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Picking The Best Penny Stocks

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What the Best Penny Stocks Do Not Do

best penny stocks

When you are trying to pick the best penny stocks, it is easy to become completely confused by the huge number of options before you. One way to separate the wheat from the chaff is to discard any stocks that do the following things. These behaviors often betray underlying problems that may have brought the shares down to penny stock status in the first place.

If the company behind the penny stock does not issue regular reports about its finances, you should avoid it. It is true that penny stocks do not have as much published information about themselves available as do more established companies. However, tossing money into a company that reveals little or nothing about its finances is a risk you do not want to take.

Penny stocks that are not traded very often present another risk. A low number of trades associated with a stock suggest that no one else has much confidence in it. The best penny stocks see a lot of trading action.

Hype about companies is usually a bad sign. Someone may be trying to artificially pump up the prices of a penny stock. Believe in your own research and act on it.

How to Narrow Down Your Choice of the Best Penny Stocks

Discarding the obviously bad penny stocks will still leave you with a lot of choices. Winnow them down to a few select candidates by comparing them to each other. Determine which companies have the highest trading volume. Of the ones that are well-traded, find out which ones present financial information on a regular basis. Finally, the best penny stocks will have fundamental strengths which suggest that they are likely to survive and grow out of their present position rather than slide into oblivion.

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