How to Find the Best Penny Stocks

If you are wondering how to find the best penny stocks, a good place to start is a free stock screener.

There are many free stock screeners out there, one of my favorites is the google stock screener.

When searching for penny stocks, you need to set the stock screener to search for stocks priced less than $5. This is the SEC definition of penny stocks.

When looking at penny stocks, you should still do extensive research on them before buying. Just because a particular stock is cheap at present, doesn't in any way mean it is a bargain. Some stocks are cheap for a reason. For example if a company is likely to go bankrupt in the near future, it may be a penny stock, but it wouldn't be one you want to own.

Whether you are a technical trader, a fundamental trader or a combination of the two, your methods and strategies should still be applied to penny stocks.

Penny stocks do have a tendency to be extremely volatile, quick gains and losses can often occur. Many penny stocks do end up worthless.

Despite all this doom and gloom in regards to penny stocks, some cheap stocks do thrive and very large gains in the short to medium term.

There are some crazy penny stocks that make huge returns, the top performing penny stocks are shown in the table below:

There were many good penny stocks in 2009, but as you can see the Air Transport Services Group (ATSG) stock performed exceptionally well in 2009 making a staggering 1438.9%, wow. $1,000 invested at the beginning of 2009 would have been worth over $14,000 by the end of the year!

Where can I purchase penny stocks?

The stock broker you choose can also have a significant effect on your penny stock trading. Many brokers don't like penny stock traders and charge them outrageous trading costs to deter them. Fortunately, there are some good brokers. More information about them can be found on my penny stock brokers page.