Penny Stocks For Dummies
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Pay attention to as many media outlets as you can as you perform your research on penny stock companies. Often you can find reliable articles discussing the specific penny stock you're interested in, while other times you'll find information that gives you a better understanding of the underlying industry, the company's competitors, or important shifts in social trends.

For example, if you're watching a penny stock involved in the photography market, read trade publications about the photography industry and look for mentions of the company's name, products, or stock. Check out local publications (where the business is based) as well as major mainstream and financial media.

Because penny stocks are such tiny companies, getting the right kind of media coverage can drive their prices dramatically higher. If a major news network highlights a penny stock company's product, for example, sales can quintuple overnight, while a feature on home security systems or spas for pets, for example, can lift all stocks in the sector higher — including that obscure unknown penny stock that you've been watching.

Keep in mind that media generally has much less impact than many people think. Being interviewed by a big newspaper, or having a six-minute segment on a popular morning show, doesn't translate into a winning penny stock pick. While it certainly can help, it is usually not enough on its own to drive a company forward.

When it comes to penny stocks, not all media coverage is a good thing. Poor product reviews, a glowing highlight of the competition, or even a major (yet completely unrelated) event that takes over most of the media's focus and coverage can negatively impact a stock's value.

Media coverage can be one of the most important avenues for finding and researching potential investments. Combine what you glean from media outlets with the rest of your due diligence practices for the greatest effect.

About This Article

This article is from the book:

About the book author:

Peter Leeds, also known as The Penny Stock Professional, is the publisher of Peter Leeds Penny Stocks, a popular financial publication with over 50,000 subscribers. He is also the author of Invest in Penny Stocks.

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