How To Find Good Penny Stocks To Buy Right Now

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Penny Stock Research
How To Find Good Penny Stocks To Buy Right Now
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• Hi, My name is Aaron and Im with Penny Stock
  Research, today were reviewing our recently
  published article

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• How To Find Good Penny Stocks To Buy Right Now

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• Whats the best way to find penny stocks to buy
  right now? First, focus on the fundamentals.
  Discipline yourself to ignore all the
  intoxicating tales of profits just around the
  corner spun by pump and dump promoters.

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• What kind of fundamentals? Start with the ability
  of the company to make money. If you dont think
  that can happen, why bother? And why not deal
  with the here and now? Lets look at whats going
  on with the company today.

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• If management is talking about profits in the
  future, when does the future arrive? And what
  has to happen for profits to hit the books? What
  has to be sold? Has the product been produced?

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• If not, how come? Does it need any kind of
  regulatory approval? Look at the income
  statement. See if the company is actually selling
  something and bringing in revenue.

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• Dig a little deeper on this and see how the
  revenue is being reported. Heres what I mean.
  Lets say your penny stock company sells a widget
  for 24,000. And it reports all of this 24,000
  as income for the current quarter.

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• But whoever bought the widget has negotiated
  payment terms of half up front and the remaining
  12,000 spread out over the next two quarters.
  This can make a difference. It hits cash flow.
  Heres something else to look at.

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• Good Penny Stocks Have Reliable Revenue

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• See where the revenue is actually coming from.
  If your company reports 1.5 million in revenue
  for the most recent quarter, and 1.2 million
  came from selling off some excess inventory to a
  wholesaler, thats not good.

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• Or maybe the income the company reports is from a
  one-time legal settlement. The companys CEO
  comes out and crows about Income is up 134 this
  quarter. But theres no mention of the one-time
  legal settlement.

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• This detailed information will usually be buried
  in a document like an 8-K. This is a document
  the company files with the Securities and
  Exchange Commission, the SEC. These docs arent
  very exciting, but they can sure be illuminating.
  

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• The disclosures, exhibits and financial
  statements are where youll find piles of dirty
  laundry. But youll also find the good news.

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• And because so many penny stocks are completely
  ignored by analysts, and fly under the radar,
  this is where you can find out about
  opportunities before most other investors have a
  clue.

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• So when you find solid revenue, real money coming
  in, you just might have one of the good penny
  stocks to buy right now. But dont limit your
  sleuthing to the income statement. Take a look at
  the balance sheet.

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• Good Penny Stocks Have Clean Balance Sheets

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• Start off by looking at assets. Actual assets,
  not goodwill. Youd be amazed at how many of the
  pump and dump penny stocks dont have any assets
  showing up on the balance sheet.

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• Actually, youd be surprised at how many pump and
  dump stocks dont even have a balance sheet. If
  they arent traded on an exchange, they dont
  have to file one with the SEC.

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• See if the value of the firms assets is growing,
  shrinking, or staying the same. Look at how much
  the company owes. Is it long-term or short debt?

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• Based on how much money it spends, does it have
  enough money in the bank to stay in business? Has
  it been refinancing existing loans? This is
  never a good sign.

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• If the company is struggling to stay afloat, and
  borrowing more money at higher rates, why should
  you invest in it? You always want to make sure
  youre buying penny stocks in resilient
  companies...not companies that spew out endless
  promises.

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• To protect yourself, commit to mastering the
  blocking and tackling skills. Some simple
  fundamentals of due diligence can keep you safe.
  Want to see how this process plays out?

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• Lets take a look at a penny stock so you can do
  this for yourself.

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• Good Penny Stocks Have Multiple Income Streams

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• Multiple income streams means money comes in
  through more than one door. The company doesnt
  bet the farm on one product. Heres one that did,
  and look at whats been happening. Macrocure Ltd.
  MCUR trades on the NASDAQ.

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• Its a biotech stock, and in the spirit of full
  disclosure, Ive got to tell you that the
  biotechs arent very appealing to me. Im the
  first to admit I dont understand the biotech
  business. The science takes a better mind than
  mine to grasp.

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• Being able to carve out the winners from the
  losers is a challenge even for an expert who
  lives in the biotech world. Some penny stock
  traders say that biotech stocks are like lottery
  tickets. I cant disagree.

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• One other strike against Macrocure - its not an
  American company. Its based in Israel. You
  usually get better financial data and stronger
  disclosure when you invest in a U.S.-based firm.

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• So when we look at Macrocure, lets just look at
  it as a business so we can learn from the
  numbers.

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• The day I checked it out, Macrocure had a market
  cap of 22.06 million and the stock traded at
  1.32. Heres how the stock has been doing...

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• Ugly, isnt it? So right off the bat, before I
  slog through the income statement and the balance
  sheet, Ill let my curiosity get the best of me
  and try to find out what happened to send the
  stock into a tailspin in August.

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• August 19th the stock opened at 12.60. The next
  day, it closed at 2.98.
• Sometimes, all you can say is, Wow.
• Eight days later, the following headline showed
  up on Reuters.

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• Macrocure's lead drug fails late-stage study.
  Why did the stock swoon eight days before this
  information became public? Who knew what and when
  did they know it? Youve got to wonder.
• Do you see all the warning signs?

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• Can you find a single good reason to invest in
  this beat-up biotech penny stock?

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• The Bloodied Penny Stock Balance Sheet

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• When you look at a balance sheet, which you can
  find on any of the finance sites, go to the line
  that reports Retained Earnings. Retained earnings
  mean whats left over from money thats been made
  after dividends have been paid.

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• Its the money the company invests back into the
  business, or to pay down debt. At Macrocure,
  there arent any retained earnings. Only losses.
  And the losses are steamrolling. Money is flying
  out the door.

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• In 2014 losses hit 68.2 million. In 2013, they
  were 47.7 million, and in 2012, 24.4 million.
  Not exactly an encouraging trend. Have you seen
  enough?

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• Do you see how spending just a few seconds
  glancing at a balance sheet can arm you with
  essential information? If you want to find the
  best penny stocks to buy right now, find a
  balance sheet thats in decent shape.

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• Take a look at how much money is in the bank. Is
  there enough cash on hand for the company to stay
  afloat while it waits for revenues to come in? Is
  there a long-term pile of cash tucked away? Are
  there any real assets?

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• You can always depend on the balance sheet to
  shed important light on the company. Unless
  executives are playing fast and loose with the
  facts, youll know where things stand. How do
  things stand with your penny stocks?

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• Are you turning up some interesting opportunitie?
  It would be great to hear from you. And if you
  have a question about a stock or investment idea,
  shoot us an email. You can also leave us a
  comment on the website.

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