How To Make Money With Penny Stocks 2017

Stock graph with upward trend, symbolized with a penny.

Penny stock-trading refers to buying and selling stocks that trade for less than $5, and penny stocks are great — for the extreme speculator. Typically traded over-the-counter or on the OTC bulletin board, the Securities and Exchange Commission cautions that hot penny stocks might trade infrequently and be difficult to sell, which is an outlook that can cause some investors to think twice before taking the plunge.

For investors who are firmly interested in penny-stock trading, these top 10 penny stocks of 2017 all have earnings-per-share growth expectations of at least 20 percent annually for the next three to five years and market capitalizations above $12 million, according to Fidelity. Even the best of these stocks are loaded with risk, however, so proceed with caution when you decide to invest in a penny stock.

10 Best Penny Stocks

From stocks associated with waste management to those related to a popular restaurant chain, there's something for everyone interested in this investing niche. Here are the top 10 penny stocks of 2017 for your consideration into 2018:

1. Sharps Compliance Corp. (SMED)

Price: $4.18
Market Cap: $66.9 million
Forward EPS Growth: 21.7 percent
One-Year Price Target: $6.50

Sharps Compliance Corporation — a service business based in Texas providing medical, pharmaceutical and hazardous waste management services — might be one of the penny stocks to buy now. Sharps has a projected 55 percent price expansion this year. Plus, first quarter 2018 financial results include earnings of $0.1 million compared with last year's quarterly loss of $1.0 million. In other rosy earnings news, professional, government and home healthcare billings increased respectively 10, 23 and 7 percent.

2. Pandora Media (P)

Price: $4.77
Market Cap: $1.2 billion
Forward EPS Growth: 21.6 percent
One-Year Price Target: $8.61

You likely lean toward Spotify or Pandora for your streaming music, but Pandora is the standout between the two when it comes to penny stocks. Pandora, the online radio broadcasting service founded in 2000 and hails from Oakland, Calif., experienced a lofty 21.6 percent projected earnings growth and nearly a double-projected price target. All those positive advances mean it might be among the best penny stocks to invest in.

3. Ascena Retail Group, Inc. (ASNA)

Price: $2.47
Market Cap: $482 million
Forward EPS Growth: 21 percent
One-Year Price Target: $2.50

Here's a penny stock to watch that's also easy to understand. This microcap New Jersey-based retail sector play owns the following clothing stores: Ann Taylor, Justice, Lane Bryant, maurices, Dressbarn and Catherines. With a low 10.98 PE ratio and 21 percent projected growth, Zacks awards the retailer a hold rating. But momentum stock traders might consider investing in risky ASNA, as it broke its 50-day moving average on Nov. 17.

4. The Joint Corp. (JYNT)

Price: $5.13
Market Cap: $69.2 million
Forward EPS Growth: 20 percent
One-Year Price Target: $6.92

Penny stock investors seeking exposure to the hospital industry might consider The Joint Corporation. With only 94 employees, this Arizona-based niche player owns, operates and franchises chiropractic clinics across the U.S. The company beat analyst estimates in three of the prior four quarters by an average 5.5 percent. With above-average trading volume on Dec. 1 and a projected stock price increase of 35 percent this year, JYNT might appeal to penny stock speculators.

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5. Viveve Medical Inc. (VIVE)

Price: $5.10
Market Cap: $99 million
Forward EPS Growth: 20 percent
One-Year Price Target: $11.83

The smallest company in our top penny stocks list, California-based Viveve, treats a narrow medical niche — nonsurgical gynecologic treatments — and sells their treatment worldwide. The company reported positive results in the third quarter and expects the good news to continue in the fourth. Revenue increased 120 percent over the same quarter last year.

The company also garnered additional product approvals and clearances to tally nine in 2017. With forward-earning growth projected at 20 percent and greater than a 100 percent price appreciation target, watch out for Viveve Medical.

6. Buzztime Inc. (NTN)

Price: $4.92
Market Cap: $12.3 million
Forward EPS Growth: 20 percent
One-Year Price Target: $8.45

You might not recognize the Buzztime company name, but you've probably played their trivia games during your last visit to Red Robin for a beer and a burger. Despite having the smallest market cap of this penny stocks list, Buzztime games and events pack a lot of fun. With an improving balance sheet and gross margin of 70 percent without accounting gimmicks, take a look at this nano-cap for your penny stock portfolio.

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7. Famous Dave's of America Inc. (DAVE)

Price: $4.75
Market Cap: $33 million
Forward EPS Growth: 20 percent
One-Year Price Target: $6.00

Famous Dave's of America offers smoked barbequed and grilled meats at their 35 restaurant locations and even has a location in the United Arab Emirates. And the restaurant industry is competitive as DAVE's recent quarterly results demonstrate. The company beat expectations despite revenue was down 13.7 percent over the same period last year. For penny-stock investors in the mood to gamble, this nano-cap stock might be a good pick. Famous Dave's one-year price target of $6.00 is 23.7 percent over the recent $4.85 share price.

8. Pacific Ethanol, Inc. (PEIX)

Price: $4.55
Market Cap: $198 million
Forward EPS Growth: 20 percent
One-Year Price Target: $10.20

Pacific Ethanol, Inc. belongs to the commodities oil and gas refining industry and is located in Sacramento, Calif. The company produces and markets the in-demand, low-carbon renewable fuels in the U.S. Year-over-year revenue shows a pleasing upward trend.

Additionally, the company's third-quarter results are promising with year-over-year sales increases from $417.8 million to $445.4 million. Fuel sales also improved to 250 million gallons from 243.7 million last year. Operating income was also up, despite a net loss to shareholders of $0.01 per share. Trading at the bottom of its 52-week range, topping out at $10.95, penny stock investors just might find value in this beaten-down company with a $10.20 projected price next year.

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9. Cynergistek Inc. (CEK)

Price: $4.15
Market Cap: $39.4 trillion
Forward EPS Growth: 25 percent
One-Year Price Target: $7.42

Another nano-cap player with robust projected upside, this top penny stock of 2017 belongs to the diversified machinery sector and is also headquartered in California. CTEK is a cybersecurity, privacy and compliance consulting firm focused on the healthcare industry. The company operates in an in-demand sphere, which bodes well for its future. With third quarter revenues up to $17.9 million — a 25-percent increase over the same quarter last year — the profits are impressive. Another reason to like CTEK is an upcoming multimillion-dollar contract with a major children's hospital.

10. CYREN Ltd (CYRN)

Price: $2.45
Market Cap: $96 million
Forward EPS Growth: 20 percent
One-Year Price Target: $3.00

Completing the list of Top Penny Stocks of 2017 is CYREN, a security software and services company. Although not one of the stocks under $1, the $2.45 CYRN is the cheapest penny stock on the list. CYREN is a global player headquartered in Virginia. The firm provides information security solutions for customers to protect their systems from the ever-present internet predators. The shares rose 81 percent from their 52-week Aug. 8, 2017 low of $1.35 and still might have room to grow. A final reason to consider CYREN for your speculative penny stock portfolio is that Warburg Pincus, a global private equity firm, recently offered $2.50 per share for up to 75 percent of the company's shares.

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This article originally appeared on GOBankingRates.com: Top 10 Penny Stocks of 2017