Are There Great Penny Stocks?

[Bill Mansfield]

Whether or not you are able to make money from a stock or any stock depends entirely on the underlying company's ability to be or become successful. The efficiency of a company in its industry or the market in which it sells its products and services pushes the financials of the company which in turn rewards you as an investor. When you go through the financials of a company, be it the total amount sheet or income statement, you want to see solid growth in the company's earnings per share, a reduced debt to equity ratio and growth in the company's income before taxes consistently over a few quarters, if perhaps not years. The absence of solid economic data must be an indicator that the business may not represent an excellent investment for you.

What's a Penny Stock?

A dime stock is any company's stocks that are dealing at a per share value of $5 or less. These shares are of businesses who've low market capitalization, usually of less than $100 million and industry on over-the-counter on the NASDAQ message board or Pink Sheets. The Pink Sheets could be the old-fashioned list produced by the NASDAQ that record all low priced futures that are investing. Small cap stocks can offer tremendous importance to an entrepreneur provided the decision to choose the stock is founded on good information and not the nonsense of promoters of the stock seeking to create a fast profit.

How to locate Lucrative Very Cheap Stocks

An easy method where you can find successful small cap stocks is by taking a look at the track record of an organization whose shares are trading below $5. The news on the corporation should really be reliable and not based on regular earnings effects which can be submitted over and over on a web site and is not fundamentally distinctive from day to day. Additionally you wish to measure the company's profitability, taking a look at its earnings per share and other percentages. An organization carrying a high number of debt without reliable sources of income should really be viewed with caution.

There's nothing wrong with diversifying one's profile with some low priced investments like penny stocks, particularly those with a higher income potential. You should be aware however that the decision to include these stocks should be on the basis of the same objective criteria useful for different stocks you buy, e.g. Get More Info.