Penny Stock Info from Paid Analysts - dummies

Penny Stock Info from Paid Analysts

By Peter Leeds

In some cases, a penny stock company will pay an analyst to produce detailed reports about it. While these reports can often be very professional and thorough, the fact remains that the company is paying the analyst for the review, which automatically casts a shadow of doubt on the value of the information.

The purpose of these paid analyst reports is to push the share prices higher, but instead of trying to pump up a stock through manipulation, these reports make an argument for why the shares should trade higher and that argument often has a great level of detail. As such, these reports can sometimes be useful when doing your due diligence simply because of the detailed nature of the review.

Like free newsletters, the job of paid analysis isn’t to help you invest well but rather to move the price of the penny stock higher. Remember that they will paint the company in the absolute best light and omit or ignore the downside concerns. But if you approach these paid reports with an understanding of the existing conflicts of interest, you may be able to derive some good, albeit one-sided, information from them.