What Are Penny Stocks?

Any shares trading at $5 or less are considered to be penny stocks, but some trade as low as a fraction of a penny.

What are Penny Stocks

When most people think of small, thinly traded companies whose shares are trading for a few cents each. Well, sometimes they have it right, but penny stocks are actually any shares trading for $5 each or less.

In general, you'll see some penny stocks trading for 3 or 4 dollars, while others trade for only fractions of a share each. I imagine that you understand a company trading at $4.75 per share is generally higher quality than those penny stocks changing hands for one tenth of a cent.

At the same time, you know that you stand to make the greatest return on your investment the smaller (and possibly the more volatile) the penny stocks are. In other words, you've got to gauge your risk/reward tolerance as you scoop up shares in the absolute best penny stocks.

In penny stocks, you'll find all sorts of great investments that can make you plenty of money, while other penny stocks are companies in a sorry state.

If you get involved in those penny stocks that are fundamentally solid, have great financial strength, leaping revenues, and growing market share, you stand to have your small investment multiple several times over, and probably pretty quickly too.

On the other hand, if you get involved with the duds and brutal penny stocks, you will get what you deserve.

So, how do you avoid what are the dangerous or lack luster penny stocks, and get a piece of what are the highest quality penny stocks?

For starters, you pay attention to the 3 don'ts of penny stocks:

Now, if you abide by the three don'ts of penny stocks, you're ready for the next step: How to find the best penny stocks.

Did you know that what many penny stocks represent America's best undiscovered, up-and-coming companies? Many penny stocks are trading for pennies a share simply because they are undiscovered or just getting started.

Many of these penny stocks go from obscurity to world renowned companies in a matter of years, or months! And guess what? They take their investors along for the ride.

Many penny stocks have gone from $1/share to $40, turning a small investment of $500 into $20,000. Investing in penny stocks is a great way for investors with limited funds to increase their wealth, without any major outlays of cash.

It all comes down to knowing which of the several thousand penny stocks out there are going to go up in price. This is where Peter Leeds comes in. He applies his demanding Leeds Analysis criteria to thousands of penny stocks, which reveals those penny stocks that are slated for a near term upward move in price.

Of all the penny stocks that Peter Leeds puts through Leeds Analysis, less than 5% pass. Of those penny stocks that pass, Peter and his team go into serious analysis mode, picking the companies apart, and revealing the absolute best opportunities in penny stocks to you each week.

Now you can be a part of this exciting way to build wealth. Just take a free trial to the Peter Leeds newsletter, and learn for yourself exactly what penny stocks are!

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