Do You Know The Three Easy Ways To Find Awesome Penny Stocks?
The Three Tricks To Finding Awesome Penny Stocks
Let’s get down and dirty. Today I’m going to show you three easy ways, tricks if you will, to finding great penny stocks to buy and trade.
Remember, hunting for penny stocks is a full time job.
Anyone serious about trading penny stocks will tell you their to-do list never ends.
First, you’ve got to find great stock ideas. Then you’ve got to do the research and due diligence. Then you place the trade. Then you monitor the stock… and that can go on for years. Finally, you exit with a fat payout and pocket the profits.
Then you do it all over again!
If you’ve been following the blog for some time, you know I talk about research, due diligence, and trading all the time.
So today, I want to mix it up and talk about finding great stock ideas.
How To Find Awesome Penny Stock Trade Ideas
Finding awesome penny stock trade ideas isn’t difficult… if you know where to look. I’m going to share my secrets with you.
But first… a reminder.
Once you find a great idea, you don’t want it to get lost.
That’s why I recommend starting a penny stock list.
I talked about how to start and manage your own list of great penny stock ideas in an article a few months back. You can go to the site and search for the article titled “A Critical Trading Tool, Your Penny Stock List!”
There you’ll see how to start and build out your list and what to include.
Now let’s dig a bit with three tips, secrets if you will, on finding awesome penny stocks.
Three Tips To Finding Awesome Penny Stocks
You can find great penny stocks anywhere. You can get tips from your golf buddies. You can get tips from a stock scammer or a promoter. You can get tips off the bathroom wall at a seedy dive bar.
The sources for Penny Stock Tips are endless, but there are three that I swear by.
Penny Stock Trick #1 – Find Awesome Penny Stocks From Other Hot Stocks
Ok, this trick is based on the latest hot stocks in the market. The process is simple.
As you’re reading your newspapers, magazines, and online blogs, you’ll no doubt uncover a stock or two that’s growing like a weed. High growth attracts a ton of investor interest… and a lot of press coverage.
So these companies aren’t hard to find.
These are stocks who are seeing their stock rocket higher and everyone is talking about them.
You’ll come across news article after news article.
When you see that trend, you know you’re onto something exciting. Normally it’s an industry that’s taking off.
For example, today I’m looking at the Investor’s Business Daily site and they list their top rated companies in the news section. Celgene $CELG, Amgen $AMGN, BioSpecifics $BSTC, Johnson & Johnson $JNJ, and Medidata $MDSO were all mentioned.
Now you don’t need a PhD to realize these are all companies in the healthcare industry, and many operate or touch in the biotech industry.
So now you know the biotech industry is hot… so do a bit of digging for penny stocks in the biotech space… and specifically, penny stocks that compete with these bigger players.
The news is always a great source of new ideas… but sometimes there’s no clear trend. That’s when you use my trick number 2…
Penny Stock Trick #2 – How To Find Awesome Penny Stocks Using A Screener
Sometimes you need to come up with a bunch of new penny stock ideas QUICK! That’s when I focus on my favorite stock screener.
I’ve mentioned finviz.com before, and they’re one of the screeners I use all the time.
With their free tool, you can search based on performance. I love to look at penny stocks near, or above, their 52- week high.
What I do is simply screen for penny stocks (those under $5) and see which ones are popping higher.
Why is this list great?
Because you’re uncovering penny stock with momentum. You’re going to find penny stocks you’ve never heard of. You’re going to find industries you hadn’t considered.
For example, I just did the screen and found 10 penny stocks trading for under $5 who were trading for 300% above their 52-week low. That means these 10 companies have all tripled in value.
Four of these companies, Aoxing Pharmaceutical $AXN, Pershing Gold $PGLC, DS Healthcare $DSKX, and Nymox Pharmaceutical $NYMX all had market caps over $50 million and stock prices under $5.
Should you rush out and buy them… not on your life.
Like always, do your diligence first and follow the company before making your buy decision.
But that’s not the only way to find amazing penny stocks. You still have tip number three…
Penny Stock Trick #3 – Awesome Penny Stocks From Money Managers!
You all know I hate mutual funds.
In my opinion, the fees and expenses are far too great when compared to the management performance.
That said, these funds sometimes do decent research and uncover some hidden gems… remember, I said “sometimes”.
One of my favorite ways to “steal” ideas is to find a hot fund manager and look at what he’s buying and selling.
You can do this simply and legally.
For example, I like to follow Perritt funds. They have a number of funds focusing on low priced stocks. They haven’t been the best performing funds, just look at this chart:
As you can see, in 2014 they did well. But the last 18 months have been virtually flat.
Anyway, I’m looking for good ideas, and you never know where they’ll come from. So I wanted to see what they’re invested in. I went to the SEC.gov site and searched for company filings based on the ticker symbol $PREOX.
There you’ll find the N-CSRS and N-Q filings. As you review these filings, you’ll see a ton of stocks listed… all the ones the fund holds. It’s a great place to find even more awesome penny stock ideas!
So, there you have it, three great ways to find great penny stocks. Put them to use and I’m sure you’ll be adding a big number of new penny stock ideas to your penny stock list!
If you find an interesting company, let me know how you found it. Shoot me an email, comment on the blog, or give me your opinion on Facebook or Twitter!
Good investing…
Brian Kent
Note: If you’re interested in learning more about Brian Kent’s Penny Stock All-Stars premium service… and learning about the stocks we’re trading for profit… you can get the inside scoop on penny stocks here.
Category: Penny Stocks to Buy
