New Penny Stocks - 4 Tips For Picking Them Before They Take Off

To be part of the profit action offered by the next rising star in publicly-traded companies, there are new penny stocks to consider, if you can locate them. When learning to pick the hottest new penny stock, you need to hear about them before the vast crowd of investors run them up in price. The goal is finding cheap shares that can easily double in price and then making profit quickly.

Think about the difference in a new penny stock going from 50 cents to more than a dollar, in a day and then compare it to a large market share going from $50 to $100 and you will pick these low-cost shares to make profits quickly. There are a few pointers you can use to discover these companies with great potential, before their share prices explode. You can do a little research on your own, but do you know where to start looking?

Get Ahead Of Publicity Campaigns:

Many of the new companies just need a good public relations firm to publicize their firm by getting investors to purchase shares. Most investors aren't aware they will trade shares with a publicity or advertising firm, right before they are getting ready to launch a marketing campaign and this share transfer has to be reported with SEC filings. If you can get SEC filing information, you can purchase shares before everybody finds out about them and drives the price up. You can do this research online.

Beware Of "Pump And Dump" Hype Scams:

On the opposite side of the coin are the hype scams where a bunch of stock is purchased by a scammer that wants to drive up value, without the basic fundamentals to back up the price. Make knowledgeable trades on new penny stocks because there are a lot of speculative trades being done, too. For day traders, you can make the plays and get out before the "dump" phase of the transaction happens. Be careful about purchasing overly-inflated shares and if you see a drastic upward trend, make sure you aren't getting in at the peak, or you could lose all your money.

Penny-Stock-Picking Software:

There are some helpful investment tools on financial websites and you can find some recommendations for the best penny-stock-picking software programs to make the job easier. Whether you are looking for the next rising star for long-term investment strategies or you are thinking about becoming a day trader and making quick profits, these mathematical algorithms can do all the hard work for you. These automated stock-picking programs can be the perfect solution for beginning investors, especially.

Volume, Volume, Volume:

It doesn't help to buy a new penny stock you can't get rid of, quickly. You need to look for stocks listed on the OTCBB instead of pink sheets, because they are much safer, but volume is an important factor, regardless. While you won't see the volume of shares traded that are found in "big board" shares, you can still find some high volume trading in new penny stocks. When you are looking for the next rising star, the hottest shares will be those that start trading in higher volume trends, indicating an active marketplace for the company's shares.