Penny stock picks aren't easy to come by, since these stocks are by nature small cap companies with little coverage. These penny stocks also tend to see red hot volatility, since stock prices can move dramatically even on low volume. But the risks associated with penny stocks and small cap stock trading strategies also come with some really thrilling rewards -- such as the ability for a single penny stock to deliver 50%, 75% or even 100% profits in just a matter of weeks! To help you get your share with a penny stock investment strategy, I've made a list of 12 hot penny stocks to buy this week -- including investment in Sirius XM Radio Inc. ( SIRI ), Vonage Holdings Corp . ( VG ), Tower Semiconductor Ltd. ( TSEM ), Joe's Jeans Inc. ( JOEZ ), just to name a few.

I always place a high priority on a stock's fundamental strength. That is, how it has performed in previous earnings reports and how profit and sales forecasts look going forward. These are concrete numbers that let you know in black and white how a stock pick will perform. But penny stocks often aren't covered by analysts on Wall Street so there are no earnings estimates to beat, and very little stock news coverage. That means a hot penny stock must be identified by other means. This can be difficult and a bit of work, depending on your investment strategy, but if done properly it can really pay off.

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One thing to look at to identify hot penny stocks to buy is a company's sector. Chances are if the industry is booming, that this hot stock has a better chance to be lifted as well. Right now my trading strategies favor healthcare, telecom and technology the most. That's not to say you can't find a penny stock outside these sectors, but these are the best place to start.

Next, I look at buying pressure behind a penny stock -- also known as quantitative pressure, or "quant." Since penny stocks can be volatile and gap up dramatically on low volume, you want to make sure the buying pressure is there to support your purchase. In the absence of any buyers, a penny stock can spiral downward in a hurry since there is no quantitative pressure to support stock prices. It's simple supply in demand -- you want a penny stock with high quant because that signifies more people are buying than selling.

Lastly, I look at a stock's fundamentals. Normally I do this first, but as I said it can be tricky for penny stocks since they by nature have smaller sales and profits as a small cap stock and because analyst coverage can be sparse. You also have to have a little perspective when looking at penny stock fundamentals, since these investments are often startups on the verge of big success -- even if they are not wildly profitable right now.

Take Sirius XM ( SIRI ), for example. The stock hasn't turned a profit in the last fiscal year, and that scares off many penny stock investors. However, SIRI stock is up 70% year-to-date, a sure sign this penny stock has buying pressure! Also, Sirius XM has narrowed its quarterly loss for the last three consecutive earnings reports, and has seen a number of positive earnings revisions to its next report. Sirius appears to be on the resurgence, and that means SIRI stock is one of my favorite hot penny stocks to buy now.

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Vonage Holdings Corp . ( VG ) shares the same attributes of Sirius XM in many respects. Like SIRI stock, VG stock is up dramatically since January 1 -- almost 35% as of today's open, compared with a small decline for the broader market.. Vonage Holdings also has improved its quarterly earnings in each of the last four consecutive reports -- and though there are only two Wall Street analysts covering the stock, it's worth noting that Vonage has blown away estimates by as much as 200% in recent quarters.

You get the idea, and hopefully you can understand why I think these are great penny stocks to buy now. So without any further ado, here's the list of my 12 favorite penny stocks as of this week. Each penny stock trades for less than $2, and with the exception of Sirius XM has a market cap of under $400 million.

One final note: Remember that you should research each independently before buying to make sure it meets up with your trading strategies, and please use limit orders before purchasing any of these penny stocks. As I have said before, shares can gap up on low volume so you want to protect yourself from overpaying for these penny stocks. And whatever your investment strategy is, keep in mind that while penny stocks can deliver big returns they also come with big risk.

As of this writing, Louis Navellier did not own a position in any of these penny stock picks in either personal or client portfolios.

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