Sometimes called micro-cap stocks, penny stocks is the term investors and analysts use to describe stocks traded ‘Over the Counter” and for less than $5.00 a share. Companies selling these stocks are either new, emerging companies, looking to make their way onto one of the major stock exchanges or companies that have run into financial problems and have been “de listed” from a major exchange. Investors looking for stock picks usually begin their search online.
Aggregate sites like Yahoo Finance and Google finance offer invests a number of links and resources to more detailed information. Other financial sites are spending more time analyzing and recommending these stocks. Analysts making penny stock picks online are taking information about larger economic trends and trading data and re-interpreting and applying it to the penny stock market. You will see that stock tips found online from a site or an analyst not dedicated to micro-cap stock will favor new growth companies, or de-listed companies that have made major changes to management, introduced new products, or gotten their arms around their debt, liquidity, and profitability issues.
Since these stocks are not traded via major exchanges, there are a number of websites devoted to identifying stock picks online. These sites offer investors an opportunity to browse the analyst’s research, identify Matka market trends, and explore some of the “hot stocks” and picks. Many of these sites use real world investors and their experiences.
In addition to penny stock picks online, many of these sites provide subscribers with access to member’s only chat rooms and discussion forums. These threads allow investors to chat with each other, exchanging online stock picks, sharing experiences and expertise and building a community of likeminded investors. Many of these sites encourage members to post their portfolios, so other investors can see, in real time, how they are doing.
When looking for stock picks online, it is important that a potential investor understands that there are some issues with fraud and price manipulation on the penny stock exchange. Some sites pay investors and writers to market a certain stock, artificially inflating the company- and the stock’s value. It is important for stock investors and traders to conduct some due diligence and independent research to decide, independently, that the company is viable and the stock is valuable.
Penny stock investors should familiarize themselves with stop orders and commit to using them religiously. These instructions can help you safeguard some of your initial investment if your stock bottoms out. Additionally, creating email, text or other electronic alerts can help you stay on top of your stock and its movement in this highly volatile environment.
The penny stock market is a high risk/high rewards investment gamble. Some analysts argue hat, due to limited regulatory oversight, an investor is better off playing the lottery than investing in micro-cap stocks. Successful stock investors, however, believe that the return on their sometime limited investment can be huge. When an investor starts searching for penny stock picks online, he or she should be prepared to do some additional research on the company and stock.