Penny Stocks – How To Find The Next Big Penny Stock
The Dynamic Wealth Report
July 10, 2009
Here's How To Find The Next Blockbuster Stock
by Robert Morris, Editor
Now that we’re right smack dab in the middle of the release of
our new, sub-$1 penny stock trading service, we’ve been getting a lot of
questions. But one seems to keep showing up over and over.
“How do I find such great, little stocks?”
For obvious reasons, it seems to be a very popular question.
Now, let me say this first. A lot of hucksters on the internet make
outrageous claims about trading penny stocks. Don’t believe them.
There‘s really no special formula that separates the winners from the
losers 100% of the time.
Don’t listen to their claims of making BILLIONS using insider secrets.
I’ve been involved in the financial markets for years. What I’ve learned
may surprise you.
There is no magic formula or secret sauce. The key to identifying great
penny stocks is lots of research and lots of reading. It’s hard work.
Don’t be surprised. You don’t need a high priced computer, fancy
software, or a PHD in mathematics. What you do need is intense focus and
a love of reading.
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Searching for a great stock is like searching for Prince Charming. You’ll “kiss” a lot of frog companies before you find the prince. I’ve
put together a quick list of how I start my research into great penny
stocks. It’s something you can start applying right now to your own
research.
Simple Screens
I’ve had great success getting ideas from simple screens run on Zacks. If you don’t want to pay for a subscription, try the free finance
portals. Websites like MSN and Yahoo Finance have screening tools as
well. These screens are great at cutting down a list into bite size
pieces.
And best of all, I can focus on a few key metrics (like revenue or
earnings) to help refine my picks.
Follow the Leader
Sometimes the best stock ideas come from other investors. It makes
sense. If you’re looking for great penny stocks, figure out what the
great investors are buying. It’s easy to see what top performing fund
managers and billionaires are investing in. Just hit the SEC website and
search through a list of their holdings. You never know what
idea you’ll find.
Read, Read, Read
If you’re always looking, you’re bound to find something. I’m constantly
devouring financial websites, newspapers and magazines. I don’t limit my
reading to financial publications. Some great ideas can sprout from
industry rags and off beat news sources.
Don’t forget the lists! Sometimes you’ll see great ideas on the “New
High” or “New Low” list. Check out the “Most Actives” as well…
The Lynch Method
The last idea I’m going to leave you with was “invented” by a great fund
manager, Peter Lynch. He doesn’t manage money anymore, but in his day he
was the best. He was always looking around for great investment ideas. Often they were right in front of his face.
Lynch was famous for going to a mall or grocery store and exiting with a
bunch of new investment ideas. He’d find great products that people were
snapping up left and right. He’d research the companies making those
products, and often invest in their stock.
He found some huge winners using this simple strategy… a strategy anyone
can follow.
You now have four easy ways to identify great penny stocks and uncover
the next big winner. Once you’ve got a list, then the real research
begins.
Editor's Note: Robert left out one other way to identify great penny
stocks… let him do the work for you! We just launched his new service
that focuses solely on high-potential, sub-$1 penny stocks. We’re
limiting the initial memberships to just 1,000. So, if you’re
interested, I wouldn’t hesitate too long to check it out.
Click here
to learn more…
• Petrobras Brasileiro (PBR) was upgraded by UBS this
week. Despite falling oil prices, the bank gave the stock a price target
of $45.
• Hansen Medical (HNSN) was downgraded to a “Hold” rating
by Brean Murray and Lazard. The stock's trading at 10% off its 52 week
high… it looks like this downgrade was a little late.
• Global Hunter Securities rolled out research coverage on Ormat
(ORA). Looks like a solid idea to me. Ormat is a leader in large scale
geothermal energy.
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