3 Best Penny Stocks To Buy In May 2020

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. 

The Dow Jones finished April with its strongest month since 1987 as investors poured capital into beaten-down stocks. At Money Morning, one thing we've been focusing on is penny stocks – shares that you can buy for under $5 – that are poised to break out in the coming month.

Just two weeks ago, we outlined three penny stocks that have outperformed the market. On April 19, we laid out three different penny stocks for April. Since those recommendations, we've seen solid gains.

  • Shares of Orion Energy Systems Inc. (NASDAQ: OESX) have jumped from $4.08 to $4.50, a gain of 10% in two weeks.
  • Shares of B2Gold Corp. (NYSE: BTG) have jumped from $4.49 to $5.13, a gain of roughly 14%.
  • Shares of Mistras Group Inc. (NYSE: MG) rallied from $3.31 per share to $4.76, a gain of 44%.

Those are solid returns for 10 trading days. But today we're really swinging for the fences.

We're tapping into several penny stocks that are poised to break out this month.

Here are the three best penny stocks to buy in May 2020…

Best Penny Stocks to Buy, No. 3: Consumer Portfolio Services

Consumer Portfolio Services Inc. (NASDAQ: CPSS) is an independent specialty finance company that provides indirect financing to vehicle buyers who have had past credit issues. On the surface, this stock seems like a loser. After all, finance companies are cutting credit access to Americans, and concerns about debt in the automotive sector continue to swirl.

But it's important to remember that we're not interested in how many loans they provide to potential customers. It's the quality of the loans and the protection of the balance sheet that matters most. Like many other finance companies, the firms are assessing their risk models to ensure that the loans they do provide have low probabilities of bankruptcy. In addition, the company is a good bet for a potential beneficiary of stimulus spending across the United States as consumers move to make payments on their vehicles.

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