serves media companies operating in the television, music, radio, newspaper, magazine, movie, game, software, and social media industries, as well as enterprises, technology companies, and government entities conducting business online. Limelight Networks, Inc. was founded in 2001 and is headquartered in Tempe, Arizona.

Current Price: $3.24
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $6.30 (94.4% Upside)

#7 - Plug Power (NASDAQ:PLUG)

Plug Power logo

Plug Power (NASDAQ: PLUG) - The definition of insanity is doing the same thing in the same way and expecting a different result. So investors should be encouraged that Plug Power is trying something different to generate shareholder value for its stock. Although clean energy has faced consistent headwinds in generating an ROI for investment capital, the hydrogen fuel cell developer is looking to change that narrative. Plug Power signed contracts with Amazon last year and joined forces with FedEx in May. This was on top of the deal they have had in place with Walmart since 2014. Why are these deals significant? Companies like Amazon are eager to use an alternative power source to increase the production speed of their forklifts to minimize downtime.

They remain unprofitable, but their revenue is growing (it was up 90% year-over-year in Q1 of 2018) and they could be on the verge of a breakthrough as their stock is looking to cross above its SMA.



About Plug Power
Plug Power Inc., an alternative energy technology provider, engages in the design, development, commercialization, and manufacture of hydrogen and fuel cell systems for the material handling and stationary power markets primarily in North America and Europe. It focuses on proton exchange membrane (PEM) fuel cell and fuel processing technologies, fuel cell/battery hybrid technologies, and related hydrogen storage and dispensing infrastructure. The company offers GenDrive, a hydrogen fueled PEM fuel cell system that provides power to material handling electric vehicles; GenFuel, a hydrogen fueling delivery, generation, storage, and dispensing systems; GenCare, which is an ongoing maintenance program for GenDrive fuel cells, GenSure products, GenFuel products, and ProGen engines; and GenSure, a stationary fuel cell solution that provides scalable modular PEM fuel cell power to support the backup and grid-support power requirements of the telecommunications, transportation, and utility sectors. It also provides GenKey, a turn-key solution for transitioning to fuel cell power; ProGen, a fuel cell stack and engine technology that is used in mobility and stationary fuel cell systems, and as engines in electric delivery vans; and GenFund, which offers financing solutions to customers. The company offers its products to distribution and manufacturing businesses, and government agencies through direct product sales force, original equipment manufacturers, and dealer networks. Plug Power Inc. was founded in 1997 and is headquartered in Latham, New York.

Current Price: $1.75
Consensus Rating: Buy
Ratings Breakdown: 6 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $3.50 (100.0% Upside)

#8 - DHX Media (NASDAQ:DHXM)

DHX Media logo

DHX Media (NASDAQ: DHXM) - In the world of digital media, content is king. And that may give investors a bit of optimism as they consider DHX Media. The stock has been battered this year. However, after falling 35%, it may have found a bottom. It’s currently trading right around its simple moving average. The company has taken some positive steps to add to their status as the world’s largest independent library of children’s content by acquiring the intellectual property of Peanuts. This is in addition to its portfolio which already includes Teletubbies, Inspector Gadget,Strawberry Shortcake and Yo Gabba Gabba! After acquiring Peanuts, they promptly sold 39% of their stake to Sony. This not only helped reduce debt, but it gave them the support of a high-quality partner. DHX Media would be a sector play for sure. As more consumers look to cut the cord and move to digital and streaming media, there are opportunities.



About DHX Media
DHX Media Ltd. develops, produces, distributes, broadcasts, and licenses television and film programs for conventional and specialty terrestrial and cable/satellite television broadcasters worldwide. The company operates through three segments: Content Business, DHX Television, and Consumer Products Represented. It focuses on children's, youth, and family productions; offers animation programs; and provides production services. The company also sells initial broadcast rights; the packages of programs; and reuse rights to existing series to individual broadcasters and other content exhibitors, as well as pre-sells series in development. In addition, the company holds broadcast licenses for Family Channel, Family Jr., Télémagino, and Family CHRGD television channels; and exploits the company's own and third party brands in toys, games, apparel, publishing, and other categories. Further, it licenses its brands, such as Peanuts, Strawberry Shortcake, Teletubbies, Yo Gabba Gabba!, Caillou, Johnny Test, In the Night Garden, and Twirlywoos, as well as music publishing and retransmission rights, and live tours. The company was formerly known as The Halifax Film Company Limited and changed its name to DHX Media Ltd. in March 2006. DHX Media Ltd. was incorporated in 2004 and is headquartered in Halifax, Canada.

Current Price: $2.29
Consensus Rating: Hold
Ratings Breakdown: 0 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: N/A

#9 - Arotech Corporation (NASDAQ:ARTX)

Arotech logo

Arotech Corporation (NASDAQ: ARTX) - The defense industry may seem like a strange place to find a penny stock, but Arotech fits the bill. It has a market cap of $88 million, but it operates in many countries and counts among its competitors some of the big boys like General Electric and Honeywell. In terms of fundamentals, the stock has a forward P/E ratio of 13 which may be low if they can start to accelerate their growth. Their revenue in 2017 was $98.72million, almost $5 million less than their 2014 revenue. And when you consider the company was founded in 1990, it has taken a long time to get where they are. In 2017, the company earned a profit of 17 cents per share. Forecasts project their profit per share to increase to 18 cents per share in 2018 and up to 26 cents per share in 2019. Much of this enthusiasm may have to do with the forecast for more defense spending from the Trump administration.

Arotech’s stock has shown a year-to-date gain of nearly 12%. The stock is currently trading around $3.40 and is positioned just below its 20- and 50-day SMA.

About Arotech
Arotech Corporation provides defense and security products worldwide. The company's Training and Simulation division develops, manufactures, and markets multimedia and interactive digital solutions for engineering, use-of-force training, and operator training of military, law enforcement, security, emergency services, and other personnel. This division offers simulators, systems engineering support, and software products for training vehicle operators to the United States military, government, municipalities, and private industry; weapon simulations used to train military pilots, weapon employment information used in air launched weapons, and part-task simulators to train aircrew; specialized use-of-force training simulators and systems for police, security personnel, and the military under the MILO Range trade name; and consulting and development support services under the Realtime Technologies trade name. Its Power Systems division provides electronics engineering and design, system integration, rapid prototyping, and vertically production services for military, aerospace, and industrial customers, including hybrid power generation systems, smart power subsystems for military vehicles and dismounted applications, and aircraft and missile systems support for weapons and communications technologies. This division also develops and sells rechargeable and primary batteries, and smart chargers to the military and medical markets, and to private defense industry under the Epsilor name. In addition, it develops, manufactures, and markets primary batteries, rechargeable batteries, and battery chargers for the military; and produces water-activated lifejacket lights for commercial aviation and marine applications under the Electric Fuel name. The company was formerly known as Electric Fuel Corporation and changed its name to Arotech Corporation in September 2003. The company was founded in 1990 and is based in Ann Arbor, Michigan.

Current Price: $2.69
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#10 - mCig Inc (OTCMKTS:MCIG)

mCig logo

mCig Inc. (OTCMKTS: MCIG) - We round out our list of ten top penny stocks with a pure speculative play in one of the most debated sectors: the cannabis industry. The question investors have to ask regarding mCig is if they see the current trend towards legalizing marijuana to become a reality in all 50 states. mCig is a marijuana cultivation construction company, which means they help build the greenhouses and other infrastructure that growers need to produce their product. Currently, the number of licenses issued in a particular state is severely limited. That’s what drives mCig’s potential. However, several states that have made marijuana legal are already loosening their restrictions, increasing competition and driving down the price of marijuana, causing some growers to go out of business.

However, if you’re just looking at a short-term play, mCig can be an intriguing option. The company reported earnings of$4.78 million in the fiscal year 2017, up from $1.72 million in 2016. And their profit was $1.53 million. Already in 2018, the company has brought in over $6 million in revenue. That’s a nice trend, but it has yet to be reflected in the stock price, which is still below $0.25 cents a share and is down about 28% for the year.



About mCig
mCig, Inc. operates in the cannabis industry in the United States and internationally. The company operates through four segments: Cultivation, Manufacturing and Distribution (CMD); Retail Sales; Media and Technologies; and Agriculture. The CMD segment designs, develops, engineers, and constructs modular buildings and green houses that assist cannabis and herbal growers in the market, as well as offers consulting services in the cannabis industry. The Retail Sales segment engages in the retail, distribution, and online sale of electronic cigarettes, CBD products, and vaporizers, as well as supplies for cannabis distributors, growers, and dispensaries. The Media and Technologies segment operates 420cloud, a social platform for advertising services in the cannabis and cryptocurrency markets; and provides software solutions, Website development, and other social media services. The Agriculture segment is involved in planting and growing industrial hemp. mCig, Inc. offers financial and consulting services to cannabis and cryptocurrency markets. The company was formerly known as Lifetech Industries, Inc. and changed its name to mCig, Inc. in August 2013. mCig, Inc. was founded in 2010 and is headquartered in Las Jacksonville, Florida.

Current Price: $0.22
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

Not all penny stocks are the same. Some are startups. Some are established companies that have weathered some hard times. Some are niche players in established industries. The important thing to remember as an investor is that there is a reason why their stock is trading at a low price. If you understand why and are willing to accept the risk that can come from waiting on a reward that may not materialize, then penny stocks can be an attractive addition to your portfolio.

Here are a couple of tips for selecting the right penny stocks for your portfolio:

Do your homework. This industry is rife with fly-by-night companies promising to be the latest “hot stock or industry”. If the fundamentals don’t match the promises, it’s prudent to wait.

It may be a good idea to only focus on sectors where you have a good knowledge base. That will make it easier to tell the contenders from the pretenders. You can use a screening service to give you a list of potential penny stock investments in a sector to help you narrow down your search



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