http://profitableinvestingtips.com/penny-stocks/what-to-look-for-when-picking-penny-stocks
What to Look for When Picking Penny Stocks
Penny stocks can be attractive because they are in fact cheap. But what do you look for when picking penny stocks and how do you profit instead of losing your investment? History provides some insight. First, Investopedia defines penny stock.
A penny stock is a stock that trades at a relatively low price and market capitalization, usually outside of the major market exchanges. The term itself is a misnomer because there is no generally accepted definition of a penny stock. Some consider it to be any stock that trades for pennies or those that trade for under $5, while others consider any stock trading off of the major market exchanges as a penny stock. However, confusion can occur as there are some very large companies, based on market capitalization, that trade below $5 per share.
A penny stock with which you could have made money was the old Chrysler. At the start of the 1980’s Chrysler, a 50-year-old automaker was in trouble again. Its stock was selling in the single digits instead of at $40 where it was usually positioned. Then Lee Iacocca came from Ford and took over Chrysler. Here is what The New York Times had to say about Chrysler and other 10 super stocks of 1982.
WHO would have thought 12 months ago that Chrysler, the much maligned auto maker, or Winnebago, the once hapless manufacturer of recreational vehicles, or Pulte Homes, a builder, would not only weather one of the worst recessions ever but then soar past a stock market that was registering its biggest advance in history?
Chrysler was most certainly the surprise stock of the year, beginning just above $3 a share and breaking the $18 mark. And it was still spiraling upward in the final weeks of December. The No. 3 auto maker had cut costs to the bone to avert bankruptcy and had entered 1982 a shadow of its former self, needing sales of only 1.1 million cars and trucks to break even, versus 2.4 million a few years ago.
The stock subsequently went to the $40 range and those who knew what to look for when picking penny stocks were amply rewarded. What to look for when picking penny stocks is evidence that the stock has intrinsic value, a forward looking income stream.
4. http://profitableinvestingtips.com/penny-stocks/what-to-look-for-when-picking-penny-stocks
Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss these free training events!
http://www.profitableinvestingtips.com/free-webinar
Forex Conspiracy Report
Read every word of this report!
http://www.forexconspiracyreport.com
Get 12 Free Japanese Candlestick Videos
Includes training for all 12 major candlestick signals.
http://www.candlestickforums.com