Analyzing Penny Stocks
By Chris Johansen
Feb 13, 2013
Getting a good penny stock takes a bit of leg work, some research, impeccable timing, and maybe even a little luck. Penny stocks, also known as micro-load stocks, are stocks traded through off the major exchange for significantly less money than traditional stocks. Penny stocks generally trade at less than $5.00 a share. Since these stocks are traded "over the counter", most investors buy and sell them without a broker. This requires investors to do some research and develop and implement a comprehensive investment strategy to protect against big losses. Good penny stocks offer investors willing to face a riskier, more volatile market a chance at a bigger reward.
Many websites are dedicated
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Gaming systems, social media support, beverage companies, and power and natural gas companies are expected to make gains over the next few months. For investors looking for good penny stocks, they should follow some national and regional trends and keep an eye on companies looking to make big moves.
Finding good penny stocks are only the first part of the equation. Penny stock traders must have a disciplined approach to buying and selling these volatile stocks. Since penny stock investors are generally not using a broker, they must stay on top of their picks. Penny stocks can gain and lose value much quicker than more traditional stocks. Utilizing stop orders is one way to stop the hemorrhaging from a stock losing its value. Keeping your penny stock portfolio is also important, so don't invest all your money in the same company or field.
Investing in good penny stocks is not for every investor. To successfully play the penny stock market, you need to have a high tolerance for risk and volatility. Investors who can handle the extreme up and downs of this market can make a good deal of money for a smaller than average investor. As with any investment opportunity, it is important to understand the risk involved and prepare accordingly. Good, independent research, expert analysis, and your own common sense and intuition can go a long way in making your penny stock investment a profitable
...s are doing well and over the many years have gone up. The company has not lawsuits currently pending which is good. The company as a whole seems to be growing even when the market is down.
Currently there is no market to trade the shares and the fraud risk is low.
After researching Home Depots financials I would invest money in Home Depot by purchasing stock. In my research there was a lot of talk about how popular home improvement is and how many people prefer the do-it-yourself aspect. While I am sure Home Depots numbers have been better, before the recession, I do not for see Home Depot going under anytime soon. I think it is a stable company that will be in business for many years to come.
Many people will invest in a stock once in their life, but one must do some research before making this important decision. If anyone decides to invest in one, it is as if they are taking a chance that will either damage their life, or help them move forward. Stocks might make the most profit in their lifetime one day and then decrease quickly the other. Investing in the stock market might be risky, but according to research, the Disney stock is better than the SanDisk stock because of the merchandise and franchise it has sold which boosted up sales the past five years or so.
Nowadays, with competition between companies higher than ever, stock prices of individual companies fluctuate more than ever. You really have to know the company you are investing in and know their history. My team in “The Stock Market Game” made investments in two promising companies. Apple stock has slowly, but steadily rose over the past 10 years and we choose this stock simply because we needed a stock that was stable and reliable. The other company we picked was Dollar Tree Inc, this stock was slightly less reliable and had a bigger risk but it shows to be a promising investment in the near future. If I were to find two companies to make long term investments in, It would be these.
Saletta, Chuck. "What Makes Genuine Parts Company's Stock Worth Owning? - DailyFinance." DailyFinance.com. 2 Feb. 14. Web. 20 Apr. 2014.
For these reasons, Caterpillar may not be a good purchase of stock. They may be doing quite well now, but what if you invest money in them, only to see your money possibly be dwindled away by another bitter strike, or individual sales were contrived.
Investing in stocks involves owning part of a company’s equity which effectively enables the shareholder to receive a portion of the company’s earnings and assets in form of dividends. Stocks are generally categorized as either common stocks or preferred stocks whereby common stock allow investors to vote on key issues but do not guarantee of dividends (Markowitz 78). Preferred stocks on the other hand do not provide voting rights but assure stockholders of dividend payments. Investing in stocks offers investors comparatively high returns relative to treasury securities but the investments also have high inherent risk. Stocks are purchased through licensed stockbrokers who range from the discounted order-taking online brokers, to the pricey full-service brokers and money managers (Sourd 112). Despite the type of broker an investor opts for, the stock market has the potential to generate high returns through an investment strategy. One of the main strategies employed is diversification which involves the purchasing of different stocks with varied performance and rates of returns in order to spread out the risk of the individuals stocks across a portfolio. Investing in stocks is therefore one of the most profitable alternatives of personal financial planning, and should be considered as one of the investment vehicles that generates an additional income stream.
This case discusses the unique value proposition of Dimensional Fund Advisors (DFA), which used academic research to create specialized portfolios focused on Small Capitalization companies. Their investment philosophy particularly focused on research by Fama and French and Banz. They researched how small cap companies tend to outperform large cap companies over time. In addition, FDA created an additional competitive advantage by created trading efficiencies to reduce transaction cost.
Nike is a solid company in 2009, from a profitability stand point. This was apparent in the Rates of return on sales, assets, and common stockholder equity. I would recommend Nike to a potential investor because of the reasons listed above, in this analysis. I would also recommend a thorough analysis of the Industry by researching at least tow of Nike's closest competitors.
In conclusion, I believe the best stock to invest in for the coming future would be Sony. With the new advances in technology happening every day, Sony can only increase in value. You may ask why Sony instead of one of its competitors? Put simply, Sony has a much broader range of products to offer. When compared to the rest of the technological world, Sony is the only way to go.
Many individual investors look at penny stocks like Wall Street’s Wild West, which is a natural world of investing but lately separated from media coverage that come up with stocks that are trades on big exchanges. Gaining and loosing is a part of penny stock world.
Investors in the stock market judge earnings growth against two figures: the average industry earnings and the estimated earnings for the company. If analysts predict earnings to be above the industry average, a company’s stock price will usually rise. If companies report earnings higher than predicted, stock price will typically rise even more.
Johnson and Johnson has been trading above both its 50 and 200 day averages and is promising. Its current market position is very attractive as it may become a market leader when the DOW turns around. Johnson and Johnson’s undervalued price, market position, and earnings make it a good pick in a sea of ambiguity.
...ting in Amazon.com might be beneficial because everything that the company offers applies to a mass amount of people. This gives the company a great ability to grow with the times and have their services stay in high demand, this proves true through the almost constant rise of the stock. Facebook might be a good choice to invest in simply because of how popular it is to people using it. The stock has shown a steady increase for a while, and I don’t see a decrease in its popularity happening any time soon, which would make for a good investment. Overall, you can never be sure of the best stocks to invest in because the stock market can change on a dime. However, with using the best available strategies to choose your stocks, and of course with a little bit of luck, having shares in the stock market can be a very financially beneficial decision to anybody who invests.