Wondering how to get started with penny stocks?
If so, you will be spoiled. Today I am sharing with you some more information about penny stocks and how to get started.
If you turn to an investment news channel, you will often see journalists talking about some public companies. There are the Apples, the Googles and, more recently, the Teslas of the trading and investment world.
You hardly hear them from penny stocks. Penny stocks, it seems, are the black sheep of the trading and investing community; they are the stray uncle whom you dare not invite to Thanksgiving dinner; the son who drops out of medical school to go on a mystical adventure in the Himalayas.
This leads to the obvious question: what are pennystocks? And why aren’t they discussed so much in the mainstream? The short answer is the subject of this article. Stick with it and you’ll see why penny stocks are the ultimate balance between investors and traders, and why it’s not only solid but also potentially lucrative to put them at the center of any trading or investment strategy.
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What are penny stocks?
To discuss anything, you need a vocabulary; a way to define and set the boundaries of the discussion. In this regard, we can use the mainstream definition of penny stocks This is any security that is traded on the exchange with a valuation of up to $ 5.
So, $ 5 sets the limit, and it’s important too, as you can see. This threshold is the only one that creates the definition standard for classification. This of course means that penny stocks of all shapes and sizes are subject to this rule. You can buy penny stocks through investment apps or through brokers. Penny stocks can be found in pharmaceuticals, finance, healthcare, education, technology, oil and gas; Even space exploration has a fair share of companies trading under $ 5.
Penny stocks provide access
This $ 5 threshold is beneficial to the novice day trader for one important reason: access. Let’s face it, many beginners don’t start out with windfall capital – few have more than $ 10,000 in the bank to get into the markets. And even if the average day trader with $ 15,000 in cash tried to play the stock market at the higher, more mainstream levels, they probably wouldn’t get very far.
If a trader got ambitious and wanted to buy shares in Warren Buffett’s company, for example, they would have to spend around $ 290,500 on a single share. Two stocks are essentially half a million dollars.
It doesn’t take much to find out that non-penny stocks mainstream companies are out of the reach of ordinary investors – they certainly are so to the vast majority of day traders, and that’s why penny stocks are so important.
Why do people like to trade penny stocks? The inherent pricing structure for penny stocks means day traders can continue to expand their capital. If a share is $ 5, then 100 shares are made available to a $ 500 trader; if the same stock trades for $ 0.50, then the same $ 500 will make 1000 shares available to a trader; and if a stock trades for $ 0.05, then that $ 500 will make 10,000 shares available to a trader. Penny stocks have a regressive beauty that mainstream people don’t like to talk about – it’s pretty obvious when you look at the numbers just presented.
Of course, day trading penny stocks is all about profit, and the general argument against penny stocks is that they are risky. Which trading or investment vehicle is it not? Right now, as this piece is being written, some investor who has a blue chip stock somewhere is picking up the pieces because the stock they promised would be timeless has gone down. Kodak investors understand this painful truth: All stocks are risky. Penny stocks are no different from most investments; the money you put in can multiply in value or it may decrease in value due to the movement of the penny stick.
According to objective standards, the question “What are penny stocks?” can best be answered by stating that they are no better tools for day traders to access the profitable world of day trading or even investing.
A great source of information about buying penny stocks are the various penny stock newsletter services that provide important updates and trade alerts about these small businesses. Investment newsletter services can provide penny stock alerts to traders and provide market news through blog posts reporting OTC stock news, SMS texts and newsletter emails.
The Best Penny Stocks You Can Buy Right Now
Everyday people, from average Joe’s to professional traders and hedge funds, are looking for the next great investment in penny stocks.
It could be one you’ve heard of or a company that trades on the pink leaves with no volume. There are an unlimited number of options in the “market”.
However, not all options are created equal. Some penny stocks are better than others for several reasons.
There are thousands and thousands of companies in the markets right now, many with stock prices below $ 2.00 per share, that have tremendous potential to skyrocket like crazy overnight.
However, it is important to remember what you are investing in and to think long-term and short-term.
ContextLogic Inc. (NASDAQ: WISH)
You may have heard of Wish, an e-commerce company that has become a major player in the online shopping world. The website is known for its low prices and long delivery times with the occasional customer service issue.
The stock was beaten for the past few months after its IPO price of $ 24 per share.
Wish drops to record lows as analysts downgrade after disappointing earnings reports.
ContextLogic has a newly created support level of $ 6.71. The stock tested that level on Monday and held out, which was confirmed again on Tuesday when the stock bounced back from that test as well.
I expect them to introduce new features and once they fix some internal developments the stock should long-term head back to the 20s. If you have $ 500 lying around I would say Wish is a safe bet under $ 10.
Alexco Resource Corp. (NYSE: AXU)
A publication called “The Silver Institute,” according to Reuters, predicts the price of silver will rise from about $ 27 to $ 32 by the end of this year.
Since the organization in question is a different silver company, I must use this estimate with caution.
Should the economy reopen and industry demand increases, Alexco Resource’s shares could rise 70%.
A forward P / E of 6.90 seems to confirm my bullish expectations.
Inpixon (NASDAQ: INPX)
Inpixon (INPX) is a penny stock desperately trying to change its fortunes. This company has generated some capital and should be successful if it continues down this path.
Basically, Inpixon develops software to make public spaces and facilities more efficient, from making schools safer for children to making wireless Internet access easier in shopping malls to curb crime.
But Inpixon has seen much better days. The company’s annual sales have increased 68% and 48% respectively over the past two years. And sales have increased 137% and 51%, respectively, over the past few quarters. It was down 23% in the previous quarter – not too bad considering the COVID issues.
The excellent P / E ratio is 0.70 and the P / E ratio is 1.21, while the surprisingly strong balance sheet is achieved with a fast ratio of 8.60 and a low debt / equity ratio of 0.04, while this year’s EPS is 97.9 %, with gross margin at 71%.
In the past two months, Inpixon announced three major deals with a “global social media company”, a “multinational mass media and entertainment conglomerate” and an “international banking organization”.
This trend implies that Inpixon is gaining momentum and the company may now be worth the investment before more deals are announced.
Gold Resource (AMEX: GORO)
Gold Resource Corp is a mining company with mining operations in Oaxaca, Mexico and North Carolina, USA.
The project aims at low cost projects with a high return on investment.
The company offers its shareholders the option of converting their cash or paper dividends into physical gold and silver and receiving delivery.
Greenpro Capital (NASDAQ: GRNQ)
Greenpro Capital Corp operates and provides business solution services for small and medium-sized businesses in various locations in Southeast, East Asia, Thailand and Taiwan.
It offers cross-border business solutions, record management services and accounting outsourcing services.
The cross-border business includes tax planning, fiduciary and asset management, cross-border listing advice and transaction services. Along with these services is the venture capital business.
Its segments include the service business, which deals with the provision of business advisory and business solution services; and real estate business that deals with trading or renting commercial real estate in Hong Kong and Malaysia.
I’ll keep this list up to date so be sure to mark this post as a favorite to see my favorite penny stick picks.
Get a free penny stick with Robinhood
If you’re looking to buy any of the above penny stocks or do your own research, Robinhood is a place to start. You can read my experiences with day trading in the free trading app here.
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