Penny Stocks, Hot Penny Stocks Alerts, tips and more

Stock Crash: Fear And Caution

Thu, 20 May 2010 16:25:35 -0400

Sometimes small mistakes can be the cause of much more extreme reactions. Many say that investors have a herd mentality, and while this is not necessarily true, there are times when the actions of the market seem indistinguishable from a fearful mob. Recently, a simple typo helped send all major indexes plummeting for the day.

Now this sort of mistake is rare, but it does highlight many of the issues inherent in the financial system. Not only does human error play a large factor, but the dissemination of information does as well. Risk in the system is largely the result of factors investors cannot simply take account of, like human error. No one could expect that an institutional holder would accidentally sell off billions of dollars Procter and Gamble (PG) instead of millions. But the reaction of the market is where the real problem lies.

The problem is inherent, and most likely impossible to fix. It is based in the speed necessary for many investors, especially the big guns on Wall Street. They need to move around large accounts based on the slightest hint that there are opportunities or dangers. As such, when the accidentally large sale happened it sent large, worried shockwaves to anyone looking at the market. When people are poised for quick movement at danger, which is a requirement of the job, reacting is more important than second-guessing.

This reaction, which happened Thursday, May 6th, dropped PG by over $2.00 and the downturn lasted a little over one day. The fear investors faced was magnified due to limited sources of information. Namely, when news is fresh, it leaks among those that receive it, but may not have reached the ears of other news outlets yet. As such, there is little to no opportunity to review this information, or in this case, why so many shares were sold.

The speed of information dissemination is only limited by the speed at which one can write about it. This however does not guarantee quality information. Everyone involved or interested knew what had happened, but few knew why. Thus, the first wave of knowing set off the run to sell PG stock, since it is best to be quick and safe than to be too slow. The second wave came much later, as investigation produced the truth, which sent the stock back up as if nothing had happened.

PG, having a spectacularly bad day, was hit by more than just accidental selling. Since information sharing is so powerful, it gives many more people the opportunity to have their voices heard. Unfortunately, since anger and fear a such primal emotions, they carry much weight even if unjustified or unverified. When an angry mothers words came out so strongly against PGs Pampers With Dry Max through her blog and was carried by her supporters, the negative attention received was terrible.

In uncertain economic times, where both individuals and companies are frequently feeling in danger, a small spark is needed for the fire. In this case it was simply accusations by a mother concerning diaper rash that made the call to arms and created a large lash-back against PG. This unfortunately culminated into a class action lawsuit and played into the large drop that occurred.

All in all, the market moves as best it can, but these movements may not necessarily be based on truth. This is all the more true in penny stocks, where the hint of success or failure creates huge waves. The markets are unpredictable, but they trend based on the information available, and misunderstandings are corrected quickly after the truth is clear. Keep your ears to the ground and you can be the first to react to te real news, not just the hype of fear.

Clinical Trial Results Could Send Vicor (VCRT) Up Higher

Wed, 19 May 2010 11:55:25 -0400

Biomedical advances continue to fascinate and befuddle the minds of people everywhere. Sometimes our real-life progression into the realm of science fiction is eerily apparent. One company, Vicor Technologies (VCRT), shows us the limits of predictive science available to us. Their stock has been climbing recently and will likely continue to do so with news of their latest clinical trial having just been released. Despite this climb however volume is still low, perhaps making this stock difficult to purchase or sell in large quantities.

Vicor Stock has been notorious for having large highs and lows over the years. The most recent gain has brought their stock thus far to around $0.80 from close to $0.50. The last few years have seen several such gains and falls, making it quite a good stock for anyone able to predict when the stock will rise or fall. Stock price rose initially due to news that Vicor received a Notice of Allowance. This allowance was for its U.S. Patent Application No. 10/359,363 for a method of treating ischemia through administration of a biologic identified through Vicor's state dependent drug discovery platform. Upon issuance, this patent will provide Vicor with patent protection for methods of using a peptide to treat infarctions, such as cardiac or cerebral infarctions.

Vicor Tech is a bio-technology company focused on the development and commercialization of innovative, non-invasive medical diagnostics using its patented PD2i technology. This technology is based around non-linear algorithm software which attempts to achieve early identification of ‘disease states’ amongst at-risk populations, without the need to use high cost and invasive procedures. Examples of populations in need of such identification include the 12 million at-risk cardiac patients, 23.6 million diabetics and 38 million trauma incidents that exist.

The PD2i is predictive software used in conjunction with equipment used to listen to the heartbeat of an individual. Rather than looking solely at the heart, PD2i uses the interaction between the brain and the heart to see how at risk an individual may be to sudden cardiac arrest. The subtle patterns of the heartbeat are analyzed by the PD2i software over a 20 minute period, where the individual being studied is at rest, performs controlled breathing and Valsalva maneuvers, where one blocks their nose and mouth while attempting to exhale.

This fascinating piece of technology has shown statistical significance in the results for their recent ‘MUSIC’ trial of the software. Wojciech Zareba, M.D. Ph.D. the Principal Investigator at the University of Rochester said, "These results are of major importance for risk stratifying heart failure patients who are eligible for therapy with an implantable cardioverter defibrillator (ICD) or cardiac resynchronization therapy with defibrillator (CRT-D). Currently, only about 30-40% of heart failure patients eligible for this therapy receive devices.” Should this begin to increase the accuracy and rates of eligibility of implants, this technology will become popular quickly. Not only will lives be saved because of it, but there is also money to be made from it. The more patients who can receive an implant, the more a hospital will be paid, making this a double incentive to introduce this technology.

Investors have yet to react strongly to the news of this morning’s clinical trial results, making this an excellent potential opportunity. On the other hand since stock prices have risen sharply recently, investors may be shying away from jumping onto a stock that may have already peaked.

Advanced Clean Technologies (ACLH) Back Up

Thu, 13 May 2010 12:35:28 -0400

Sometimes it pays to be a specialized, niche company. With the recent oil spill in The Gulf of Mexico, Advanced Clean Technologies (ACLH) stepped up and offered their services in the clean up which will take some time. Their wholly owned subsidiary, American Petroleum Solutions, has an oil extraction technology which should be able to remove over 99% of the oil from sand, clay and other earthy materials. This not only has benefits with the recent disaster, oil companies looking to maximize extraction from oil and tar sands also can use this technology.

The stock recently had a huge upward trend as they announced their support to clean up efforts in the gulf. Prices jumper over 1000% in a short 2 days. After the initial jump, prices fell down quickly, creating a heavy up-down pattern rarely seen. It may be due to the hope of those watching the crisis in the Gulf unfold, having share prices fall each time there seems to be major headway.Their most recent hopeful attempt has been to cap the leak and pump it rather than have it spll into the ocean.

Daring investors could have reinvested into ACLH each time it dipped after selling somewhere near the peak for huge gains. This huge volume, high volatility stock is a gem for risk taking investors, having prices thus far fluctuate between a little higher than $0.025 and close to or above $0.050. The longer ACLH stays involved in the cleanup the more proven their cleaning methods will be, perhaps giving their product some well deserved exposure.

Their cleaning technology is based in a liquefying solution, which allows oil, when in other material like sand, dirt or sludge, rise to the top easily. The use of high pressure hoses help as well, cutting through the sand particles to reach below the surface, making contact with oil that may have seeped deeper. This may not be the best for marshland, like seen in The Gulf of Mexico, having to tear through some of the vegetation growing there with the high pressure hoses, but since their solution is eco friendly it is far better than the alternative of leaving the oil sit there.

Advanced Clean Technologies Inc will be busy in the following weeks and months, and will gain recognition for their help. While working with the other major players in the oil industry to fix the spill, ACLH may be scouted to help with extraction for other projects that exist. If a strong marketing campaign is taken up by ACLH, be sure to expect another large boost in price, although it will unlikely be higher than the first.

ACLH is in a good position to benefit from this unfortunate disaster, keep an eye on the progression of the spill, and know that the more the coast is afflicted, the bigger a job ACLH will have to do, which is what pushed stock prices up in the first place.

For the most Recent Estimates on the spill, click HERE

For more on the oil spill please refer to the video below.

Article Courtesy of MonsterStox.com

American Petro-Hunter (AAPH) Climbing Steadily

Tue, 11 May 2010 13:58:24 -0400

The oil industry is doing well across the board, other than the large spill in the Gulf of Mexico, of course. A good example of that is American Petro-Hunter (AAPH), who has been climbing steadily in stock prices over the last month. Their prices have risen a little above 40% since the beginning of April, but this stock has seen some very notable jumps in price since early 2009.

AAPH has recently hit price highs not seen for almost a decade. This could be a good time for them to make their move back up to their former glory, with oil prices creeping higher and higher every month.

AAPH's North Oklahoma Project is beginning to kick into high gear, giving good reason for share prices to become boosted. They are expecting an excess of 350 barrels per day from their well No. 1. This project has higher potential than just that, with a possible 8 more wells being drilled on 40 acre spacing in the area. They expect production of high gravity light oil to begin mid-June. Keep this date in mind when deciding when to purchase shares of AAPH, since prices may jump high once news of their production is confirmed.

Insider trading may have been some indication to American Petro-Hunter success, this past February. A total of 250,000 shares were bought by some of the executives in AAPH. The most prominent purchaser was the CEO of AAPH, Robert Mcintosh, who purchased a full 200,000 shares, shortly before share prices jumped to the highest they've been since before 2002.

The prices of AAPH really began to take off shortly after the resignation of one of their past presidents, Gregory Leigh Lyons, in April of 2009. Price very quickly jumped over ten times and stabilized not far lower than the peak.

With oil prices rising and production beginning soon for AAPH, this seems like a very good time for them. With an expected 3 million potential barrels of oil from only their Rooney oil Project in Ford County Kansas, AAPH is in for some good returns in the coming years.

For more on their Rooney oil Project, refer to the video below.

Altair Technologies (ALTI) Makes Strong Turn Upwards

Wed, 05 May 2010 11:56:49 -0400

Some of the best penny stock investments can be made in companies that are not accustomed to being penny stocks. Since larger companies are well versed in forms and fillings and have proven professionalism, if they should fall into the penny stock range they will keep many of their good habits, and make for far more transparent penny stocks. An example of such comes from the clean energy company Altair Technologies (ALTI) who is in the midst of what looks like a strong upturn.

Altair has hit what seems to be the bottom of a bearish trend recently, coming up around 20% so far from last week. This new trend was initiated by several sources, the most important of which has been the announcement of a large new contract. ALTI has had success with one of their previous customers last August, and has received a similar order to immediately fill end customer requirements concerning electric and hybrid electric busses. The total of these two orders tops $1.6 million.

Tomorrow, May 6, Altair will be holding a conference call for their first quarter results. Expectations are high and if it proves to be good news expect the stock to shoot up even further. Another notable event this month for Altair will be on May 11th, concerning MDB Capital Group 1st Annual Bright Lights Conference, which showcases 50 of the most innovative publicly traded companies, ALTI included, in technological leadership. ALTI's CEO, Terry Copeland, PhD, will be present and a webcast of the presentation, including audio and presentation slides will be accessible HERE the day of the presentation, and be archived for future retrieval.

This event was populated by the top companies out of over 1,600 small caps, ranked based on different scores, strengths and breath of patents held. This is a boon for ALTI, with obvious recognition and a chance to show off their highly acclaimed technology they may be seeing more contracts in the near future. Be sure to stay up to date on the conference call and next week's showcase of ALTI, it may bode very well for investors.

For more information about ALTI, Skymark Research has initiated coverage of Altair. They are offering free subscriptions so anyone may view their reports.

For more on ALTI and their methods, here is a video by them highlighting some of their technology.

ENTI Rebounds Hard

Mon, 03 May 2010 16:06:34 -0400

The internet is home to many of the most creative minds in the world. Many companies are attempting to break into the different spheres that exist online and somehow make consumers out of them. One company which is well on it's way to success is Encounter Technologies Inc (ENTI). Currently working with the music giants like Sony Music Entertainment (SME), Warner Music Group (WMG), EMI, and Universal Music Group (UMG), it is bringing something unique to music lovers.

ENTI has seen large gains of over 500% over the last month. this has been in part due to the excitement of their recent news and progression of potentially huge money makers. ENTI peaked today at $0.08 and looks like it could continues as well. Thier innovation lies in their creative use of niche market targeting and the power of online communities. They have several projects bringing in revenue, all of which have their own potential.

What ENTI is looking to bring to the internet is, through one of their projects, a music based community that is involved with editing music and music videos. Their flagship project, called Music Matrx, will offer prizes and other incentives to their paying members to get them active and involved in the online community. Users not interested in editing music videos will be given incentive to drive traffic to the site and promote the featured artist or song as well as purchase songs, ringtones, and videos.

Their system is supposedly intuitive and simple to use for editing the different resources available to members. They also wish to improve the overall video streaming experience with top quality sound and video. They expect over $20 million in gross revenue to be produced from only MusicMatrx.com, with over 800,000 monthly paying members as of June of next year.

One other area of success for them is their video sales aid produced for the yellow pages publishing industry. This helps small business owners advertise with video online with yellow pages publishers. They help facilitate the use of online video to advertise the products of their customers. This goes from cradle to grave, in the sense that this program starts all the way from the film shoot, helping businesses with even the difficulty of production. This project is expected to bring in over 11$ million in gross revenue, separate from the earnings listed earlier.

For a penny stock ENTI seems to be pulling strong numbers, and this is aided by the recent financing agreement they reached for further development of their Music Matrx website. Spire Investment Group has agreed to finance up to $10 million for the June release of their website. They have so far received over $300,000 and expectations are high.

All in all ENTI is looking pretty strong and expect a large jump sometime around June 1st with the announcement of their fully operational site. Liquidity will not be an issue as volume is very high. Enjoy the ride on this one, it could get pretty big with the right news of success.

FREE EXCLUSIVE REPORT - BROKERS

Fri, 30 Apr 2010 14:11:13 -0400

We all know about brokers, but we don't necessarily know which are the best. We've looked through some of the biggest names out there to show you how they rank up. We want our members to be well informed and to be empowered investors, and knowing more about the brokers available can help!

You can find our FREE REPORT here. Keep reading to see our analysis!

For anyone wishing to get the FULL REPORT, with more than ten brokers and our exclusive analysis of our TOP BROKERS, become a Premium Member today!

As a small disclaimer, these prices are only for online trades. Any prices for phone assisted or broker assisted trades have not been listed. Please review our claims prior to signing with a broker too hastily, our numbers may become outdated at any time after our initial publication.

Broker Analysis

Our list covers some of the more well known brokers out there, Zecco, Scottrade, Charles Schwab and Share Builder. Zecco comes out on top of these, offering deep discount prices and many helpful tools for new investors.

Zecco's major drawback is the complete lack of mobile support, which is almost unacceptable in a modern trading environment. Their online community is helpful, but may not add any value to some investors. While some brokers have more professional tools and resources available, their deep discount, flat rate pricing cannot be matched. This is a huge discount for frequent investors and small cap investors.

Zecco is the top of this list, but how did it fare against ALL the brokers in our PREMIUM REPORT? Find out by becoming a Premium Member today!

Scottrade, Charles Schwab and Share Builder are plagued with similar but different problems that limit their usefulness for anyone looking into penny stocks. While their tools for investors outweigh what Zecco offers, their painful pricing schemes make them very unattractive.

Scottrade has a decent trade cost, but they lose our support when they introduce a surcharge for shares under $1. While the added cost comes to only $5 for every $1000 invested, it can still be a burden for investors. Scottrade, however, is the only broker listed here which has excellent support for mobile users, making them fall into second place.

Want to find out which other brokers offer mobile support? See the FULL REPORT by becoming a Premium Member and find out!

Charles Schwab on the other hand has even higher rates, a larger account minimum and a share limit per trade. While normally 999,999 shares is plenty, for penny stock investors it may be too limiting. Further, their lack of mobile support places Charles Schwab in third place.

Afraid of hidden share limits or other hidden costs? Find out which brokers have them by becoming a Premium Member and getting our EXCLUSIVE REPORT!

Share Builder falls into last place primarily from their high initial costs, as well as their ridiculous surcharges. For almost any investor a 1,000 share limit, with per share charges for going over is unconscionable. For penny stock investors it is almost totally out of the question.

Remember, as investors, staying informed is your greatest asset, and we're here to help! I hope you found some value in this report, and be sure to sign on for our Premium Membership if you want the full broker list and want more in-depth analysis.

Premier West Bancorp (PRWT) Does U Turn And Begins To Climb

Fri, 23 Apr 2010 11:12:08 -0400

Premier West Bancorp (PRWT) has seen some rough days. Luckily their fortune has changed for the better. After seeing a large drop in share price, starting as far back as 2006, PRWT is finally ready to pick itself back up again. At the beginning of this month, PRWT seemed to have bottomed out and has since began a steady climb, totaling slightly over a 100% gain to date.

The first means that PRWT used to get their value back afloat was financing themselves through the issuance of new shares. Over $18 million was raised from the sales of new shares to previous owners of PWRT. This share sale was then opened to the public, where another $14 million or so was raised by new purchasers of the stock. This will be setting up PRWT to be well set for the coming quarters and future expansion of their projects.

One thing of note which must be covered is the enormous amount of insider trading which transpired during this new issuance of shares. Since this past March, a director of PRWT named Georges St. Laurent, purchased over 8 million new shares. As well, it seems that over 20% of the newly issued shares are now in insider hands. This should have been a clear warning for everyone back in March that something big was coming. There was a temporary boost in stock prices, but it has since fallen and climbed even higher. Such confidence in their own stock, to buy millions in shares, is a bullish sign indeed.

This recent vitalization in funding was more than enough to put PRWT capitalization above necessary levels. With more leverage than necessary, PRWT is now categorized as a 'well capitalized' firm. This needs to be improved even more, however, due to a Consent Order with the FDIC and Oregon Division of Finance and Corporate Securities to increase the leverage ratio to 10% from its current 8% by October of this year.

PRWT seems to be strengthening its position and is taking steady steps to expand programs and secure good capitalization. Who knows how high this one will go, but it is making strong moves now and is getting loads of volume, proving its value at least in the short term.

Lighthouse Petroleum (LHPT) Keeps On Giving!

Thu, 15 Apr 2010 13:21:54 -0400

As the name suggests, Lighthouse Petroleum Inc. is an oil and natural gas exploration company. This is an excellent pick for any active investor who wishes to add a strong energy company to their portfolio. LHPT is based in Salt Lake City, Utah, and wishes to acquire new assets in both the Permian Basin and the Wind River Basin. Their current area of interest is the 3,300-acre prospect in Wyoming called Diamond Springs.

The Diamond Springs area is a very valuable resource for several reasons. Not only has independent research shown that there is an expected 4.3 million barrels of oil, but as well that most of it is in shallow wells, which is a large money saver. This has been estimated to be worth $250 million, but with oil prices rising steadily, expected to reach $96 a barrel next year, the worth of The Diamond Springs prostpect is more than likely on the rise as well.

At the beginning of this year, LHPT was bottoming out on a long and severe drop in price. This signaled the beginning of an opportunity for investors as LHPT began to climb. This growth peaked at around 500% from early January levels, but the opportunities have not ended there. The real treasure of LHPT has been the recurring ups and downs, highs and lows. These have been thus far at least around 100%, and LHPT is coming down from the third of such moves, climbing all the while.

Now a lucky investor would have been able to make 500% from buying LHPT at the lowest point and selling at the highest, but a cunning investor would have maximized their gains even further. The lucky investor would have made $500 on an initial investment of $100, which is amazing to begin with. However, being able to react quickly and keep a watch for opportunities could have gained another investor much more through reinvesting won earnings as price fell. Following that strategy, with the same $100, a smart investor at best could have made 3 times more with only the same initial $100! Simply by playing on the large up and downs in a stock that is currently following a pattern opened doors to new heights of profits.

This is however, very risky, and should not be attempted lightly. These patterns are rare and often do not happen in a magnitude that one can benefit from. But these large 100% jumps and drops have huge potential, and can even be benefited from with more caution, reinvesting only portions of the earnings to keep from risking all potential earnings. The beautiful thing with stocks however is that one can only lose the initial investment, where one can gain many times that in profits, which benefits a large and diverse portfolio.

LHPT seems to be heading on the right track with their business management and this has been shown in their share price rising. And for the riskier investor, there seem to be many opportunities for frequent buys and sells for huge gains. This stock is STILL increasing in volume, which may affect this variability, making it more or less profitable for such pattern tactics.

GSI Technology (GSIT) Looking Strong With Breakout Potential

Wed, 14 Apr 2010 14:35:30 -0400

GSI Technologies (GSIT) is beginning what looks like a marked rise which could turn into a full blown breakout. We are seeing increased volatility and volume moving faster than it has in months.

GSIT is a strong looking stock because of the yearlong, upward trend we've been seeing. It has grown over 150% since around the same time last year. And Currently it is pushing upwards fast and hard, growing almost 20% since last week. While the current price level makes it impossible to get explosive gains like penny stocks that reside below the $1 mark, this strong upward trend over such a long period of time makes GSIT a very stable and profitable choice.

GSIT develops and markets static random access memory (SRAM) products that are incorporated primarily in high-performance networking and telecommunications equipment, such as routers, switches, wide area network infrastructure equipment, wireless base stations and network access equipment.

Reports of expected revenue range from between $19 million, as a conservative estimate made by analysts, and $21 million for the fourth quarter results. A conference call will be held to allow any investors or interested parties to listen in on the announcement and review of the final results.

FOR MORE INFO ABOUT THE CONFERENCE CALL CLICK HERE

Through the Export of the fabrication of their hardware, GSIT is able to be very competitive in their production. This also allows them to focus on research and development, improving their product to keep up with the demands of a fast paced industry.

Almost all analysts agree that GSIT is outperforming expectations, which is helping to drive their share price up. GSIT also has an operating margin of 18.6% on trailing 12 months sales of $60 million and sales growth of 16.8%.

GSIT is stable in it's pattern, but in the short term we may see a brief pause in growth. If the past is any indicator, this stock will be heading higher within the next weeks and months. This will likely happen after the price falls below GSIT's moving average briefly or stabilizes in one small price range. This can be seen as well through the Relative Strength Index (RSI). Each time we have seen the RSI dip notably below the 30 level, marking the stock is being over sold, it takes back to climbing quickly.

Things to Consider When Choosing a Broker

Mon, 01 Feb 2010 14:09:54 -0500

Once you get started, selecting a broker is a step which requires quite a bit of thought. There are basically two types of brokers, traditional and discount. The traditional broker fundamentally means that you will have a personal stock broker with whom you will work with. The stock broker will always be accessible via one telephone call or email and is always available to offer you advice or resources for further investigation. Further to being able to advise you on the prospects of your investments, a traditional broker will also make assessments on the performance of your portfolio. However, the price for this tup of one-on-one customer service will be a higher commission on your investments.

On the other hand, quite often you may find yourself purchasing and selling stocks frequently (especially in the case of penny stocks), therefore it may be advisable to use a discount brokerage account. Discount brokerage accounts contrast the traditional brokers because they work more as a "do-it-yourself" account. There is significantly less contact with a broker (unless you execute your trades via telephone; in which case you speak with a random broker), as you will be executing your trades online. Although typically you will not get any advice on your investments, there are discount brokers that do make available resources in order to further your research on investments. The size of the commission of a discount broker can vary, however extent of the commission usually is based on the quality of the service and the speed of the executed trade.

Other elements to consider when choosing are minimum opening balances and fees. Many brokerage firms require a minimum of $1000 to open an account, although there are some who ask for less, and a significant number of firms may ask for even more. However, be weary of the accounts that ask for a lower fee as they may be imposing other maintenance fees if your balance drops below a given amount. Another final thing to consider is the easy accessibility to services, tools and research using your account online. First off, it is important that you like company's interface and that it be easy to navigate. You should check the website of different firms in order to see what they offer. Some will be able to provide you with an instant examination of your portfolio and investment history, while other will be able to offer you countless resources in order to investigate an investment. Lastly, have a look at the firm's policies in order to see if they compliment your investment goals. Keep in mind that some firms may not offer all these service and tools online, so browsing brokerage firms online may help you in deciding which is the one that best suits your needs.

The Most Common Risk

Tue, 26 Jan 2010 11:03:30 -0500

The most common and significant risks of penny stock investments are unsolicited stock picks and stock advice that have come through either spam emails, telephone calls or even fax messages. Newsletters can also be risky as well, even though the information about the stock and its progress may be correct, it may also be possible that the email is leaving out some relevant information that would make you want to pass.

Benefits

Tue, 26 Jan 2010 11:02:30 -0500

One of the most provocative aspects of penny stocks is their potential to garner incredible gains with a minimal investment; the extent of the rewards is simply a matter of choosing the proper stock at the proper time. Many investors view penny stocks as an entry in order to gain stake in emerging prospective companies before they become lucrative. For those who are new to trading, it is an excellent way to learn about stock market fundamentals with minimal commitment - it is easy to see why over time we are seeing an increase investors of all age groups and skill levels participating in penny stock trades.

Getting Started

Tue, 26 Jan 2010 11:01:30 -0500

Buying a penny stock is not unlike buying a regular stock; the main difference is that penny stocks trade on different market exchanges so one will need to know where their stock of interest is trading before setting up an order. A brokerage account is necessary in order to execute trades. Very often, you may find yourself purchasing and selling penny stocks frequently, therefore it is advisable to use a "discount brokerage" account as they allow you to trade penny stocks at less than $10 a trade - because many of the stocks are being traded on the OCTBB, brokers take a commission based on the transaction.

About Penny Stocks

Tue, 26 Jan 2010 11:00:30 -0500

Penny stocks are often considered to be stocks that are traded for under $5 a share. Penny stocks have become popular because of their potential to bring in massive gains with little investment (imagine a 10 cent share rising to $10.00). On the other hand, penny stocks have also been known to be unpopular due to the risks involved such as lack of corporate transparency and stock volatility due to stock promotion and pump and dump schemes. Buying a penny stock is not unlike buying a regular stock; the main difference is that penny stocks trade on different market exchanges so one will need to know where their stock of interest is trading before setting up an order. Furthermore, penny stock traders are not slowed down by strict requirements when it comes to trading their shares.

For New Investors: How to Invest Wisely

Tue, 26 Jan 2010 11:00:02 -0500

Before getting your feet wet, you may want to consider "practice trading" with fake money or with an online practice trading account. For those with less trading experience, it never hurts to keep your initial investments low until you begin to get a good grasp at trading. Always remember to practice due diligence - make sure you research the company and the product or service they are offering, as well as their prospects for the future. IT is incredibly important to do this research if you find that you do not have the patience or the time, then you should contact a stock broker for assistance. Lastly, and perhaps one of the most important rules of investing wisely, never put all your eggs in one basket. A well balanced and diversified portfolio is probably the best way to keep your investments safe in both an up and down economy.

Choosing the Right Time to Sell a Stock

Tue, 26 Jan 2010 11:00:01 -0500

There are many situations in which you may think about selling a stock; most notably when the value has dropped, when there has been no change in a stock's value over a significant period of time, and when a stock has risen to or above the target you established when you purchased the stock. One thing to consider is whether or not the company's fundamentals continue to be strong. This type of information can be obtained from the Securities and Exchange Commission, which produces corporate filings free of charge (e.g. freeedgar.com). Things to look out for are a company's earning trends, changes in management, and revenue growth. If a company's foundation is solid, you may want to consider holding on to that stock a little longer if the price of the stock increases or dwindles. Another thing to be on the lookout for is competition - beware of a popular new player or players entering the market; it may potentially be a danger to your stock's value. Consider the company's product - if it is dependent on one single product and has no plans on diversifying, you might want to contemplate on selling the stock. Lastly, taxes should always be kept in mind, especially if you have taxable capital gains. In this case, you may think about taking some losses to reduce your taxes.

Choosing the Right Time to Purchase a Stock

Tue, 26 Jan 2010 11:00:00 -0500

Remember "buy low and sell high"? It's not as easy as many imagine. These days choosing the right time to buy a stock requires a bit of research and investigation. First, one must analyze the company making the stock available (you can check out resources such as Google Finance, Yahoo! Finance, CNN Money, etc.) Things to look out for are the company's history, it's growth and price-earning ratio (also known as P/E ratio) - make sure to examine a company's revenue and profit margin from public filings, as well as any potential prospects of growth in the future. Upon buying shares, one suggestion is to purchase shares in batches - if you have confidence in the company but the price keeps declining, buy more. However, other's suggest that if it continues to drop and you have lost 10 per cent of the value, swallow your losses and pull out. Many believe that unless a company is in serious decline, it is worth the wait to hold onto a stock for the long-term even though one might get a substantial profit by buying stocks before their earning, however one might lose quite a bit of money if the report is not great. Finally, be sure to keep a good eye on your money and watch how the market reacts, paying close attention to market indexes such as the Down Jones Index and S&P 500.

Other Risks

Tue, 26 Jan 2010 10:04:30 -0500

It's important to keep in mind that penny stocks are also risky in nature because they are often sold by new companies looking to raise capital, or they were a stock that had been de-listed and is now being traded over the counter due the company experiencing financial difficulties. A disadvantage of stocks that trade over the counter is that companies are often not obliged to make their finances public. To avoid investing in a such a company, it is best to purchase and sell stocks that are listed on premiere exchanges such as Nasdaq SmallCap, Nasdaq National, AMEX, and some OTC-BB.

Lack of investor interest and over-hyped stocks have been another risk factor in penny stock investments. This can be spotted out by watching how often the stock trades in a day. It is best to look out for a stock that trades at least 20,000 shares/day. Keeping over-touted stocks in check is best done by doing your own due diligence; research the stock, and research the company and its prospects.