List of Penny Stocks

Best Penny Stocks - Factors in Selecting The Best Penny Stocks

Penny stocks is defined as stocks that trade at relatively low price usually done over the counter (OTC) by means quotation services such as the OTC Bulletin Board or the Pink Sheets. Most people characterize penny stocks as those that trade for “pennies” or under $5. Some think of it as any stock that trade outside the major market exchanges.

These types are considered to be highly speculative or high-risk investments due to their limited liquidity, small capitalization, and limited financial tracking and disclosures. In fact, some statistics show that 70% of investors end up loosing money on penny stocks. This isn’t saying though that penny stocks are one hundred per cent loss for interested shareholders. There are instances where investors have actually gained from this kind of investment. Getting into penny stocks is a risk one must be ready to take.

A list of penny stocks is easily accessible from brokers that specialize in this type of stock. Stock lists are also gaining popularity online with subscription made easier for interested traders. How to find the best penny stocks may take quite sometime for new investors. To start with, you can get the service of an investment advisor. He or she can give you expert advice and can help you avoid investment mistakes.

As penny stocks are often volatile, no one could safely vouch on the list of the best penny stocks we have in the market today. There are names that come up every so often; yet given the unpredictability of penny stocks, the best approach instead is to provide a beginner with a list of the best penny stocks factors to consider.

The following may be of help in selecting the best penny stocks:

Cash Flow. Remember that the best penny stocks are those with adequate cash flow. As these are emerging companies, they need plenty of cash flow in order to stay in business.

PE. PE or what we call price to earning ratio is another thing to watch for. Although you have to keep in mind that calculating PE is quite difficult for a penny stock that changes so very often.

PEG. PEG refers to Price-Earnings-Growth factor. Of course, the best penny stock will have a low PEG factor.

Management. Proper management is one factor to keep the company going. I’d say, the best penny stock must have the best management.

These days, there are several means made available for newbies to help in searching for the best companies and managements so the chance of committing huge mistakes is lessened to a certain degree.