Different Types Of Penny Stocks To Look Closely At This Year
It's critical to appreciate there are different types of Penny Shares, before you make any investment call.
You have to know what are the best penny shares to buy, and why,and the object of this essay is to help make the correct decision about the penny shares you might want to contribute to your portfolio.
Firstly Young or New Issue Penny Shares
What this implies is that the Penny Shares you may want to buy are those of young Firms who have only been in business for a short while, or alternatively have only just become public. You want to appreciate that pretty much every Company was once a penny share to buy, before expansion turned them into a relatively uninteresting comparatively stable big company with a record. Young or new issue penny shares to buy are of course risky, but of course the excitement is the potential which is nearly limitless.
Secondly Recovery Penny Stocks to Purchase
These are penny shares in companies that have fallen on tough times, for whatever reason. As they have gone downfrom their previous highs so has their share price. What we are looking at here are penny shares that have potential to grow, due to stuff like restructuring, which may be followed by growth. You may come across a shell company, which is a firm that exists but doesn't do any business or have any assets. Most engaging of all is a Listed Shell Company meaning it has shares which can be traded giving it heavy value. It may be set up for new management, or even a cash injection for a new stockholder meaning they may be penny shares to buy.
Thirdly Cyclical Penny Shares
These are penny shares that rise and fall virtually according to the season. In this situation the season could be because of the business sector they fall into, or whether or not the economy is growing or shrinking. Anything to do with the car industry might be a case in point, which does badly in a recession, but well when the economy is expanding fast. Clearly these are penny stocks to buy when they are at their low position in the cycle. You'll need to repeatedly research share prices for these varieties of penny shares.
Fourthly Defensive Shares
Peculiarly enough this type of penny share comes into its own during a recession, when the ‘luxury ‘ penny share value is depressed. You should look closely at requirement areas like food because patrons have to buy food with no regard for the industrial situation. It's not so much these penny shares decline, more their worth increases.
Fifthly Web Penny Shares
These penny shares are very different to bricks and mortar shares, because Web Firms may have no real assets at all, so their share price is likely to go up and back down at speed according to the public perception of what they are doing, which could be quite wrong!! Also watch out for the penny shares of older corporations who have decided to go down a Web route.
Eventually Biotechnical Firms with Penny Shares
These companies are in the leading edge of technological innovation, and sometimes a little paragraph in a newspaper can alert you to a company engaged in such work. Remember less than 10% of their inventions ever get developed, but the successful launch, predated by a penny share investment may be awfully profitable.
Remember, before you jump in, the internet could be the source of excellent advice on Penny Shares.
How to buy penny stocks