Crucial Criteria Found in Great Penny Stocks

When you find a penny stock that exhibits the following characteristics, you may have uncovered an investment that will grow in value for the coming months and years:

• Growing market share in an expanding market.

• The shares represent compelling value at current levels compared to other stocks in their peer group when based on financial valuation ratios, such as price-to-earnings or price-to-sales.

• Approaching profitability through a combination of growing revenues and expense reductions.

• A management team that has had great successes with previous businesses.

• Solid intellectual property (patents, trademarks, and copyrights) that ensures survival against the much bigger players in the space.

• High product acceptance among customers, which results in very low customer attrition.

• Effective marketing, which is not only profitable but also accentuates the brand.

• Indications, through technical analysis, of higher near-term prices based on money flows, share price momentum, and buying indicators such as moving averages.