The Best Penny Stocks To Buy How We Find Them
Finding the best penny stocks to buy
Every morning I roll out of bed and get myself to the office.
Ive got one goal.
Find the best penny stocks to buy today.
Its a simple task, but its not easy to do. I spend hours and hours reading, writing, taking notes, and doing research.
Its a boil the ocean type of job.
Whats that mean?
When I was on Wall Street, every new analyst would get a boil the ocean project. It was a project that had no possible end you just spent time on it every day updating databases, identifying industry trends, finding new companies, finding new technologies, finding new entrepreneurs.
The project never ended like boiling the ocean!
Anyway, every day my job is to find the next great penny stock and it never ends!
But Im not complaining
Today Im going to share with you some secrets on how I work
How I Find The Best Penny Stocks To Buy
When it comes to identifying the best penny stocks, youve got to have a system and this is my system
I look at things like:
- Great stories from other sources
- Inspiring industry news
- Global views of the markets
- Random finds
So lets look at the sources one by one.
Finding the best penny stocks to buy from other articles
As you can imagine, I read. I read a lot.
Ill start by looking at the top news stories, and that often starts with Yahoo news then its on to company specific alerts that are forwarded to my email. Then I hit the major news sources The Wall Street Journal, Investors Business Daily, The Financial Times.
Then its onto the blogs
I target small business blogs, looking for ideas, trends, and topics.
Now to be honest, I dont find a ton of new penny stock ideas with this initial research. But what I do get is a good macro picture of whats going on in the markets.
For example, how oil prices are trending, what impact offshore drilling has versus onshore. What oil consumption changes are looking like.
I also look for industry news and country specific news Chinas growing, Indias selling gold, Brazil is opening up oil drilling.
These little bits of information help me gather up a bigger picture of whats happening in the world.
What youll find interesting is my lack of focus on the markets
You see, while I keep an eye on the S&P 500 and the major markets, I really dont focus on those data points for my trading.
Penny stocks are all about the company and less about the market so unless the market is in a freefall (where Ill stop buying for a while), it really doesnt impact my research and trading.
Finding the best penny stocks to buy from industry news
So at this point Ive got an idea that seems to be everywhere
Lets use Gold as an example
I like gold and while I wouldnt recommend buying the shiny metal for your safe, I would look at some of the penny stock gold players.
So, once you get honed in on an idea, you start focusing on the industry.
Theres more than just having an idea, youve got to dig in. Whos finding gold (the exploration companies) whos mining it? What about processors and middle men between the producers and end users.
Who uses gold what industries are they in, what percent of their costs is made up of gold in the Jewelry business, its expensive!
This gives you a GLOBAL view on finding the best penny stocks to buy
Now keep going start digging in start looking for gold exploration, miners, producers, users and start looking at the small penny stocks in that industry.
So how do you find the penny stocks?
By now you should have a list of company names players to give a look at
Focus on the big players first These wont be penny stocks but its the start of the path.
Read their filings and press releases
Read the company filings, many list trading partners, customers, competitors jot those company names down and keep going
Your list is growing!
Once youve gone as far as you can, visit the exchange websites. Plug in your company list and see who else they put in that industry or sector.
Jot down those companies
As you go through the exchanges, you can visit the NYSE, the NASDAQ, the OTCBB, the pink sheet markets all list other companies by industry.
Now you probably have a list of 150 or 160 companies (or more) in one space.
Now you can take a global view and look at international exchanges like London, Canada, Japan, Frankfurt, and others (if you dont mind international investing).
By now you should be up to 200 or more companies and if youre doing it right, more than half of them should be penny stocks to research further.
Researching individual stocks is a whole other article!
So thats how I find my best penny stock ideas
But there is one more type of find that Ive got to explain Its the random ones.
Randomly finding the best penny stocks to buy
You see, when youre doing all this research, youre going to come across some random companies. They wont fit into the industry youre focusing on they may do something strange and different
They are the square peg that doesnt fit the round hole!
These are the most important ones to keep an eye on often times they benefit from great trends in one industry, but would normally be classified in another.
For example, I found an investment called Primedia who did real estate magazines while researching the real estate market. They didnt fit into the industry they didnt have a nice neat classification but I made 700% on my investment all because I kept my eyes peeled.
I hope this helps answer your question on how to find the best penny stocks to buy!
What do you think?
Am I right on or am I way off?
Did I forget something? Let me know by responding to my email, or leave a comment on the website!
Profitably Yours,
Penny Stock Research
Category: Investing in Penny Stocks, Penny Stock Tips
