Hot Penny Stock Identification

When financial news networks cover the stock market, they tend to focus on stocks traded on major stock exchanges, such as the New York Stock Exchange, the NASDQ, the London Stock Exchange, and the Japanese Nikkei. For many investors, these traditional stocks, the high brokerage fees and the long wait time to see a profit are not attractive. These investors, those seeking higher risks with the possibility of greater immediate rewards, are trading penny stocks. Since the mainstream financial media does not generally cover the penny stock market, investors often decide which stocks to pick on their own.

One way to identify which hot penny stocks to choose is to follow national stock trends. Instead of investing in traditional blue-chip companies, look for second- or third-tier companies, startups, and companies that have some liquidity, equity, or debt challenges. These companies should feel the trickle down effect of a bull market in their particular industry. So instead of investing in Starbucks, you can find a regional coffee shop that offers hot stock and a chance to get in on the ground floor.

There are a number of websites dedicated to identifying hot pennies. These sites offer their best daily, weekly, and monthly picks. These sites may also offer you the opportunity to speak with successful stock investors via instant chat, email, or discussion forum. Instead of turning to a traditional broker for tips and advice, you can chat, in real time, with other investors about which popular stocks to pick. You can record their successes and progress to see if they are as successful as they claim to be.

These stocks are not subject to the same rigorous reporting, listing, and regulatory standards as traditional stocks, so finding unbiased research on a company’s assets, liabilities, earnings, and debts can be challenging. Most analysts recommend that you do some of your own research on your penny stock options. At a minimum, you’ll want to look at a company’s business models and recent profit and loss statements to get a picture of the company’s overall financial health. Sites like Google Finance and Yahoo Finance are great places to start your search for unbiased research on your popular stock picks.

Deciding which popular penny stocks to pick is all part of research, intuition, and networking. By joining the conversation with other penny stock investors, you have developed a significant network of advisors and can see how successful your penny stock picks are. These chat rooms, message boards, and discussion forums illustrate whether these investors are putting their money where their mouth is. As with any stock portfolio, timing is key, so keep an eye on the movement of your stocks. Since penny stock investors tend to trade in higher volumes than traditional investors, even moderate gains and losses can add up quickly. Choosing hot penny stocks is an option for a non-traditional investor looking for a fast-paced, high-risk, high-reward scenario.