Penny Stocks to Buy In September: We’ll Let You Decide
Looking for hot penny stocks to buy?
What’s your first move?
Well, it’s a given that you want to be looking at financial results.
But after you check out the revenue, or the absence of revenue, and after you go through the balance sheet to see how much money and how much debt the company has, there’s more.
Here are 3 things to look for so you can find the best penny stocks to buy right now.
Lawsuits Can Send Your Penny Stock Into A Nosedive
A Google $GOOG or an Apple $AAPL seems to be on the receiving end of a lawsuit every day. And for big companies, lawsuits aren’t nearly the big deal they can be for small companies.
A lawsuit can take your good penny stock and send it plunging.
It’s not just the expense of mounting a legal defense. It’s the possibility of a judgment that could delay the introduction of a make or break product, or hit the company with a crippling fine.
Maybe the lawsuit could even put the company out of business.
This means when you’re buying penny stocks, you want to keep an eye on the legal docket.
The good news… it’s not hard to do.
Publicly traded companies are legally obligated to reveal what kinds of legal issues they’re dealing with.
You can find this in the 8-K and 10-K reports the company files with the Securities and Exchange Commission.
But there’s a flip side to the lawsuit coin. And it could work to your advantage.
Your company may be suing another company to protect itself. It could be on the receiving end of a financial windfall if it’s awarded damages.
Should you count on this happening? Probably not. Projecting revenue based on the outcome of a lawsuit isn’t a good idea.
Intellectual Property Is Boring But Important
When your penny stock company is well-managed and has its ducks in a row, when trademarks, patents, and other intellectual property rights are protected, that’s a good thing.
Small companies can enjoy big advantages when they have the right patent.
When something happens on the intellectual property front that lets a small company collect royalties or rights fees from a big company, revenue can explode.
Let’s say you’re looking at a penny stock for a biotech startup. The company wants to produce an ingredient that a big pharmaceutical company could buy and use to produce a more effective vaccine.
If the startup has not made an investment in legal fees to protect this ingredient, the entire business could crash and burn.
The big pharma company could legally cut the small company out of the action.
But the tables could turn, and the big company could cut the small company a big check if there’s strong intellectual property protection.
Superb Management Teams Deliver Superb Results
When you’re looking for the best penny stocks to buy right now, look to see if the management team is committed.
A good way to find out is to take a look at how much stock they own.
You can also see if they’re buying or selling their company’s stock.
But here’s something to keep in mind. Just because a key employee owns a large block of his company’s stock doesn’t mean this person is committed.
Let’s say the employee has 20,000 shares of stock that’s trading at $1.00. A big company that wants to hire this person only has to offer a signing bonus of at least $20,000 to make this benefit of stock ownership go away.
Poaching key people from penny stock companies is a very real threat. And unfortunately, it’s very difficult to measure this risk when you’re looking at which penny stocks to buy.
You never know with 100% certainty if the key employee sitting on a lot of stock is committed to his company, and believes the value of the stock is about to skyrocket, or if he’s ready to jump ship.
Looking For Penny Stocks to Buy In September?
Prowl through the oilpatch. Think oil and natural gas.
Use these tips I just gave you and see what you can turn up in the energy sector.
It’s not hard to find an energy penny stock that’s been beaten down to a bargain basement price.
You’ve got some real hardship cases. Some legitimate players.
But don’t assume they’re ready for a turnaround, just because oil prices are down.
An outfit like Bison Petroleum Corp. $BISND is a good example.
When you check out this chart to get a feel for what this company has been going through…
Well, you can’t help but wonder if this penny stock was a pump and dump poster child that’s somehow managed to cling to life on the pink sheets…
When you look at a penny stock in the energy sector, bring plenty of patience to the table.
(The minute you start looking at Bison, you can tell there’s trouble. The #1 tipoff is that it’s not actively traded.)
Smart investing in penny stocks means steering clear of stocks like this, even when the industry sector is appealing.
As legendary investor Jim Rogers reminds us…
“Bottoms in the investment world don’t end with four-year lows; they end with 10- or 15-year lows.”
So there you have it… some good ways to make a good decision on the best penny stocks to buy in September.
Lawsuits, intellectual property rights, management’s commitment, they all matter.
(And so does your patience.)
If you have a question about a stock or investment idea, shoot us an email or leave us a comment on the website.
Better yet, if you own any of these stocks… or are planning to buy… shoot me an email and let me know why!
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
