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Top Penny Stocks To Buy 2017

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Top Penny Stocks To Buy 2017

Penny stocks can hand you triple-digit profits in a matter of months, but finding the biggest gainers isn't easy. Today, we're going to show you the three best penny stocks of 2017, ranked by total return since Jan. 1.

The third biggest penny stock gainer on our list is Medical Transcription Billing Corp. (Nasdaq: MTBC), an information technology (IT) company that operates in the healthcare sector. The stock price has surged 304.5%, to $2.93, this year.

The biggest news surrounding MRNS stock in 2017 is the successful clinical trials for its epilepsy treatment Ganaxolone in September. The drug is in phase 2 trials, where most patients have shown a reduction in seizure frequency. Ganaxolone specifically treats CDKL5 disorder, a severe and genetic form of epilepsy that results in early onset seizures.

Shares of biotech AVEO Pharmaceuticals Inc. (Nasdaq: AVEO) have exploded 427.8%, to $2.85, this year. About 290% of that total 2017 return has happened since June 23, when the firm received a big drug approval in Europe.

The company failed to receive U.S. FDA approval for the drug back in 2013, but it has a phase 3 trial set to finish up in the third quarter of 2018. Tivozanib's approval in Europe could boost AVEO's bottom line next year, which is why AVEO will stay on our 2018 stocks to watch list.

But as we mentioned, we don't recommend investing in any of them. They've already seen triple-digit gains this year, and our Money Morning experts focus on finding stocks with gains in front of them.

(the Priorities Letter). This letter provides information about areas FINRA plans to review in its 2017 exams based on observations from our regulatory programs as well as input from various stakeholders, including member firms, other regulators and investor advocates. Firms have told us they find the annual Priorities Letter useful in reviewing their compliance and supervisory programs and framing issues to address in their internal training and communications.

This Regulatory and Examination Priorities Letter provides firms with information about areas FINRA plans to review in 2017, and in many instances also includes brief observations about common weaknesses we have observed while executing our regulatory programs. Firms can use this letter to identify priorities applicable to their business and to strengthen their compliance, supervisory and risk management controls to protect investors, the markets and themselves.

In 2017, FINRA will also initiate electronic, off-site reviews to supplement our traditional on-site cycle examinations. This program will enable FINRA to review selected areas, typically those covered in this letter, without going on site to the firm. Instead, FINRA will make targeted and limited information requests to firms and then analyze responses off site. We will conduct these off-site exams only on a select group of firms that are not currently scheduled for a cycle exam in 2017.

Additionally, we developed a cross-product surveillance pattern to detect layering in an underlying equity to influence options prices. In 2017, we will expand surveillance for cross-product manipulation to trading in ETPs and related securities, and improper trading strategies directed at unique attributes of ETPs.

Our 2017 priorities include a pilot trading examination program. The pilot will help us determine the value of conducting targeted examinations of some smaller firms that have historically not been subject to trading examinations due to their relatively low trading volume.

In addition, with new TRACE reporting requirements for transactions in U.S. Treasury securities scheduled to become effective in July 2017, the development of a data integrity program to monitor the accuracy of the submitted data is a priority for FINRA. FINRA will also develop customer protection surveillance patterns focusing on compliance with rules applicable to U.S. Treasury securities, as well as patterns looking for abusive algorithms.

The Securities and Exchange Commission today charged two individuals with defrauding investors in penny stock companies that claimed to have valuable patents. One of those charged had been barred from the penny stock business based on his role in another securities scheme and neither he nor his companies had ever been issued any patents by the U.S. Patent and Trademark Office, the SEC alleged.

It's often said that mutual funds and other institutional investors can't own stocks that trade for less than $5, condemning low-priced stocks to retail ownership only. But the truth is actually the opposite -- there are some roadblocks for investing in penny stocks, but they are most applicable to average Joes, not professional investors who run institutional sums.

Congress put share prices in the spotlight when it made it more difficult for brokers to process client transactions in stocks priced lower than $5 each, the cutoff point below which a stock earns the "penny stock" label.

These regulations were put into place following a broad crackdown on sketchy stock brokers in the early 1990s. Back then, brokerages sold penny stocks of questionable quality to investors all around the country by phone, charging huge commissions on each trade.

These folks weren't bad at picking good stocks, but rather good at selling bad stocks. One of the largest busted brokerages was J.T. Moran, which was the basis for the story in the movie Boiler Room. Stratton Oakmont, featured in Wolf of Wall Street, fits the description, too. You get the idea here.

Congress decided that it needed to make it harder for individual investors to buy bad stocks, deciding to make $5 the dividing line between "good" and "bad" stocks. And with new rules in place, it immediately became all that much harder for brokers to pitch stocks that trade for less than $5 per share.

According to the Securities and Exchange Commission, brokers can't process trades in stocks worth less than $5 without following a laundry list of rules and processes. Before transacting in penny stocks, brokers must first:

The rules are reflective of the times in which they were adopted. In the 1980s and 1990s, commissions were generally assessed on a per-share basis, rather than on a flat fee basis that is the standard today. Thus, brokers made more by selling 2,000 shares of a $1 stock than 10 shares of a $200 stock, which is why penny stocks were commonly pitched by the sleaziest of stockbrokers, and why Congress targeted penny stocks with legislation.

In fact, one of the largest actively managed stock funds on the market today is the Fidelity Low-Priced Stock Fund (FLPSX 0.17%), which specifically seeks to invest in stocks priced at less than $35 per share. It launched in 1989 at the height of the public's love affair with low-priced stocks, and has crushed the market since inception. (Its focus on low-priced stocks may be more of a guide than a rule today, since its five largest investments all trade for more than $35 per share, a testament to the fact that self-imposed restrictions are rarely set in stone.)

Of course, index funds are more prominent today than in the past, and many have a mandate to own all stocks in the index they track, regardless of share prices. The S&P 500 Index, and the funds that track it, all have at least one penny stock in their portfolio, Chesapeake Energy. The Russell 2000 Index, which is generally regarded as the small cap stock index, includes 157 penny stocks, based on my analysis of the iShares Russell 2000 ETF.

Realistically, penny stocks don't make up a large part of the market in terms of value, but they are numerous, and many are owned by funds because share prices are largely irrelevant to the decision to buy or sell. Professional investors know that a stock that trades for $4 that they believe to be worth $10 is a far better investment than a $40 stock they believe to be worth $50.

The next time someone tells you that a stock that has dropped will drop even further when institutions are forced to sell below $5, refer them to this article. Though the average Joe may face a few hurdles when buying or selling stocks under $5, there is no meaningful institutional bias against stocks that trade for less than $5 each. In fact, thanks to the rise of index funds, there are perhaps more funds that are required by their mandate to buy penny stocks than funds that purposefully exclude them.

Many such scams have been showing up lately because the scammers have a powerful new bait in the form of cannabis company stocks. The growing trend of state-by-state marijuana legalization has created lucrative new markets that many investors want to get in on, but the continuing threat of legal action at a federal level keeps legitimate finance companies on the sidelines. As a response a number of fly-by-night companies have formed claiming to offer vehicles for individual investors to buy into the growing marijuana market. Be warned: not only could these companies be shut down overnight by federal agencies, many of them are bogus to begin with.

He added that, even if email pump-and-dump schemes could be eliminated, ever-developing technology will continue to give unscrupulous operators new ways of delivering their messages. In recent years, for example, they have increasingly been turning to Twitter, message boards and other social media to generate interest in penny stocks. And before spam there were tip sheets, often one-page printouts touting individual stocks that were circulated around Wall Street.

You can actually find penny stocks on virtually all major exchanges, although rules vary on how long a micro-cap gets to stay listed on the exchange. The New York Stock Exchange, for example, delists a micro-cap stock if it trades below $1 for 30 consecutive trading sessions. 59ce067264


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