Analyzing Penny Stocks – Paradigm Capital Management

Getting a good penny stock takes a bit of leg work, some research, impeccable timing, and maybe even a little luck. Penny stocks, also known as micro-load stocks, are stocks traded through off the major exchange for significantly less money than traditional stocks. These stocks generally trade at less than $5.00 a share. Since these stocks are traded “over the counter”, most investors buy and sell them without a broker. This requires investors to do some research and develop and implement a comprehensive investment strategy to protect against big losses. Good penny stocks offer investors willing to face a riskier, more volatile market a chance at a bigger reward.

Many websites are dedicated to researching and analyzing these stocks. These analysts pay close attention to a company’s liquidity, debt ratio, equity, and assets. Since these stocks are not traded on the traditional exchanges, they are subject to less rigorous filing and listing requirements. This makes finding good research on them difficult. In addition to utilizing this stock tip websites, you can research good penny stocks on sites like Google Finance and Yahoo Finance.

Many websites specializing in good stocks offer you access to their chat rooms and discussion forums. This gives a potential investor an opportunity to hear about the experiences of other investors, and perhaps an opportunity to see their trading portfolio. You generally need to pay a small monthly or yearly subscription fee to get access to the sites recommendations and chat functions.

Many analysts are recommending these stocks that are poised for big growth over the next few months. Gaming systems, social media support, beverage companies, and power and natural gas companies are expected to make gains over the next few months. For investors looking for good penny stocks, they should follow some national and regional trends and keep an eye on companies looking to make big moves.

We at Paradigm Capital Management believe that finding good penny stocks are only the first part of the equation. These stock traders must have a disciplined approach to buying and selling these volatile stocks. Since these stock investors are generally not using a broker, they must stay on top of their picks. These stocks can gain and lose value much quicker than more traditional stocks. Utilizing stop orders is one way to stop the hemorrhaging from a stock losing its value. Keeping your stock portfolio is also important, so don’t invest all your money in the same company or field.

Investing in good penny stocks is not for every investor. To successfully play the penny stock market, you need to have a high tolerance for risk and volatility. Investors who can handle the extreme up and downs of this market can make a good deal of money for a smaller than average investor. As with any investment opportunity, it is important to understand the risk involved and prepare accordingly. Good, independent research, expert analysis, and your own common sense and intuition can go a long way in making your penny stock investment a profitable one.

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The Fundamentals of Good Penny Stocks

You may be wondering what constitutes a penny stock. Some people are confused by the definition. Technically, penny stocks are any shares that trade outside of the normally regulated stock exchanges. So you won’t find these on the NYSE, the NASDAQ, or AMEX.

 

This may make you feel shaky, because there’s no set price at which these are trading. There can be many prices for a given stock at a point in time. Of course, that very lack of regulation can make them a wonderful buy if you get in at the right moment in time. That’s where the opportunity for a windfall comes in.

 

They are sometimes seen as volatile, but remember that volatility goes both ways. You can make it work for you. So if you have the money to purchase these penny stocks and the money and time available to hold them until the time is right, you might want to consider this kind of trading.

 

Of course, as in anything having to do with the stock market, luck plays a major role also. You do your research, buy and sell as your information and your intuition guides, and then rely on all of this coming together at the right moment.

 

One right moment for buying is when a company is just starting out. If you like what the company is doing in terms of its products, services, and management, you could invest when the price is very low. If you hold it for a while, you’ll find that your investment has paid off nicely over time.

 

When you’re deciding what to purchase, be aware that there are scams. Sometimes people in the know artificially raise the prices so that they can sell them at a high price. This negates the natural ability of the market to behave in a predictable way.

 

They call these schemes pump and dump, and you’ll have to do your research into a stock’s patterns to make sure that the one you’re considering isn’t part of such a thing.

 

Consult with our experts at Paradigm Capital Management if you want to learn more. We at Paradigm Capital Management are focused on a single minded purpose: To ensure that our clients have the best information on which to base intelligent financial decisions in pursuit of superior investment performance.

Read also: Paradigm Capital Management – Good Penny Stocks to Watch

Things to Look For in a Penny Stocks Recommendations Service

When you’re just starting out as a trader and trying to figure out the pink sheets stocks to trade, you’re likely to spend a lot of time online looking for the best penny stocks recommendations. Be very prudent about accepting anything that anyone has to say to you.

 

The problem is that some people just want to play you. Some professional traders keep fake blogs to convince people to buy a particular stock when they should be selling it and vice versa. It’s important to remember that this stock market is a game with winners and losers. The winners try all sorts of tricks to stay in the lead. Follow these four tips by our experts at Paradigm Capital Management to find the best penny stocks recommendations service.

 

  • Locate a community – if there’s a community of people posting on a blog, forum or twitter account related to the penny stocks recommendations service, chances are it’s legitimate. Communities gather around sites that provide proven money-making results.
  • Look for advice and explanations, not just a ticker symbol – Be wary of any stock picking service that doesn’t explain why a particular stock is the best. The best services teach as well as inform, so you can be aware of why you’re doing what they’re advising you to do.
  • Do some research – If you think a particular stock alert service is solid, do some research into any symbols the service provides. Spend a day watching it and see if you can figure out when you should have bought and when you should have sold, if at all, if you would have wanted to make a lot of money. If your research pans out, the place is generally legitimate.
  • Look for a current events section – The best pink sheet stocks recommendations service will always have a section on current events related to the hot stocks of the day. This is in keeping with the philosophy that it’s better to teach a man to fish than to give him one.

 

If you’re looking for the best pink sheet or micro stocks, you may be looking for a while before you start to make sense of what you see. In the mean time, of course, go with the stock advice from the best penny stocks recommendations service like Paradigm Capital Management.

 

Ultimately as a penny stock trader, you want to be able to look at the movement of any penny stock’s past couple days and determine whether it’s lucrative to invest in. But practice makes perfect.

Determining the Best Time to Do Penny Stock Trading

When is the best time to do penny stock trading? As with any investment in any type of stock, everything is speculative. If everyone could determine the exact time to jump in, then everyone would be a millionaire. However, there are of course a good and bad time to trade. Due diligence is something that many experts recommend to both new and experienced traders. While stocks are generally considered to be a very dangerous investment, the rewards are also huge. You probably know by now that the key is to minimize the risks of investing in pennies. You should be able to search for some signals that indicate it is a good time to purchase a penny stock.

 

Conventionally, a penny stock is any stock trading for under a dollar per share. But you will hear that it is technically any stock that sells below $5. Getting started with this type of stock trading is easy. Simply work with an online stock screener that categorizes all stocks below $5 or $1. A stock can trade for a very low amount since the stock is issued by a businesses that is still small and starting out, hoping to grow. There is a risk here since because in reality, new companies can just as easily go out of business. On the other hand, which is evidently viewed negatively, a penny stock can also be a stock of a business that’s been operating for some time but has fallen into a downward spiral financially. So be careful what you pick – these are just some basic precautions, which you will soon learn through experience how to tell when to invest in a company or not.

 

If a stock has gone way down, don’t jump in, unless if you really believe that the business will be able to get back on its feet in unlikely times. Perhaps there will be new management. Or maybe there will be a big merger coming up. Still, if a stock price gets under a dollar, it is most likely that it’s not coming back up. Thus, comprehensive research, observance and experience will give you a better idea when the best time is to do penny stock trading.

 

If you start out with hot picks, you’re on the right track. Starting out with worthless picks will only mean a road to disappointment. When penny stock trading, you’d want to look for those companies with the highest potential. Try to focus on technology, target a niche, and work with acquisitions and mergers with larger companies.

 

Penny stock investing can be a good venture if you know where to invest your money on. Consult with Paradigm Capital Management to find the hottest penny stock list online. Find tips and tricks from the Paradigm Capital Management experts, and start building your penny stock fortune now.

 

Read also: A Look Into High Volume Penny Stocks

Preparing Your List of Penny Stocks to Trade Profitably

Well, its not unusual for new investors to prepare a list of penny stocks that they can hope to build their fortune with in a highly lucrative stock market. Trading in penny stocks indeed appears very tempting and lucrative, its especially popular amongst small investors who intend to build a fortune with very little capital to invest with initially.

 

In that case who wouldn’t be tempted to buy such dirt cheap stocks in such huge volumes. Lets suppose you as a day trader invest $500 to buy 5000 shares @ $0.10 of a highly potential penny stock, and after few weeks if the price of such a share increases by say 500% in that case the share price would be $0.50 each. So an investment of $500 would then fetch a return of $25000. That too in matter of weeks. If you had invested $500 for a large cap share, it won’t ever give you a 500% return, that too in just few weeks time.

 

No wonder day traders are so much obsessed in preparing a list of penny stocks and narrowing down their focus on just few of these that they wish to build their portfolio with four or five of the hottest penny stocks. Now how does one really go about scouting for such shares with which to build a list and then trading them for fortune. For this one needs to carry out research and analyse the results to find which amongst the stocks are generating interest amongst investors that has resulted in some kind of momentum. How is the shares moving and what kind of pattern does it make, that instantly is a hit and considered hot for investment.

 

A novice will be overwhelmed with the large flow of data from various sources including stock exchanges. Moreover since the shares are valued less than $5 hence they are not subjected to strict regulations of the SEC to disclose everything about its nature of business, its future plans, its past performance etc. All these details are available only with expert traders and brokers. Moreover the market being extremely volatile makes trading in penny stocks highly risky. Its always reminiscent of a war zone kind of situation for investors to put in their money with the hope to build a fortune around it. There are risks of investing in over hyped stocks and being victim of a pump and dump scheme by scam artists waiting to grab your money.

 

There are of course sophisticated stock technical analysis software and newsletters offered to paid members from highly reliable and reputed sources who can help you to prepare a list of penny stocks to trade profitably with details of entry and exit points, to minimize risk and for maximum gains.

 

To learn more, consult with the experts at Paradigm Capital Management, a penny stock and hedge fund managing firm. Our three decades of experience provides an exceptional level of insight that is reflected in our high-conviction portfolios.

 

To learn more, visit here: http://www.paradigmcapital.com/team/key-personnel/

Where to Go For Penny Stock Recommendations?

Despite the downturn in the markets over the past few years, more and more people are getting into trading small stocks and taking hold of their own future. It is a great idea for every investor to fully understand what they are trading and why and how they are properly diversified. For this reason, many people are looking for penny stock recommendations because they are interested in diversifying even further. By adding micro stocks to your portfolio, you are giving yourself the real opportunity to make some incredible growth over a short period of time.

 

When you go looking for penny stock tips, you absolutely have to be careful where you get your information from. There are many individuals and small companies on the internet who are using the public interest in these small stocks to give faulty penny stock recommendations, recommendations that only benefit them. Sometimes these are hard to identify, so make sure you follow through with due diligence to avoid getting burned.

 

Penny shares, in general, do not trade in the pennies. They trade for less than $5.00 per share, and have the ability to move dramatically. They rarely move with the market. So, if the DOW goes up one percent, do not expect your penny share to go up one percent, too. Because there is so little volume and open interest in small cap stocks, they will not move because of the market or market sentiment.

 

Penny stocks recommendations are necessary in order for you to identify which stocks are about to move or “pop” and why. There has to be a reason. If someone tells you about a stock and cannot give you a legitimate reason as to why it is about to explode, then stay away. Good penny stock recommendations will come to you with the background on the company, what it produces, why it is important, and the real reason behind the changing share value. Perhaps the company is about to be bought out, or maybe they are about to have a drug passed by the FDA. There are many reasons why a penny share will move quickly, but you need to know what they are.

 

With all investing, you never want to have too much of your cash in one place, so do not get too greedy with penny stocks, but they can make you an awful lot of money quickly if you do it the right way.

 

To learn more, consult with the experts at Paradigm Capital Management, Inc. a penny stock and hedge fund managing firm. The firm was founded in 1972 and is based in Albany, New York with an additional office in New York City.

Also read: Does the Best Penny Stock List Include Oil Growth Stocks?

Reading Penny Stock Market Data

You can greatly improve your chances of making money from penny stocks by learning to read stock market data. The stock market gets input from a lot of sources. Understanding the different factors that influence the market, the companies and their stock prices is an invaluable skill for every microcap stock trader.

 

Listen to current economic trends to know which area of the economy is or will experience growth. Watch the direction of government spending and even foreign investment. Now compare the information you have with current performance of stocks in the market. You will notice a relationship between this information and the industries that are up and those that are down. Good stock traders profit from keen observation of factors that influence the market.

 

Start with a small list of about ten stocks to study and analyze until you become better. You can get a list from, msn, yahoo or Google finance. Research these companies in-depth. Watch out for the companies that are looking stronger than others in their sectors. Check out earnings per share ratio. Read the company’s financials; annual or quarterly reports. Check the trading volume. Trading volume is an indication of how liquid a stock is. The higher the volume, the easier it will be to sell after you buy.

 

There are different types of penny stock charts. All you need is to know the subject of the chart to have a basic understanding of it. Some charts measure daily moving average of a penny stock whiles others just show the price. Watch out for the following:

  • The support level is the lowest price of the stock at different intervals over a given period.
  • The resistance level is the highest price the stock maintains even when demand is high.

 

These two make up the penny stocks trading range in the period of time. A stock with a high volume of trade rarely falls below the support level and is a good penny stock to buy. Trend lines on the charts can also show you future price movement of the stock.

 

For more details you can consult with the experts at Paradigm Capital Management. With a long history of small cap investing and micro cap funds, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact.

 

Our three decades of experience provide an exceptional level of insight that is reflected in our high-conviction portfolios.

Call us 212.364.1830

 

Read also: Penny Stocks to Leverage Your Investment Portfolio

Why Do the Best Penny Stocks Initiate Buy Back Programs?

The most direct act that a company can do to increase the price of its stock is to buy up its own shares in the open market. The best penny stock companies often launch buyback programs when they seek to diminish the number of shares outstanding (the number of shares available in the market). The share bought in the open market can be retired. Retired shares are no longer counted as outstanding. Investors will value the remaining shares at a higher price.

 

As an example: ABC Company has a $5 million market cap that has 10 million shares outstanding. This would give ABC a price per share of.50. With a corporate buy back of shares the outstanding number of shares would be reduced. Supposing ABC retired 2 million shares… that would leave 7 million shares outstanding. If the market cap remains at $5 million, it has no reason to go down since investors still have the same valuation for the company. Then each share would now be worth.71, which is.21 more than they were worth prior to the buy back.

 

There are a few reasons for instituting a buy back. The first reason is if the company wants to shore up confidence in the company. Company management wants to show investors that they have confidence in their business plan and stock… and continue to believe it is a solid long-term investment. It one thing for company insiders to announce news such as expected new earnings… and it is another thing for them to put their money where their mouth is.

 

The second reason a company may institute a buy back is to push up the price of a stock. The company knows that investors will translate the buying of a stock as a positive sign on the value of the stock. However, this can be done at investor’s expense. A company stock with no trading volume might start buying up the stock to push the price of its own stock up. However, this kind of activity is monitored by regulators, but investors still need to be careful.

 

In conclusion, make sure you conduct complete due diligence when you see a company initiate a buy back of its own stock. However, this can be a very good sign for a small company on the move.

 

Paradigm Capital Management is a small cap company. With a long history of small cap investing and micro cap funds, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact.

Our three decades of experience provide an exceptional level of insight that is reflected in our high-conviction portfolios.

Call us at 212.364.1830

Penny Stock Trading Myths and How You Can Beat Them

Making millions trading penny stocks isn’t very easy. Penny stock trading is an art that becomes perfect only after a long time. Stock traders always hear a lot about trading from everyone. There are a lot of myths floating around about stock trading. Here are some of the biggest myths explained by our experts at about penny stock trading and how you can beat them.

 

1) Buy Low, Sell High – the only way to make money.

This is one thing most of us believe in. Stock trading has always been about buying low and selling high. Traders tend to accumulate stock of companies, that they feel, will rocket up in the future. Sadly, however, most of these stocks just stay the duds that they are. You don’t need to buy low, sell high to make money on the markets. Buy when the time is right, even if it means buying a stock at a higher price that what you would have wanted to. Sell it when it goes further up. Bottom fishing never helped anyone.

 

2) You only need luck to make profits in penny stock trading

Trading on stocks, and making profits is a lot more than dumb luck. You have to have a lot of research behind the stocks that you trade on. Selecting a stock blindfolded isn’t going to help you. The best way to make huge profits while trading stocks is Penny Pump Finder- the #1 Penny Stock Recommendation program. With stocks picked by Penny Pump Finder, you will start making insane profits right from the start.

 

3) You need to be a pro to make profits while trading penny stocks

While trading stocks, the profits don’t go to the professionals. It goes to people who pick the right stocks, at the right time. You don’t need to be a pro at penny stock trading to do this. Penny stock picker is your personal stock assistant that picks the right stocks for you, month after month and gives you insane profits.

 

The best way to make insane profits while trading penny stocks is getting the advice of experts in this field along with penny stock picker. It has worked for many, and will work for you. With this, you can never ever go wrong.

 

Consult with the experts at Paradigm Capital Management. We can help you to meet your investment expectations from penny and micro stock. Call us at (518) 431-3500 to align our capabilities with your long-term goals.

Also read: Paradigm Capital Management Speculation Tips for Penny Stock Investing

Having A Diversified Penny Stock Portfolio

One of the best things about penny stocks is that you can build a massive portfolio without having a ton of money, so money really is no excuse.

 

If you are going to be a short term trader, jumping in and out of the market several times a day, then you probably don’t need to worry about building a portfolio. You are more of a scalper.

 

But for those who are more long term, in their thinking, you can build a solid portfolio of small cap stocks with just a few thousand dollars. All you have to do is start looking at all the different industries that are on the market, and pick some of the best small cap stocks within each of the industries.

 

For example, you can start with penny stocks in the alternative energy field, as there are A LOT of small cap stocks in that industry. Look at the financials on each of these stocks. Does it look stable? Have they been growing consistently year after year? These are just some of the questions you have to be asking yourself.

 

Just do that for all of the industries and you’ll have yourself a very diversified portfolio. So even though one of your cheap stocks may completely crash, you’ll be diversified enough with your other stocks, so that you it won’t damage your overall net worth. This way, you can build your account slowly and steadily.

 

For more info consult with our experts at Paradigm Capital Management a small cap company. With a long history of small cap investing and micro cap funds, Paradigm Capital Management employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact.

We have the experts when it comes to Small Cap Investment and we can definitely assist you with your financial goal, contact us at (518) 431-3500
OR visit us here: http://paradigmcapital.com/