How You Can Easily Identify The Top Penny Stocks Today, Tomorrow, And In The Future!

| January 2, 2015

Top Penny Stocks Or Scam?

Identifying top penny stocks means doing research, understanding markets, and finding investments at just the right time.

One way to fat profits from penny stock trading is to scoop up shares of penny stocks as money begins to flow into the company stock. It takes good timing… and unfortunately, you’ll see penny stock scams everywhere.

Be careful and do your research to protect yourself.

Some of the best top penny stocks allow for big gains on minimal investment… that’s why they’re penny stocks right! All you need to do is buy stock at the right time and you’ll transform your portfolio overnight. Like I said, sometimes it’s simply about being in the right place at the right time.

Let’s start with finding top penny stocks…

Look At Major Markets FIRST To Find Top Penny Stocks

Many investors focus on the major indexes when finding penny stocks to invest in. Major indexes, like NASDAQ and NYSE, have minimum financial requirements.

That means companies on these exchanges need to meet certain minimum levels of finance (like assets and equity valuations) and disclose more financial information to shareholders. Penny stocks trading on the Over-the-Counter (OTC) markets don’t have any requirements like this…

Focusing your research on a major market will go a long way to helping you side step the scams and pump & dump schemes out there.

But you’ll miss out on a lot of other opportunities.

By far, the OTC and Pink Sheets have hundreds, if not thousands, more penny stocks to choose from.

If you do buy stocks on the OTC markets, you might consider focusing on those in the upper tiers of the OTC markets.

What do I mean by that?

OTC Markets – one of the largest exchanges for penny stocks – classifies stocks by a number of different metrics – including what information they release for shareholders. Here are those levels:

OTCQX – From their website: “To qualify for the OTCQX marketplace, companies must meet high financial standards, demonstrate compliance with U.S. securities laws, be current in their disclosure, and be sponsored by a professional third-party advisor.”

OTCQB – The venture marketplace… again from the site: “To be eligible, companies must be current in their reporting and undergo an annual verification and management certification process…. However, since there are no minimum financial standards other than a $0.01 bid test, companies will vary in their financial strength.”

OTC Pink – The open marketplace… again from the site: “The OTC Pink marketplace offers trading in a wide spectrum of equity securities through any broker. This marketplace is for all types of companies that are there by reasons of default, distress or design…”

So you have a world of options open to you but to truly protect yourself from the scams out there, you’ve got to do your research…

How To Research Top Penny Stocks

Research is key when looking for top penny stocks.

That’s why stocks sold on major markets can be safer. Simply being able to access information about a company can dramatically improve your investment decisions and help grow your portfolio.

Here are a few tips to finding top penny stocks and side stepping scams:

  • First, do your research and don’t skimp. Visit company websites, read their public filings, study press releases. Read everything you can and take notes… it will ensure you’re not blindsided by some random information.
  • Don’t listen to hype. It may be tempting to go after the company that appears cutting-edge, but sometimes hype can cover up a bad business deal. Avoid basing your investment decision simply on hype or an email from some stranger. Thorough research is much more likely to pay off in the long run compared to an “of the moment” impulse buy.
  • Find reliable stock information. Rumors and misinformation abound when dealing with top penny stocks. Just because you read something in an email doesn’t make it true. Learn to know which sources you can trust and which ones are just baiting buyers for a failing company or scam. Never trust recommendations on the internet; they are almost always scams looking for easy investors to rip off.
  • Look at the Company History. Look at hard data like quarterly reports and other company history information to get a sense of how a company has progressed. Look for growing earnings, growing revenue, and cash! If it is a new company, look at the CEO and other management. If a CEO has bankrupted his last three companies, you may want to steer clear.

Research is critical when finding top penny stocks, and when you do your research, it gives you a solid foundation for making critical decisions about your investments. Remember, anyone can find a top penny stock, but you must be able to tell the difference between a scam and the real thing.

Profitably Yours,

Brian Kent
Penny Stock Research

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Brian Kent has been trading the markets for more than 2 decades and now writes and edits for PennyStockResearch.com. You can sign up for the newsletter and get a free research report – http://www.pennystockresearch.com/free-reports/ We are a trusted source for the truth about penny stocks!

 

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Category: Penny Stocks

About the Author ()

The Dynamic Wealth Report works with a number of staff writers and guest experts who specialize in everything from penny stocks to ETFs to options trading. These guest analysts post under the 'staff writer' moniker for ease of use.

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