Stock Market Watch

From Rags to Riches – Penny Stocks under the Microscope

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Penny stocks are well known to traders for lightning fast percentage gains, but is there any evidence for a penny stock to potentially become a high dollar stock? There have been quite a few penny stocks to become big company stocks over the past 10-20 years, but considering the amount of penny stocks trading on the market; it is uncommon. Penny stocks are high risk and high reward so prudent investors do not usually allocate a large portfolio percentage to penny stocks, if any at all. There are questions that investors should ask when deciding to invest in penny stocks with potential: is the company poised for a reverse merger with a larger company, does the company offer a valuable product, is the company actually legitimate, and can this company actually make a profit? Get my next ALERT 100% FREE

Penny stocks are hard to define in that there are many definitions of what a penny stock actually is – some traders and investors accept that any stocks trading under $5 are considered penny stocks while others only consider those stocks trading on the pink sheets and over-the-counter markets with a small market capitalization. There are some very well-known companies that have in the past traded below $5 that should probably not be considered penny stocks, such as Ford Motor Company (NYSE:F), Citigroup Inc. (NYSE:C), and Sprint Nextel Corporation (NYSE:S).


Market capitalization is definitely the defining factor that distinguishes the above stocks as big company stocks from penny stocks… Ford’s current market cap is $48.6B; Citi’s current market cap is $98.07B; and Sprint’s current market cap is $6.95B. Market capitalization is simply the amount of tradable shares times the current share price, i.e. Ford currently has 3.8 billion outstanding shares and is currently trading at a share price of $12.79. Get my next ALERT 100% FREE

Have there been any penny stocks to actually hit it big? The answer is absolutely! Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), Panera Bread Co (NASDAQ:PNRA), and Dendreon Corporation (NASDAQ:DNDN) were a few that actually shook the market when their companies were called to the “big leagues!”

In 2009, Dendreon rocketed from a low of $2.55 to a high of $27.4 in only a few weeks thanks to favorable trial results for Provenge, its cancer vaccine. Panera bread became a sensational restaurant franchise and with healthy food trends has continued to perform well as it currently trades around $155. Green Mountain Coffee just exploded when the company announced it was offered a deal to sell its product in Wal-Mart stores around the world! These x-factors are often hard to predict, but when a penny stock does become a big company stock – $10k can expediently transform into $100k or more… Get my next ALERT 100% FREE

KMA Global Solutions International, Inc. (PINK:KMAG) traded as high as $.0021 during Friday’s trading session and last traded at $.0018 for a gain of 100% from the previous close…

KMA Global Solutions International is a leading worldwide manufacturer and supplier of Electronic Article Surveillance (EAS) labels for the multimedia, retail apparel, health/beauty aids, soft goods, and over-the-counter pharmaceutical industries.

Solos Endoscopy Inc (PINK:SNDY) traded as high as $.0062 during Friday’s trading session and last traded at $.0048 for a gain of 14.29% from the previous close…

Solos Endoscopy is a HealthCare instrument company whose mission is to develop and market high quality and innovative instruments for the screening, diagnosis, treatment and management of medical conditions.

America West Resources, Inc. (OTC:AWSR) traded as high as $.77 during Friday’s trading session and last traded at $.715 for a gain of 15.32% from the previous close…

America West Resources is an established domestic coal producer engaged in the mining of clean and compliant low-sulfur coal. Get my next ALERT 100% FREE

Abtech Holdings Inc (OTC:ABHD) traded as high as $.91 during Friday’s trading session and last traded at the high of the day for a gain of 21.33% from the previous close…

AbTech Industries, a subsidiary of Abtech Holdings, is a full-service environmental technologies and engineering firm dedicated to providing innovative solutions to communities, industry and governments addressing issues of water pollution and contamination.

Wits Basin Precious Minerals, Inc. (PINK:WITM) traded as high as $.064 during Friday’s trading session and last traded at $.058 for a gain of 19.59% from the previous close…

Wits Basin Precious Minerals is an exploration stage Company, which through its subsidiaries is engaged in the business of exploration and development of minerals.

Article Written by Oliver Crowne

 

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Post Written By: Oliver Crowne

Oliver Crowne is the main editor for http://www.StockPreacher.com


Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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