| There is no doubt that penny stocks are | | | | looking analysis. This is just waiting |
| a risky and thinly traded breed of | | | | and seeing which doesnt get you in on |
| stocks issued by relatively tiny | | | | the ground floor of and investment |
| companies. Also, the SEC does not | | | | before the public takes notice. |
| require penny stocks to follow their | | | | Investing ahead of an industry trend is |
| reporting rules. This combined with | | | | far better. So look for stocks in |
| unclear or unverifiable financials can | | | | industries that are the edge of more |
| make this stock seem like something to | | | | demand. |
| avoid altogether. Penny stocks can be | | | | 3. Personal Interest |
| dangerous for investors of all | | | | Theres a saying that you do well at |
| experience levels but especially for | | | | things you enjoy to do. This makes |
| amateurs just getting their feet wet. | | | | logical sense and it works with stocks |
| Here are five tips to help find the best | | | | as well. If you invest in something that |
| penny stock picks. | | | | actually interests you then you will |
| 1. Profit | | | | naturally be more studious and make more |
| First off is the company you are | | | | of an effort to choose the best stocks. |
| interested in investing in experiencing | | | | It can be very boring researching stocks |
| any sizeable profits. Better yet is | | | | that dont interest you and you are |
| their profit to debt ration favorable. | | | | likely not to be as thorough as you |
| Youd be hard pressed to find one of | | | | should be. |
| these little companies without debt but | | | | 4. Tenure |
| that doesnt mean you cant be picky. In | | | | How long has the company been in |
| this case the least amount of debt with | | | | business? This is not to say that |
| the most profit will be a better | | | | investing in newer companies is a bad |
| investment. Another thing to watch is | | | | idea but its more likely to be safer |
| how progressive the debt payoffs have | | | | investing in a more established company |
| been. This would be a sign of good or | | | | with some kind of track record. |
| bad financial management. | | | | 5. Bad Behavior |
| 2. Industry Trends | | | | Last tip is an obvious one. Stay away |
| This is one of those methods that almost | | | | from companies whose operations or |
| all people use anyway. If there is a | | | | transactions have been questionable. |
| high demand for oil then people | | | | Even if the bad press is not completely |
| instinctively want to go buy oil stocks. | | | | true it will be difficult for a company |
| The only problem with this kind of trend | | | | to recover in the short and maybe even |
| analysis is it really isnt forward | | | | long term. |