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Last Post: 1/19/2017 5:36:51 AM - Followers: 238 - Board type: Free - Posts Today: 1
















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Penny Stock Investing
The Nature of Penny Stocks

For anyone new to investing in penny stocks, you should first be made aware of the differences between these micro-cap stocks and the more conventional blue-chip and mid-cap investments. Unlike buying shares in a large, stable company like Ford or IBM, you are dealing with speculative investments.

Penny stocks literally trade for pennies per share, or for as much as a couple of dollars. The beauty of penny stocks, of course, is that sometimes they 'grow up' and become mid-cap stocks, multiplying in value hundreds of times over and making many people very wealthy.

With penny stocks, also called micro-caps or juniors, you will see much greater price volatility, and thus greater and quicker gains and losses in asset values. It is precisely this volatility which draws investors to the junior markets, as one good pick could make you hundreds of times what you could ever make on the larger markets.

Of course, there is more risk than buying bonds, blue chips or defensive stocks - but this added risk is tempered with the possibility of making the big gains.

Most penny stocks, but not all, are resource or technology companies who initially sold shares in an effort to raise money for exploration or product development programs. Many of the companies have large debt loads and are not necessarily making more money than they are losing.

However, it is the potential of a major, or even minor success in their quest that often incites dramatic price climbs, and this is where their value lies.

Profit Potential

Modern Strategies Inc. has been in the business of researching penny stocks for many years, and has become effective at uncovering the best small cap investment opportunities and the most rewarding profit situations in the penny stock markets.

There are several ways to profit from penny stock investments. Modern Strategies Inc. has uncovered the most highly rewarding investment situations.

Promotional Stocks - These issues may or may not have much actual value. Promoters generate interest in these type of stocks in an attempt to drive share prices higher. The promoters own great amounts of shares and so they make more money the higher the share price travels. Eventually, they sell their holdings into the promotion and generate great personal profit. Then they move on to the next project, leaving the original stock and all its investors behind. Without the work of the promoter, the promotional issue soon comes crashing down.

These are the type of stock investor hear horror stories about, because many people often lose a good deal of money when they are naive about promotional ploys. However, getting in on a promotional stock early in its life cycle, and keeping an eye on the actions of the promoter can be very, very rewarding. It's like having a full time stock promoter doing everything in his power to get the share prices of the stocks you own to go through the roof, and investors who get in early can go along for the ride!

Technical Precursors - Often technical analysis can reveal patterns in the trading cycles of penny stocks. Sometimes these patterns illustrate excellent buying opportunities, where the underlying stock has a high probability of moving up strongly, and only a low probability of declining in value.

In addition, there are sometimes situations where several positive technical indicators combine at once to reveal that an issue is very likely to increase strongly in price over a short time frame, indicating that the particular issue is has excellent investment potential.

Fundamental Strength - Fundamentals involve such criteria as earnings, debt load, assets, and many others. It was long thought that earnings were the major driving force behind share prices, but Modern Strategies Inc. has since disproved this theory as it applies to penny stock companies. Instead, uncovering the best medium to long term investment opportunities must be done through exhaustive analysis of company financial statements. Investors should get involved with the companies that are making the most money, have the most effective management, and have improving trends in all factors of their operations. As well, industry comparisons and the examination of key financial ratios present clues as to which companies are destined for higher share prices.

Proper fundamental analysis of penny stock companies will generally reveal that there are about 2 or 3 superior investment opportunities out of every 100 companies examined. These 2 or 3 excellent corporations often represent better investments than 90% of stocks on the large-cap markets like the NYSE.


Undervalued Situations - Sometimes companies see their share price slide dramatically. There are occasions where this decrease in price has very little to do with the underlying fundamentals, and more to do with factors such as overall market weakness, interest rate increases, or others.

Opportunity exists in such situations because the shares are often 'unfairly valued' and a return to more realistic prices is inevitable. There are often cases where companies have more cash on hand per share than their share price, or have price to earnings ratios as low as 5.0. Although there is much more to uncovering the best undervalued situations, this is the basis behind the concept.

Minimized Downside - Often the combination of technical analysis and undervalued situations can reveal penny stock companies that have tremendous upside potential, and have a very low probability of declining in value to any significant degree.

These type of investments are excellent choices for penny stock investors that are less risk adverse.

Special Notes About Penny Stock Companies

Penny stock companies change their names more commonly than other publicly traded companies, and are also subject to more stock-swaps and consolidations. In any of these events, your shares in your account will be automatically replaced with the appropriate stock by your broker and notice will be delivered to you.

For example, if you owned 5000 shares of EXO and for every 5 shares you were to receive 2 shares of LOR, you would find your account holdings re-adjusted to reflect 2000 LOR which can be traded as normal. You will no longer have the 5000 EXO.

On rare occasions, a penny stock company can become delisted. This means that the shares will no longer trade on the exchange, and if the company does not get listed on another exchange or re-instated at a future date, you may be subject to a loss of capital equal to 100% of the total investment. However, this is a very rare occurrence, and there are simple ways to protect yourself against it which are periodically discussed in Modern Strategies Inc. publications. Delisting generally becomes a greater concern for investors who intend to use a long-term (several years) buy and hold strategy with penny stocks.






 

PostSubject
#14722  Sticky Note $BDCI Check Out DD At http://pennybuster.com/ PENNYBUSTER 12/28/16 05:15:26 PM
#14670  Sticky Note $BDCI Great Article Here http://mystock.pics/BDCI/ PENNYBUSTER 12/02/16 11:11:26 AM
#14620  Sticky Note $MJNA http://pennybuster.com/mjna.html PENNYBUSTER 10/31/16 02:08:24 PM
#14458  Sticky Note $APHD Board Mail Alert .009 To .465 Today!! PENNYBUSTER 05/16/16 03:18:58 PM
#13457  Sticky Note Our Board Email Members Reaped The Rewards Of PENNYBUSTER 06/21/15 03:01:35 PM
#12372  Sticky Note I would like to invite you to our PENNYBUSTER 11/26/14 08:52:44 AM
#14768   $IMLFF resides on OTCQB Tier! The Company is Robertscott 01/19/17 05:36:51 AM
#14767   $ICLD ~ InterCloud Systems Begins New Year with Robertscott 01/18/17 02:14:03 PM
#14766   $ICLD https://www.barchart.com/stocks/quotes/ICLD/overview Robertscott 01/18/17 11:16:07 AM
#14765   $IMLFF Check out the Corporate Presentation https://www.inmedpharma.com/s Cabroncita 01/18/17 11:15:00 AM
#14764   $ICLD About InterCloud Systems, Inc. Robertscott 01/18/17 09:28:08 AM
#14763   $NEWG 1.20 New Pick Here. PENNYBUSTER 01/17/17 08:19:50 PM
#14762   $ICLD Press Release! https://finance.yahoo.com/news/intercloud-systems-begins-ov Robertscott 01/17/17 12:52:23 PM
#14761   $SHOM news: https://finance.yahoo.com/news/dr-liu-zhongzheng-chief-scientist-11 Robertscott 01/17/17 09:04:17 AM
#14760   $IMLFF InMed is utilizing its proprietary bioinformatics assessment Robertscott 01/17/17 08:02:45 AM
#14759   $ICLD Green entering power hour...looking for a strong close! Robertscott 01/13/17 03:06:54 PM
#14758   $SHOM nice action here, green on the day! budfoxhub 01/13/17 01:21:27 PM
#14757   $ICLD https://www.barchart.com/stocks/quotes/ICLD/overview Robertscott 01/13/17 10:27:48 AM
#14756   $ICLD Check out some of their services that Robertscott 01/13/17 09:14:24 AM
#14755   $GGSM .0001 x .0002 Heavy Volume Today! PENNYBUSTER 01/12/17 09:28:01 PM
#14754   $TWOH .49 going, green close coming! budfoxhub 01/12/17 03:20:12 PM
#14753   $BRAV .0003 x .0004 On Bottom Watch. PENNYBUSTER 01/12/17 03:18:45 PM
#14752   $SHOM George Chang, Chief Executive Officer of SHOM, Robertscott 01/12/17 02:46:13 PM
#14751   $ICLD ~ Investor Fact Sheet ~ InterCloud Systems, Robertscott 01/12/17 12:36:14 PM
#14750   $TWOH “Two Hands” is the product of years Robertscott 01/12/17 10:19:11 AM
#14749   $UPIN on high alert! http://www.universalpowerindustry.com/ DD: budfoxhub 01/12/17 10:05:50 AM
#14748   FHBC Fernhill's initial product offering Roadkill, is Cabroncita 01/12/17 09:10:53 AM
#14747   $TWOH Vision & Mission Robertscott 01/12/17 08:38:40 AM
#14746   GMNI $ Low Float on watch! Wild Wild West 01/12/17 07:27:24 AM
#14745   $ICLD Security Details Other Company Securities Cabroncita 01/11/17 05:20:25 PM
#14744   $SHOM put it on your radar, big news budfoxhub 01/11/17 02:23:38 PM
#14743   $TWOH Two Hands Corporation is a custom application Robertscott 01/11/17 08:54:34 AM
#14742   $SIPC Sipp Industries Retires 395 Million Shares of $Pistol Pete$ 01/11/17 12:52:46 AM
#14741   $SHOM's Facebook page Robertscott 01/10/17 11:15:36 AM
#14740   $PMCB Enjoy Corporate Video PMCB $Pistol Pete$ 01/10/17 01:16:15 AM
#14739   ~~~~ $QTMM ~~~~ After 8yrs it's ready to run. ih8aloss 01/09/17 05:14:50 AM
#14738   LOVE IT GIGL HOT TICKET $$CHIHUAHUA$$ 01/08/17 05:40:27 PM
#14737   YW PennyB.......lots more where that came from ........et z Zardiw 01/08/17 02:35:57 PM
#14736   Thanks Zardiw! PENNYBUSTER 01/08/17 02:34:17 PM
#14735   DDAmanda® Chart on: $GIGL: Zardiw 01/08/17 02:32:44 PM
#14734   Giggles N' Hugs $GIGL, a multiple award winning PENNYBUSTER 01/07/17 10:29:08 PM
#14733   $SHOM ~Twitter ~ https://twitter.com/southernhomemed Robertscott 01/06/17 09:07:12 AM
#14732   BAYP ConstructionKing 01/05/17 10:56:27 AM
#14731   $SHOM SouthernHomeMedical.com will produce vital monitoring wearable systems Robertscott 01/05/17 09:29:13 AM
#14730   $APHB .4851 Conference Call and Webcast PENNYBUSTER 01/03/17 05:41:12 PM
#14729   $BDCI The Grand Bahama Port Authority (GBPA) owns PENNYBUSTER 01/01/17 04:40:35 PM
#14728   $BDCI Being that Bahamas Development Corporation (OTC Pink: PENNYBUSTER 01/01/17 04:26:15 PM
#14727   RGNP put it on your radar, have a budfoxhub 12/30/16 01:43:20 PM
#14726   Have a Happy New Year! PENNYBUSTER 12/30/16 01:05:40 PM
#14725   $RGNP Corporate Presentation http://client.irwebkit.com/assets/uploads/presentat Cabroncita 12/30/16 10:56:53 AM
#14724   OCLG the next big boy boomer Juiceisloose 12/29/16 02:45:17 PM
#14723   Check out OCLG ConstructionKing 12/29/16 09:54:22 AM
#14722   $BDCI Check Out DD At http://pennybuster.com/ PENNYBUSTER 12/28/16 05:15:26 PM
#14721   $IEVM and $GIGL 4 Next Week. Have a PENNYBUSTER 12/23/16 03:43:42 PM
#14720   $ICLD on news watch otcmarkets.com/stock/ICLD/news Robertscott 12/23/16 01:36:16 PM
#14719   $AEXE Aim Exploration Inc. (AEXE) is a Henderson, Cabroncita 12/23/16 11:22:44 AM
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