Penny Stocks Can Make You Money
Keywords: penny stocks
Most people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest.
Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. Regulatory agencies sometimes classify them as a stock with a price below $2. But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board.
The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets.
The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.
Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.
The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.
Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones.
So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.
To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.
You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.
Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:
1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?
2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.
3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is.
Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run. Just make sure you do your homework before you invest and you should do extremely well.
Jim Pretin is the owner of www.forms4free.com, a service that helps programmers make an HTML form
Previous Articles Highlighter:
Should You Invest In 529 College Savings Plans? (1)
The advantage to parents here is that they can choose whichever school or college for their children - and also various foreign institutions - without worrying whether the plan will pay out for their expenses or not.
Advantages Of Charitable Trusts To Businesses (2)
The following is a list of these privileges: - Charitable trusts will not cease to function even if they have not been able to fulfill their initial goals. These trusts have what is known as cy pres, a provision that allows charitable trusts to change their beneficiary options if they are not able to meet the first one.
Know The Modified Rate Of Return (MIRR) Of Your Investment (3)
Knowing just the IRR is of value, but because the MIRR uses more accurate data, the MIRR will be your best guide to keeping your investments safe and as profitable as possible.
How You Can Turn One Dollar Into Eight (4)
It is far better to start saving now than to just give up completely and not save at all. It's never too late. Why turn down $5 or $3 just because it's not $8?
The Truth About Credit Card Checks (5)
Credit card checks are not free Unlike bank checks that usually have no charges associated with issuing checks, a credit card check charges an interest each time a check is issued, the charges for issuing it vary from company to company, but almost all credit card companies charge fees for 'processing' the check issued.
For The Best Property Investment Loan, Know Your Ratios (6)
This debt ratio will be your own personal monthly housing expenses divided by your own personal monthly gross income. Your debt ratio shows the lender how you manage your personal finances and if you can afford to guarantee the investment property loan.
Successful Commercial Property Analysis (7)
If many properties are sitting vacant that is a sign that you may have serious trouble renting to a business and keeping them for the long-term. This is important for your commercial investment analysis because the rent money is your income on the property.
Use An Investment Property Calculator To Evaluate Properties (8)
You can easily find investment calculators of all kinds on the Internet. An investment calculator can assist you by showing you many of the probable outcomes you can expect of your investment.
Need A Student Loan? Three Kinds Of Student Loan For You (9)
That process can lead to a reduction in the interest on the loan. And, if after graduation, the student then makes 24 successive payments, the co-signer is removed from responsibility for covering the loan expenses.
Two Tips On How To Create A Win-Win Owner-Financed Real Estate Deal (10)
So make sure you take the steps necessary to protect yourself. Steve Kroening writes for Success magazine and also publishes Wisdom's Edge. You can get Biblical tips on health, finance, relationships, parenting, and success, delivered to your email inbox every week.
Guaranteed Approval Credit Cards For Bad Credit (11)
Try to make at least minimum amount to your credit card before the due date. After some time you will become eligible for normal credit cards and receive the benefits of good credit standing.
Investment Property Mortgage Loan Ratios (12)
Before you approach a lender you will want to understand these three ratios and run the numbers for your unique situation. By determining if financing will be easy or difficult, from the start of your project; you can better work with the commercial investment property mortgage lenders.
Determining Commercial Property Market Value (13)
A property, unlike the simple stick of gum in the above example, has multiple aspects for a seller and buyer to put different valuations on. Introduce a lender into the picture, and then you have a third option on valuation to deal with as well.
Choosing Your Motorbike Insurance Policy (14)
Examples are 'riding other bikes', enabling you to ride your mate's bike, breakdown cover, legal assistance cover and whether you have equivalent cover to ride abroad. Some motorbike insurance providers include these as standard, others offer them as optional extras.
Commodity Trading - Trading Silver (15)
A standard price quote may appear as: Contract Date Last Change Open High Jun '06 (SIM06) 1014.8 -3.7 1013.8 1014.8 Low Date/Time 1012.8 12:29 To break down the price quote, the contract date indicates the contract's month and year.
Forex Trading - Profit And Loss Calculations (16)
In other words, you made $170 on that trade. If you trade $100,000 in a currency pair with the US dollar the quote currency, a pip will be worth $10.
Forex Trading - To Avoid Failure In The Forex Market, Try These Tips (17)
Even though experienced traders can make it look easy, predicting currency prices can be complex. If you are a small investor, you are at a disadvantage because large financial institutions can access resources you can't.
Underlying Truths About No Annual Fee Credit Cards (18)
Before, it was not the trend because every card user was charged to pay their annual fees. However, the credit card issuers realized how their clients have resented because they are obliged to pay the annual fees in order for them to utilize their cards.
Make Money In A Down Market Buying Abandoned Houses (19)
While buying such abandoned properties, rarely does the seller ask your credit report. Generally the seller is open to innovative strategies, as they will help him to get rid of his abandoned assets.
The Art Of Negotiating A Perfect Real Estate Deal (20)
This will leave you with bargaining space and price negotiations. The seller may acquiesce and you may have to pay less than your maximum price. 3. Try appearing dumb instead of smart: Seek information by asking a lot of questions to give an impression of a person possessing limited understanding about real estate matters.
Newer Articles Highlighter:
How To Find Real Estate Leads For Agents (1)
Hers was a 5 step process 1. She'd find raw land for her builder developer to purchase and develop 2. Try to set up partnerships with the seller of the raw land and her developer to offset the developers out of pocket costs while gaining controlling interest of the land 3.
College Is Expensive -- Here Are 3 Ways To Make It Work (2)
If your children are young, consider signing up for uPromise. This website offers a great way to help you finance your child's education. Consumer guru Clark Howard says, "The method is similar to airline frequent flyer programs with member merchants and companies contributing credits to your personal saving for college account when you use services or purchase products." It's free to sign up and the site offers ways to increase your savings over time.
General Identity Theft Statistics Revealed (3)
People whom you think cannot do this crime to you are the ones who have the strong will to do it. Make sure that they will not have any idea on how to restore such important information.
Saving Money Can Be Enjoyable For Those In Texas (4)
Setting goals is a key way to make a difference in achieving financial success. Goals should be attainable and consistent, two characteristics that are likely to help those who want to be successful in the future.
Principles On How To Find A Good Credit Card (5)
It is either in the form of points or cash back. The cash back reward program enables you to get a particular percentage from all the qualified purchase back, which is usually credited to your account.
How To Get Federal And Private Student Loan Forgiveness (6)
1. Law School Many of you face law school debt and that is practically a mortgage with the amount you have to shell out for a few years of reading books and losing sleep.
A How To Guide For Selling Your Home Fast (7)
.. Look at the exterior of your house and see if the exterior paint has worn off or needs another coat. .. Make sure that you are the drainage systems are functioning properly and are not clogged.
Debt Consolidation Financing - The Pros And Cons Of Home Equity Loans (8)
The general idea is easy, you acquire a line of credit, secured through the equity in your home, that has accumulated over time from regular monthly repayments on the original home loan and from any increase in the properties worth, a range of homeowners may take out a HELOC (Home Equity Line of Credit), as they are known in order to utilize the cash for the intended purpose of financing home improvements, this purpose gave the loan its original name, however because of tax implications and other issues, the HELOC evolved to serve other needs.
Quick Sale Of Your Property Can Give You Quick Access To Cash (9)
Some of the websites also mention the quoted price for different properties according to which people can decide whether to go ahead or not. .. Multiple listing services: Multiple listing services also known as MLS is a database, which allows the real estate brokers to list different properties on sale.
Self Employed? Health Insurance Options (10)
Keith Londrie II is the and publisher of health-insurance-news-info.info A website that specializes in providing tips on health insurance that you can research on the internet. Please Visit health-insurance-news-info.info now!
Buying Real Estate The Smart Way (11)
By obtaining a thorough knowledge of your finances, buying power, target neighborhood, and all of the housing options available to today's home buyer before you begin your new home search will put you among the ranks of the smart home buyers.
Three Best Real Estate Marketing Tools In The World (12)
Get started today with either one, or all of these to increase your income. Click www.farmingexpiredlistings.com to learn how to average 1 or more listings a week and www.real-estate-marketing-talk.com for more lead generating ideas.
Debt Consolidation Solution - Low Interest Credit Cards Are They Your Savoir Or The Enemy (13)
A reduced rate may indeed be a gain, notwithstanding lowering the rate doesn't always mean lowering the total amount, if you pay 8% on a debt of $10,000 for five years, you will pay more than paying 10% on $10,000 for two years, the cause of this is the compounding effect of interest, the total amount of interest paid in the first circumstance is $2165.60, the net interest rate overall is 21.656% when calculated as the percentage paid additionally to the principle, in the second circumstance, you pay only $1074.80 with a net interest rate of 10.748%.
Parents 'Unaware' Of Financial Pressures Of University (14)
Some 19 per cent of those surveyed claim that they are unable to study their preferred course because it would be too expensive, with 55 per cent reporting that it will take them around a decade to pay off the money owed from their time in education.
Use Quality Photographs And MLS To Sell Your Home Fast (15)
As the house can be seen it increases their interest and catches their attention quicker. This will attract a number of interested customers, helping you to increase the chances of sale.
Loans Provided By Credit Unions (16)
Later, they might choose to add the expenses of a college education to the loan and not be hindered by higher interest rates offered by educational services lenders. Most credit unions offer their customers credit cards that are sponsored through financial services loans with attractive credit limits and the credit cards will feature very low interest rates that help the credit union customer to build good credit rating that can later be used to secure a home mortgage loan.
How An Agent Can Help Sell Your Home Fast (17)
Helps in setting a fair price for your property and also helps you meet your goals. 3. Advises you on the way you can represent your home aesthetically to the buyer so as to capitalize on its appeal.
Retirement Benefits Do Not Fill Financial Need (18)
The age at which a person chooses to retire will affect the amount they receive in benefits and the full retirement age, according to SSA is based on the year of birth.
What Are Your Options To Pay For Your College Debt? (19)
For many that won't be an option or it won't be a full ride scholarship. Also many of you work hard to look for financial backers such as family members, local community organizations, or for some service activity.
Duties Your Asset Management Company Must Perform (20)
Sometimes, they will also undertake to communicate with the wholesalers who take the products from the company for selling. That means, asset management companies would undertake a company's entire buying and selling process, if they are contracted for the service at the outset.