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How to Pick and Trade Penny Stocks

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Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million.[1] They are sometimes referred to as "the slot machines of the equity market"[2] because of the risks involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow these steps.

Steps

1. Invest within your Means. Penny stocks are as risky as larger stocks if not traded wisely. Set aside sufficient savings to last three months in case the investment goes wrong.
   
2. Understand why penny stocks are considered a dangerous investment. Penny stocks are among the most volatile and most manipulated form of investment in the stock market. The companies usually have no track record of solid financial performance.[3] In addition, the stocks are often manipulated by scam artists.[3][4]
   
3. Get at least one year's experience with mid- and large-cap stocks first. You should become adept at reading a balance sheet, income statement, and cash flow statement during this time.[1]
   
4. Learn more about the specific aspects of penny stocks that make them both potentially lucrative and dangerous to your portfolio. Understand the mechanics behind money flow, market capitalization, and share structure. Also understand the purpose of a public company and the commonality of scams, dilution, and loss of investment value associated with penny stocks.
   
5. Know which stocks to reject off the bat:[1]
   
   • stocks that aren't traded on one of the major U.S. exchanges (aka bulletin board or over-the-counter [OTC] stocks)
     
   • companies that have less than $10 million in revenue annually
     
   • any company recommended in e-mails about penny stock trading (promoters are often paid to create hype so that the shares will sell)
     
   • companies in industries that you don't like or understand well (based on your experience)
     
6. Look for "Red Flags" - Common attributes of companies running a scam or operating for the sole purpose of raising money via stock dilution.[5]
   
7. Look for companies that have consistently generated cash and are growing their free cash flow over time.[1] Avoid companies with a heavy debt load.[2]
   
8. Instead of share prices, compare price per share against book value per share (assets minus liabilities).[2]
   
9. Buy companies at a very low multiple on their cash flow (ideally under six times).[1]
   
10. Limit any tiny stock to no more than 5% of your portfolio.[1]
    
11. Trading is not a hobby, its a business. That means understanding and managing your profit and loss. Once this thought pattern is established, it makes the whole process so much easier. Simply ask, "Will this investment / trade / software / subscription make or lose me money?" Once an answer has been established, a clear course of action will present itself.
    
12. Get some great investment management software. These days, a speedy internet connection and good money management and investment software costs virtually nothing. Why spend the time and effort trying to figure out the best ways to do things when solutions already exist. Ideally, look to purchase two types of software. One will be for personal money management. This can be used for profit and loss and keeping track of the costs of subscriptions, stockbrokers and the like. The other will be used for tracking stock and fund prices, storing company news, technical and fundamental analysis and more.
    
13. Get an education. Warren Buffett has suggested in the past that every investor should be able to understand basic accountancy principles, an annual report and stock market history. You probably do not need to become an accountant, but being able to understand the scoring system of the game can only help.
    
14. Learn about money management. Every investor will have the occasional (at best) loser and it is vital that no individual trade can wipe out a portfolio. Understanding asset allocation is vital.
    
15. Read widely. Getting a wide-ranging education in personal finance, corporate finance, taxation, economics and investment theories will help. However, finding areas of the world or business in which you can become relatively expert can help in the process of finding good trades.
    
16. Find a good penny stock service to subscribe to. Many of the suggestions above can now be covered by joining a trade advisory service. These services now aim to pick stocks, offer trading and portfolio management software and educational services too. If things go well, then by investing in the stock market picks, the service can be paid for with profits. Though these services are often not 'cheap' they are generally very valuable and can help to make an investor or trader profitable whilst learning the ropes. This is a great way to learn or experience the stock market for beginners.
    
17. Know when to Quit. Setting a time to sell your stocks is important because it can change the course of your investments. Capping at 50% profits is already a good margin. Getting greedy and expecting further profits can make stocks wipe out the investments.
    

Video

The classic chart of a pump and dump in the penny stock world. Watch and learn to identify this chart.

Warnings

• Be very careful in starting out with stocks trading near $1 or lower as these are the most often abused and over-hyped investments in the stock market today.
  
• Be aware that a very low-priced stock may be more susceptible to overvaluation--being really worth not pennies per share that it is trading for, but virtually nothing--because, like a lottery ticket, some people are willing to pay (or irrationally convince themselves that they are not paying) considerably more than the mathematical expected value[6] for a remote chance of making a great deal of money.
  

Related wikiHows

• How to Invest in Stocks
  
• How to Track Stocks
  
• How to Build a Diversified Portfolio
  
• How to Invest Small Amounts of Money Wisely
  
• How to Pick Stocks Wisely
  

Sources and Citations

1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 http://www.fool.com/foolish8/2001/foolish8011119.htm
2. ↑ 2.0 2.1 2.2 http://www.time.com/time/magazine/article/0,9171,1003011,00.html
3. ↑ 3.0 3.1 http://www.fool.com/investing/brokerage/2006/12/13/penny-stocks-anyone.aspx?source=isesitlnk0000001&mrr=0.33
4. ↑ http://www.kiplinger.com/columns/picks/archive/2007/pick0911.htm
5. ↑ http://www.thethirddimension.net/stocks/pennystockredflagchecklist.html
6. ↑ http://en.wikipedia.org/wiki/Expected_value

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The Boeing 787 Dreamliner is a long-range, mid-size wide-body, twin-engine jet airliner developed by Boeing Commercial Airplanes. It seats 210 to 290 passengers, depending on the variant. Boeing states that it is the company's most fuel-efficient airliner and the world's first major airliner to use composite materials for most of its construction. The 787 consumes 20% less fuel than the similarly-sized Boeing 767. Some of its distinguishing features include a four-panel windshield, noise-reducing chevrons on its engine nacelles, and a smoother nose contour.

The aircraft's initial designation was 7E7, prior to its renaming in January 2005. The first 787 was unveiled in a roll-out ceremony on July 8, 2007, at Boeing's Everett assembly factory, by which time it had become the fastest-selling wide-body airliner in history with 677 orders. By June 2011, 827 Boeing 787s had been ordered by 59 customers, with ILFC having the largest number on order.

The 787 development and production has involved a large-scale collaboration with numerous suppliers around the globe. Final assembly is at the Boeing Everett Factory in Everett, Washington. Aircraft will also be assembled at a new factory in North Charleston, South Carolina. Both sites will deliver 787s to airline customers. Originally planned to enter service in May 2008, the project has suffered from repeated delays and is now more than three years behind schedule. The airliner's maiden flight took place on December 15, 2009, and completed flight testing in mid-2011. Final Federal Aviation Administration and European Aviation Safety Agency certification was received in late August 2011 and the first model was delivered in late September 2011

The 787-8 is designed to seat 234 passengers in a three-class setup, 240 in two-class domestic configuration, and 296 passengers in a high-density economy arrangement. Seat rows can be arranged in four to six abreast in first or business (e.g., 1–2–1, 2–2–2), with eight or nine abreast in economy (e.g., 3–2–3, 2–4–2, 3–3–3). Typical seat room ranges from 46 to 61 in (120 to 150 cm) pitch in first, 36 to 39 in (91 to 99 cm) in business, and 32 to 34 in (81 to 86 cm) in economy.

Cabin interior width is approximately 18 feet (547 cm) at armrest, 1 inch (2.5 cm) over what was originally planned, and 15 in (38 cm) greater than that of the Airbus A330 and A340, while 5 in (13 cm) less than the A350 and 16 in (41 cm) less than the 777.[181] In an industry where economy seats range from 16.3 in (41 cm) to 20.6 in (52 cm) in width; 787 economy seats are 17.18 in (43.55 cm) and 18.5 in (47 cm) wide in nine- and eight-abreast arrangements, respectively. Most airlines are expected to select the 3–3–3 maximum passenger density configuration. Boeing engineers designed the 787 interior to better accommodate persons with mobility, sensory, and cognitive disabilities. For example, a 56-inch (142 cm) by 57-inch (145 cm) convertible lavatory includes a movable center wall that allows two separate lavatories to become one large, wheelchair-accessible facility.

The Beechcraft 55 / 56 / 58 Baron is a twin-engined four-to-six-seat light touring aircraft with retractable landing gear produced by the US-American manufacturer Beech Aircraft Corporation, today Hawker Beechcraft Corporation.

Crew 1
Passengers max. 5

Propulsion 2 Piston Engines
Engine Model Continental TSIO-520-WB
Engine Power (each) 242 kW 325 hp

Speed 483 km/h 261 kts
300 mph
Service Ceiling 7.620 m 25.000 ft
Range 2.276 km 1.229 NM
1.414 mi.

Empty Weight 1.822 kg 4.017 lbs
max. Takeoff Weight 2.812 kg 6.200 lbs

Wing Span 11,53 m 37,8 ft
Wing Area 18,5 m² 199 ft²
Length 9,09 m 29,8 ft
Height 2,79 m 9,2 ft

First Flight 29.02.1960
Production Status in production
Developed from Beech 95 Travel Air

FAA TCDS 3A16

Data for (Version) Beech 58P Baron
Remarks
The Beech Baron is a development of the Beech 95 Travel Air which itself is a development of the single-engine Beech Bonanza. Beech Baron Models 55 & 56 have total length of 8,53m (27ft 11in). The current production model is the Beechcraft Baron

The PA-32 series began life as the Cherokee Six, a significantly modified six seat development of the PA-28 Cherokee series.


While similar in configuration to the Cherokee, the Cherokee Six differed in a number of major areas. Two of the big differences were implied in its name, a six cylinder O-540 or IO-540 powerplant, and the six seat configuration. While the wing was based on the Cherokee's, the fuselage was substantially larger, with strengthened undercarriage and a larger tail.
Powerplants

PA-32RT-300 Lance II - One 225kW (300hp) Lycoming IO-540-K1G5 fuel injected flat six piston engine driving a two blade c/s propeller.
PA-32R-301 Saratoga SP & II HP - One 225kW (300hp) Textron Lycoming IO-540-K1G5D driving a three blade c/s prop.
PA-32-301T Saratoga II TC - One 225kW (300hp) turbocharged Textron Lycoming TIO-540-AH1A driving a three blade constant speed prop.

Performance

PA-32RT-300 - Max speed 306km/h (165kt), max cruising speed 293km/h (158kt), long range cruising speed 258km/h (139kt). Initial rate of climb 1000ft/min. Service ceiling 14,600ft. Max range with reserves 1600km (865nm).
PA-32R-301 - Max speed 314km/h (170kt), normal cruising speed 302km/h (163kt). Max initial rate of climb 1116ft/min. Service ceiling 15,590ft. Range at normal cruising speed with reserves 1370km (740nm).
PA-32R-301T - Max speed 346km/h (187kt), cruising speed at 10,000ft 324 km/h (175kt), at 15,000ft 343km/h (185kt). Max certificated ceiling 20,000ft. Range at long range cruise power and 10,000ft 1756km (948nm).

Weights

PA-32RT-300 - Empty 912kg (2011lb), max takeoff 1633kg (3600lb).
PA-32R-301 - Empty equipped 1072kg (2364lb), max takeoff 1633kg (3600lb).
PA-32R-301T - Empty equipped 1118kg (2465lb), max takeoff 1633kg (3600lb).

Dimensions

PA-32RT-300 - Wing span 9.99m (32ft 10in), length 8.44m (27ft 9in), height 2.90m (9ft 6in). Wing area 16.2m2 (174.5sq ft).
PA-32R-301T - Wing span 11.02m (36ft 2in), length 8.23m (27ft 0in), height 2.59m (8ft 6in). Wing area 16.6m2 (178.3sq ft).

Capacity

Standard seating for six, some with an optional seventh seat.

Production

By the end of 2004, 7842 PA-32s of all versions have been built, including 4420 PA-32s and 3422 PA-32Rs.

Description:
The Cessna 208B Caravan is manufactured by the Cessna Aircraft Company in Wichita, Kansas, USA. Incorporated in 1911, the Cessna Aircraft Company has a legacy of aircraft production spanning almost a century. At the end of 1995 Cessna had produced a total of 178,394 aircraft.

The Caravan was designed at the outset to be simple, rugged and reliable. The first prototype Caravan flew in 1982. Full production commenced in 1985. The principle user of the Caravan is Federal Express, who utilise the aircraft for overnight parcel delivery. In this application the aircraft is operated at night and frequently in poor weather. It's incredible 99.8% dispatch rate is a testament to the success of the design. In 1986, at the request of Federal Express, a stretched version of the Cessna Caravan, the Cessna Grand Caravan was put into production.

For Wilderness Air, the Caravan has proven to be the best passenger carrying bush aircraft in our fleet for sectors of from 20 to 300 km. Though it is still comfortable and is on occasion used on sectors up to 1000km. The aircraft is capable of taking off from nearly all bush airstrips we service. This is made possible by its large wheels, a very efficient wing and powerful engine. Its wide spacious air conditioned cabin, large windows and unrestricted view, made possible by a high wing make the Caravan very popular with all our passengers. The 4-door cargo pod located under the fuselage also gives the aircraft a very generous luggage carrying capacity.

Specifications:
ENGINE TYPE:
Single engine turbine


PRESSURISED CABIN:
No

CRUISING ALTITUDE:
12 000ft

DEMURRAGE:
650km/day

PAX:
12 passenger seats - maximum

SPEED:
260km/h

CREW:
1

PERFORMANCE:
The Caravan is not pressurised. It therefore operates at a maximum altitude of 12,000ft when carrying passengers. Typically on a 30 minute sector the plane will be flown at 6,500ft.

Bedrooms
3
Master bedroom with spectacular sea views.

Bathrooms
2
Main en suite.

Lounge
1
Open plan, with access onto covered patio.

Dining room
1
Open plan.

Bar
1
Fitted.

Kitchen
1
Well appointed and modern.

Balcony
1
Covered, sea views.

Pool
1
Within private garden.

Sunroom
1
Exceptionally spacious off pool.

Garage
3
Double with extra height clearance, separate single.

Workshop
1





Description: This exceptional home has an elevated view of the Indian

Ocean, whilst being right on the surf's edge and at the mouth of a pristine

river estuary.

The cluster development of "Le Shac" comprises 42 very up-market units

that seldom come on the market and get snapped up due to the ideal location,

exclusivity of the immaculate secure complex and the proximity to

the powdery sands and surf.

The entire complex is kept to the same exacting standards as this unit.

Internal roads of the complex are neatly paved and the perimeter is

secure with remote access gate, walls and electric strands.

A couple of features of the complex include direct beach access and a

communal clubhouse where owners gather for a casual social life.

Stroll through the photo spread below to appreciate the truly breathtaking

views of a long stretch of unspoilt sands while being a mere 2km from the

business hub of the South Coast, the Shelly Centre and the new South Coast Mall.

As can be seen in the photo gallery this unit is a duplex with the entire living

quarters on the upper level, with the pool on the elevated landscaped rear

section.

The lower level of the unit comprises entrance hall, double garage, workshop

and single garage. These garages have direct access into the unit.

Another feature of the double garages are the remote doors with extra height

clearance. This is ideal for a caravan or microbus.

On the way up to the living level the entrance hall plays host to a storage area,

which would be ideal as a wine cellar.

The open plan living rooms of lounge, dining room, bar and well appointed kitchen

all lead out on the ocean side of the unit to a deep all weather covered balcony.

The sea views from this vantage point are spectacular.

In addition, the living rooms have the same large sliding glass doors that lead out onto

the private pool and enclosed garden on the west side.

An absolute bonus is the large sun room alongside the pool. This sun room is spacious

enough to hold a decent sized party, or be set up as a games and rumpus room.

Sleeping quarters comprise 3 bedrooms and two bathrooms, the main bathroom

being en suite.

The master bedroom enjoys the same sea views as the living rooms, and has sliding

door access onto the deep all weather covered patio.

Being a freehold unit this property comes without the usual restrictions placed on

owners by body corporate management. A minimal levy of R280.00 per month is

payable for the general upkeep of the complex.

Aimed at the discerning buyer this up-market complex is situated in the fastest

growing suburb on the South Coast, whilst still offering a short stroll onto the

powdery sands on a long sweep of beach.

Absolutely irresistible !!!!!

















Le Shac

Number 21

Shelly Beach.

PRICE: R2,850,000.
OWNERS: Alwin & Brenda Hohls

Tel: (039) 315 5775

Cel: 083 293 4788

Cel: 083 309 3344

e mail: abhohls@mweb.co.za