Forums > Stock Picks > Stocks under $5 where Insiders are buying

1/5/2011 3:06:52 PM
Total Posts 187

Stocks under $5 where Insiders are buying

Investing in penny stocks has acquired something of a bad rap on Wall Street. Speculative traders certainly have a host of horror stories to share about these so-called "penny" stocks, securities of tiny companies priced below $5. Many of these companies hold next to nothing in assets, have limited operating histories, and don't even file their financials with the SEC, making them dangerously high-risk investments. But don't be so quick to rule out a stock based on size alone--not all penny stocks are created equal.

Single-digit stocks that trade on traditional securities exchanges and are transparent in their business practices can make perfectly sound investments. Sometimes, penny stock companies are viable operations that simply had a run of bad luck--perhaps they're carrying a heavy debt load, recently lost a major client, or are simply dealing with the repercussions of a negative industry trend. And since institutional investors don't usually trouble with these microscopic stocks, there's that much more opportunity for individuals to find good values.

So how can you tell which penny stocks are worth pocketing? One way to decide is to have a look at what the insiders are doing. A company's management team is privy to a good deal more likely than the average investor, so if they're snapping up their own stock, it could be a good sign of things to come.

7/4/2011 1:00:22 AM
Total Posts 1

Re: Stocks under $5 where Insiders are buying

Focus Metals is one of the most compelling exploration projects I have come across in quite some time. The potential of this company is huge at the least, considering they own a world class graphite deposit.

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