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Good Penny Stocks – Tips on Finding and Investing in Top Penny Stocks
By Penny Stock Investor | November 10, 2009
What are good penny stocks? How can one determine the top penny stocks? When can one say that certain penny shares are good penny stocks to buy?
I will tell you all about good penny stocks, how to find them, which ones are undervalued penny stocks and how you can earn returns from them.
First, let’s look at good penny stocks to buy. Such stocks are those that might not give you a lot of returns immediately, but they are good bets in the long run.
For me, the top penny stocks right now include those that are related to the telecommunications industry and mobile services. Following the change in presidency, the United States is bouncing back and telecommunications will likely be one major market that will benefit from potential government upgrade projects.
Top penny stocks related to this market include Sirius, Composite Technology and Zoom Technologies. With the expected additional investments on telecom, these names are the ones I consider as good penny stocks to buy.
Another source of potential gains in penny stock trading are undervalued penny stocks. Most of the time, such stocks are valued at quite a low price. You will not get rich overnight investing in these shares, but they are steady and you will get your worth in the long run.
It’s one of the areas of penny stock investing that I always focus on – finding undervalued penny stocks. These stocks are usually valued at low prices but have the potential to increase in price as time goes on.
When evaluating whether a low-priced penny stock has the potential to provide a solid rate of return, I always look at their price to earnings ratio. The higher investors are willing to pay for a penny stock’s earnings, the more justified its potential.
Finding penny shares with low debt to equity ratio has also proven beneficial to my personal investments. Stocks with low debt-to-equity ratio are most likely undervalued and can provide a long-term return.
When trying to find these undervalued penny stocks, I never forget to dig deeper into the companies’ history. Have they been rising slowly but steadily? Always look at the yearly growth of a company to see if it has a tendency to fluctuate during market troubles or if it rides the storm well, albeit slowly.
In finding good penny stocks, a combination of thorough research, patience and avoiding penny stocks promising overnight success will help. Remember that good penny stocks to buy are those that might start slow but have the potential to build up in the long run.
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