Benefits of Penny Stocks

The Best Penny Stocks

With penny stocks, you need to look into every aspect of the company that you can. Try to get a feel for the company, learn how it makes money, and decide what you expect the corporation to be doing in the coming years.

You also should look for the following things, among others, to ensure that you are only getting involved with the absolute best penny stocks.

  • Good Trading Volume (this will make it easier to trade shares, and can magnify any upward price movement)
  • Are the shares on a good penny stock market? (If they are on the Nasdaq SmallCap 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 penny stock 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.)