TM Editors Note: This article discusses one or more penny stocks and/or microcaps. Such stocks are readily manipulated; do your own careful due diligence.

Today is your first lucky day of the holiday season.

In just a moment, I'm going to show you three of the best penny stocks to buy before the end of 2019.

And that's not all.

I'm also going to show you the remarkably simple formula I use to find winning stocks time and time again.

You see, I've always been a fundamental value analyst on the hunt for stocks that were mispriced by the market.

Years ago, I made a remarkable discovery that boiled all that fundamental analysis down to one simple formula…

It's a formula that anyone can use at any time to find stocks that have the best potential to double in value.

While this formula won't work every single time (no strategy does), it significantly puts the odds of success in your favor. That's all you can ask for in this market with stocks at historical high valuations.

Let's start with a basic principle of Wall Street. Investors want to own stocks of businesses that make money – lots of it.

The less investors have to pay for that business the better.

That's why when you compare the earnings growth rate to the price/earnings (P/E) ratio assigned by the market, valuable insight can be gained.

Generally speaking, the higher the growth rate compared to the P/E ratio, the more likely the stock will go up. The gains are significant in some cases.

In the world of penny stocks, it's rare to find these valuation dynamics. Most penny stocks trade where they are for a reason.

Still, the inefficiency of the market creates opportunities to buy penny stocks that trade for earnings multiples well below the expected profit growth rate.

Here are three penny stocks that meet my rigorous requirements. These are perfect to scoop up before 2020…

Top Penny Stocks to Buy Before 2020, No. 3

If you haven't noticed, central banks across the planet are working overtime to ignite the global economy.

Outside the United States, it has been rough sledding. Super low-interest rates and even negative rates have become the preferred tools in the fight.

That bodes well for hard assets like gold.

My favorite gold stock at the moment based on the above valuation metric is Kinross Gold Corp. (NYSE: KGC).

Analysts expect Kinross to grow profits by 26% from the current year to the next. Right now, shares trade for only 14 times earnings. That gap will get larger assuming a ramp-up in inflation fueled by easy money global monetary policy.

The stock has rallied nicely, climbing 24% in the last six months.

I expect a double in 2020.

Top Penny Stocks to Buy Before 2020, No. 2

It's not often you can buy a stock poised to grow profits by 50% that trades for only five times earnings. That's exactly the valuation metric of Callon Petroleum Co. (NYSE: CPE).

Like gold, oil prices are going to soar on easy money policies across the globe. They already have gone up in the last half of the year.

One hundred dollars per barrel is definitely in play at some point in the near future.

That's when Callon will trade in double digits, way more than double current prices. It could happen fast. Earlier this year, Callon traded for more than $8 per share, but it's pulled back to under $4 today.

I expect a double in 12 months or less.

Top Penny Stocks to Buy Before 2020, No. 1

The size of the gap between profit growth rate and P/E ratio is not the primary factor for success in identifying a penny stock that can double in value.

Simply having profit growth slightly above the valuation works too.

That is the case with Global Cord Blood Corp. (NYSE: CO).

Analysts expect Global Cord to grow profits by 11% next year. At current prices, shares trade for 10 times current year estimated earnings. That tiny gap is all one needs to give the go-ahead on Global Cord.

Given the aging population and the potential of Global Cord in terms of extending life span, growth here is likely to be larger than currently expected.

The focus on my formula then should be on the fact that shares trade for a multiple of earnings well below the current market multiple. That alone makes this a stock to buy.

The fact that earnings growth is above the valuation makes it a stock that will double in value.