Small Cap Stock Picks - How Do I select the Best Penny Stocks?

Small Cap Stock Picks - How Do I select the Best Penny Stocks?

Small cap stock picks are defined in many ways. First, it is defined according to the price per share. Under Sec rules, a share of stock is carefully a Penny Stocks like the Pink Sheets and the Otcc. Third, Penny Stocks are best traded on a short-term basis instead of becoming part of long-term investments.

Tips on selecting the Best Picks

As previously implied, you must adopt unavoidable criteria in selecting the best small cap stock picks. You should imagine the Price-Earnings (Pe) ratios of all the stock picks under consideration. Choose the Penny Stocks with the bottom Peg preferably those with less than 1.0 ratio.

However, it is not just ratios that we are looking for when selecting the best small cap stock picks. You also need to consider the financial statements. You have to look for the latest financial statements in order to determine net profits, cash flow, liquidity and solvency, among other criteria.

You must also do your research into the enterprise management. After all, it is citizen who steer the enterprise into best or worse grounds. If possible, you should get to know the citizen behind the management.

Where to Find Penny Stocks

As previously mentioned, there are many venues from which to trade in penny stocks. You can go to the Nasdaq SmallCap Market, which is probably the most reliable and safest place.

The shares listed at the Nasdaq SmallCap shop are usually valued at and above so that any stock worth less than is immediately dropped down to the Otc-Bb. Brokers and traders have no qoute dealing within this shop because of perfect investor visibility and definite reporting standards.

There is also the American Stock Exchange. Although the shares traded in Amex are less than those found at the Nasdaq SmallCap, you will still enjoy the same benefits. You can also find stock picks at the Otc-Bb and the Pink Sheets. These are less reliable than Nasdaq and Amex but if you rehearsal caution, you can still get the best stock picks.

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