While the story above may be hypothetical, a quick Google search proves it’s not too far from the truth for many successful penny stock traders. Just look at Josh Sason who made millions, or Tim Grittani who started with $1,500 only to turn it into a portfolio worth over $1 million. People are making a lot of cold, hard cash through the penny stocks. You can, too.
But you need good information, proper strategy and a little bit of luck on your side. That’s where we come in here at Stacked Bid. Below you’ll find everything you need to invest in the pinks sheets during 2020, including a detailed list of our ten best penny stocks to be watching out for in the coming year.
PLEASE NOTE: WE DO NOT ADVISE HOLDING THESE STOCKS FOR THE WHOLE MONTH. What we are giving you here are stocks that have a potential to make a move this upcoming month.
The 10 Best Penny Stock Picks in May 2021 are:
1. $SCON – $.2390 (Superconductor Technologies, Inc.)
Broke out of a wedge today! Watching for continuation to $.40. (Short term target)
2. $VISL – $.2850 (Vislink Technologies Inc.)
Drone stocks have been going nuts. This one actually was on NBC Nightly News so could go much higher here!
3. $SMRT – $.2898 (Stein Mart, Inc.)
If this one breaks $.3650 it can break hard up! NASDAQ extended their compliance on 4/20.
4. $APEX – $.65 (Apex Global Brands Inc.)
This is a risky one! but liking the way the chart is setting up. If this breaks $.70, we could see $1.
5. $PSV – $.66 (Hermitage Offshore Services Ltd.)
Shippers have been running lately. On watch for a swing over $1.
6. $CTRM – $.6633 (Castor Maritime Inc.)
Another shipper name here. Got hits AH on 4/27. $.72 > $.84
7. $BKYI – $.92 (BIO-key International, Inc.)
Holding for a run to $1.50.
8. $SONM – $.9256 (Sonim Technologies Inc.)
9. $SOLO – $1.02 (Electrameccanica Vehicles Corp.)
Longer swing here. Over $1.20 there’s a gap fill to $1.50!
10. $VSTM – $2.11 (Verastem Inc.)
Most risky of them all, but once this settles around $1.50, the pump can be big and QUICK.
The Risks and Rewards of Penny Stocks
Before we break down solid penny stocks to watch, we want to offer a quick disclaimer. You can make a lot of money investing in penny stocks. You can also lose a lot of cash on the pink sheets.
Penny stock trading is high risk, high reward. While you take a lot of risks, you have the potential for enormous returns. And why are there so many risks involved with penny stocks? Most agree there are three reasons penny stocks are risky.
First, there’s a lack of credible information surrounding most penny stocks. With no minimum standards for many stocks on the pink sheets and a lack of in-depth financial data, it’s rare you’ll find a company you can properly research and vet before investing.
Next, most investors quickly realize that a stock is considered a “penny stock” for a reason. Often, these companies are significantly overleveraged and on the verge of bankruptcy.
Bankruptcy leads us to our third penny stock risk – scammers. Many penny stock scammers make big bucks by luring investors into a nearly worthless stock before taking their money. You must be aware of the scams surrounding the pink sheets. Here are a few common ones:
- Pump & Dump Schemes
- Reverse Merger
- Short & Distort
- The Guru Scam
- Mining Scams
- Offshore Scams
- No Net Sales
The Definition of Penny Stocks
While there is some variation, most consider penny stocks as anything trading outside major market exchanges under $5 USD per share. Traditionally, anything under $1 USD is a penny stock.
Penny stocks are an extremely high-risk investment, and most investors consider them to be incredibly speculative. Most companies that find themselves trading on the pink sheets suffer from small capitalization, a lack of liquidity, large bid-ask spreads and limited disclosure.
These stocks do not trade on respected the major market exchanges. You won’t find penny stocks on the Nasdaq. Often, penny stocks have no SEC compliance and regulation to worry about. To say the wide world of penny stocks is the like the wild West wouldn’t be a stretch.
You can invest and trade penny stocks through the OTC Bulletin Board, also known as the OTCBB. Individual companies are also exchanged through the pink sheets, which are completely unregulated.
Get Started Today
If you’re a high-risk investor looking to see significant gains, then the penny stock markets may be right up your alley. Just remember – penny stocks will always be a big gamble. Only with proper research and strategy will you see profits with speculative plays.
While there’s a bit of doom and gloom above, there’s still a lot of money to be made through the pinks sheets. We wouldn’t have complied and created this article if we didn’t believe in penny stocks. Start slow and learn the markets before taking huge gambles that can offer huge payouts.
Things to Remember
If you’re still here, then investing in penny stocks may be right up your alley. If you’re an investor with a high tolerance for risk, then the pink sheets could be for you.
Before you make some trades, you must remember one thing: Penny stocks have a high level of volatility. Due to this fact, there’s the potential to make a lot of money and to lose a lot of money when investing in the pink sheets.
It’s vital to take certain precautions when investing in penny stocks. With precautions and a proper strategy, you can minimize losses – to a certain extent. One precaution many investors take when trading penny stocks is a stop-loss order. Before entering a trade, you have a predetermined stop-loss order that ensures you exit the market immediately if the market moves too far in one direction.
While many investors have illusions of grandeur when hitting the pink sheets for the first time, it’s important to note that realistic expectations should be managed. It can take months and years to find gains materializing in the stock market. Most investors don’t turn a few hundred into 100K in a matter of weeks.
Stocks trading on the pink sheets and the OTCBB usually have low trading volumes, which increases the risk of the investment. Any penny stock trading less than 100,000 shares a day should be avoided as you learn the market You could get stuck with shares of little to no value if you invest in a company with extremely low trading volumes.
To mitigate your risk while you start trading, you can trade penny stocks (under $5 USD a share) on the American Stock Exchange (AMEX) and the Nasdaq. These exchanges are continually regulated, which ensures you won’t be taken for too much of a ride while starting out.