What are Penny stocks??

Home » stocks » What are Penny stocks??

What are Penny stocks??

Filed under: Stocks

By: "The Mike"

Penny stocks ? Pennystocks? Micro-Cap stocks ? or Small-Cap Stocks ?
Penny stocks, or Micro-Cap stocks are shares that trade from .001 of a penny to $5.00. They currently trade in decimals. They are much more risky than other investments, but have tremendous reward potential. Some penny stocks have gone from 25 cents to $20.00, while others have become worthless. In Fact Microsoft, (Ticker: MSFT.) at one time was a penny stock.
In the past, penny stocks, or Small-Cap Stocks had a bad name because of risk and lack of information about the companies and the fact that the spread between the bid and the ask were sometimes more than 50%25... In addition penny stocks, or pennystocks, were considered to be easily manipulated. Nowadays, investors are quickly learning that penny stocks represent all the small companies across America that are great and have yet to grow or be discovered.
The SEC keeps a close eye on manipulation practices and prosecutes those who break the laws. Many investors like penny stocks, or pennystocks because it does not take significant cash to get started, and one can own a portion of a good company and live the American dream.
We offer our insight to let you know what the next hot penny stocks, Small-Cap Stocks, or penny stocks may be. The upside of penny stocks, is the ability to turn a small investment into a fortune. The downside is the risk, volatility of the shares, and the lack of corporate transparency. We advise anyone interested in penny stocks, pennystocks to do their Homework on the company.
With penny stocks, Micro-Cap stocks, or Pennystocks one needs to all aspects of the companies business. Management is KEY. We at Dailywallstreet have seen management squander money self seeking items rather than what's best for the company and shareholders. You also should look for the following things, among others, to ensure that you are only getting involved with the absolute best penny stocks.
Market Liquidity (this will make it easier buy and sell.)
Are the shares good if they trade on the pinksheets or pink sheets, OTC.BB or otc bb, or Grey Market? Grey Market has no information is like throwing money away or at least that's what the regulators are suggesting. We take that point of view as well. Since pinksheets.com , the pinksheet stocks have much more information available and because of pink link the electronic trading platform now available to Market Makers and pinksheet traders, the spreads have tightened. The OTC Bulletin board is like the old Nasdaq small cap.
The NASDAQ Small Cap or AMEX, they will have to report to shareholders regularly, and must adhere to strict requirements of the exchange. OTC-BB and Pink Sheet stocks are generally less transparent or cooperative)
Strong business plan and results (Check the financials to see if they are making more money than they are spending and if their operational plan makes sense)
Look for a trend of improvement (Share prices go up the most when a company has momentum. If they keep making more money each year than they did the last, the shares will probably benefit as the company grows.)
Lean heavily on the opinions of professionals (When a a newsletter or service reviews a company, and analyses all the details, it is a good starting point for you to read that report and decide if the company fits with your trading goals.)
Our goal is to find the Best penny stock lists, hot penny stock lists. Perform your due diligence, view all aspects of the companies business, and consult a professional broker, before investing in penny stocks, or pennystocks.

"The Mike" is an SEO Expert who also specializes in the Investment world. Periodically He is requested to Submit article in Laments Terms.