Friday, February 27, 2009

Great Penny Stocks

By Gilbert Stockton

Penny stocks are the stocks from smaller companies that you buy at the least price and which give a great return. You will know the best penny stocks by looking at the previous trends of a specific stock in the market. A great penny stock will have a higher net asset value per share than the share price.

The best penny stocks are always appreciating in value over very short time periods. These stocks often double in as little as a few days. Penny stocks are high yielding stocks because they often rise as much as 50%, which is a great return on your investment.

You are likely to get the highest profit margin when you sell penny stocks because often they are very low priced. Stocks that have a proven record of improvement are the best. When a company is very open with their financial statements and publish their profit and loss statements, balance sheets, and cash flow you can see how well a company is performing and if they are making money. The companies that have the best organizational structure and profits are often the best ones to purchase. Result oriented companies are also good because they are giving quality production while maintaining low expenditures. These often appreciate in value.

Penny stocks that trade in great volumes are good to buy since the high demand shows they have a high tendency of price rising. When buying penny stocks, look both on the profit side and on the risk side and thus consider buying low priced stocks to reduce the risk rate. If you realize that a certain company is having a bid on who is to takeover, the stock prices of such a company are most likely to soar up and such shares are advisable for purchase.

A company which is already making profits is one which is dominant in the market and is making great improvements and profits. You should not wait for a company to start making profits while you have already bought their penny stocks. Penny stocks of a company with fewer competitors have higher advantages over those of a company with many competitors. This is due to the high demand of the products of the company with fewer competitors.

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