Penny stocks are your best chance at triple-digit returns and I’ve found a list of penny stocks trading under $1 per share with big potential. I’ll show you a penny stock screener and how to find penny stocks to buy.
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In this video, I’ll show you how to invest in penny stocks along with the penny stock screener and criteria I use to book that double-digit return. I’ll then reveal five more penny stocks all under $1 a share with an average 349% upside return to the average analyst price target!
We’re coming up on three years of penny stock investing with an average return of 56% on the portfolio and three stocks up more than 400% over that time. In fact, shares of Ryerson Holding, ticker RYI, are up over 700% since recommending them April of 2020.
Using the penny stock screener, we’ll look for stocks under $1 per share along with some important criteria; high growth potential, positive sales growth, cash availability and a history of positive earnings.
These first two criteria are at the very core of penny stock investing. You’re trying to find companies on the verge of becoming the next Apple or Amazon. Those startup companies with high growth potential and that proof in growing sales.
Those last two criteria are extremely important. One of the biggest reasons new companies fail is for lack of funding, not having enough cash to carry the business through that initial growth stage, so you want companies with plenty of cash reserves.
I also wanted to narrow our list to only those with positive earnings, the kind of quality growth stocks that aren’t just trading on the hope that someday profits will turn positive. It’s a distinction we’ve been seeing play out in the markets lately where the growth stocks that have yet to post profits are getting hammered while those with positive earnings are holding up.
Understand first, that a lot of penny stocks trading for less than a dollar are going to only be available on the OTC market. That’s over-the-counter and stocks on this exchange don’t have the same financial reporting requirements you find on the Nasdaq or the NYSE.
That means you get a lot of shoddy companies and honestly, a lot of bad stocks!
So you’re going to have to do a lot of your own homework when it comes to these stocks, digging into the financial statements. You can find the financial reports of any company by searching on Google for the company name then, investor relations. That’s going to take you to the IR page on their website with official filings and other news on the company. This is why I tend to be very selective in penny stock investing, only investing in those companies that are already profitable and have proven track records of sales growth.
You’re already taking a big risk investing in stocks this small, you want to stack the deck in your favor by narrowing your list as much as possible with the criteria and a screener that only shows the best of the best.
0:00 Best Penny Stocks under $1 to Buy 2022
1:18 Penny Stock List for Stocks under $1
4:00 How to Find Penny Stocks under $1 per share
7:50 Three Warnings Every Investor in Penny Stocks NEEDS to Hear
8:58 An Investing Strategy for Penny Stocks under $1 a Share
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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.
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