Why Buy Penny Stocks?

Why Buy Penny Stocks?
By www.ProfitableInvestingTips.com

http://profitableinvestingtips.com/penny-stocks/why-buy-penny-stocks
Penny stocks are cheap but are they
good investments?

Why buy penny stocks? For that
matter what is a penny stock?
According to Investopedia:

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A penny stock typically trades at a
relatively low price and has a small
market capitalization, usually
outside of the major market
exchanges.

These stocks are generally considered
highly speculative and high risk
because of their lack of liquidity,
large bid-ask spreads, small
capitalization and limited following
and disclosure.

They often trade over the counter
through the OTCBB and pink sheets.

So, why buy penny stocks? Most
penny stocks deserve their low price
but there are diamonds in the rough.

Trendshare poses the
question, should you buy penny
stocks?

You must do your research to find
any good stock.

Plenty of stocks are undervalued, but
to prove that you must understand
their business.

Why is the stock price so low? Is the
company struggling?

What are the chances it will succeed?
Most of these businesses are risky
gambles, and they’re obvious even
after a few minutes of looking.

That’s why penny stocks are bad.
Your research time could pay for
itself.

Because so many penny stocks are
bad investments and even subject to
pump and dump price manipulation
most investors avoid this entire
market niche.

That having been said there are good
penny stocks that will make a lot
money if you find them.

How does that work? You can do all of
the research yourself or you can use
the advice of market analysts.

Penny Stock Suggestions

Money Morning routinely offers
penny stock suggestions.

Here are their 5 top penny
stocks from a recent article.

Today we’re bringing you our
updated list of the top five penny
stocks this week.

All of the penny stocks in this week’s
list delivered market-busting gains
last week, with the top-performing
stock rising over 170%.

Money Morning updates our top five
penny stocks list every week for
readers.

We only add stocks from the most
reputable exchanges, like the
NYSEMKT or Nadsaq, to our list.

That’s because these exchanges
require more rigorous financial
standards than Over-the-Counter
(OTC) markets.

It is important to note that they do
not pick penny stocks from OTC
markets but rather stocks that are
held to higher financial reporting
standards, which makes analysis
more accurate. These are their most
recent picks.

•Lucas Energy, LEI
•International Shipholding, ISHC
•Ekso Bionics Holdings Inc., EKSO
•Novavax Inc., NVAX
•Neonode Inc., NEON

Lucas Energy is a depressed energy
stock while International
Shipholding is a maritime shipper
and a turnaround play.

Both of these stocks get better if the
economy improves.

Ekso is a fast growing company that
makes exoskeleton devices
or wearable robots.

It this stock succeeds it will be
phenomenal.

But remember what Warren Buffet
says about picking stocks in fast
growing sectors.

You can predict that the sector will
grow but it is hard to predict the
individual winners.

Novavax is a biotech company that
makes vaccines with a proprietary
synthetic gene method.

Like other biotech companies this one
could soar to huge profits as the
biotech sector grows but picking
individual winners is tough.

Neonode develops optical sensing
technology that turns surfaces like
tabletops into touch screen surfaces
for smart devices.

The same promises and same
cautions apply to this stock as to other
high techs.

With all the trouble picking winners
why buy penny stocks?

Adding a reasonable number of well-
chosen penny stocks to your portfolio
offers the possibility of an investing
home run or two with hundred fold or
even thousand fold gains.

Why Buy Penny Stocks?

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