Penny stock picks aren't easy to come by, since these stocks are
by nature small cap companies with little coverage. These penny
stocks also tend to see red hot volatility, since stock prices can
move dramatically even on low volume. But the risks associated with
penny stocks and small cap stock trading strategies also come with
some really thrilling rewards - such as the ability for a single
penny stock to deliver 50%, 75% or even 100% profits in just a
matter of weeks! To help you get your share with a penny stock
investment strategy, I've made a list of 12 hot penny stocks to buy
this week - including investment in
Sirius XM Radio Inc.
Vonage Holdings Corp
Tower Semiconductor Ltd.
Joe's Jeans Inc.
), just to name a few.
I always place a high priority on a stock's fundamental
strength. That is, how it has performed in previous earnings
reports and how profit and sales forecasts look going forward.
These are concrete numbers that let you know in black and white how
a stock pick will perform. But penny stocks often aren't covered by
analysts on Wall Street so there are no earnings estimates to beat,
and very little stock news coverage. That means a hot penny stock
must be identified by other means. This can be difficult and a bit
of work, depending on your investment strategy, but if done
properly it can really pay off.
6 Rules of Penny Stock Trading
One thing to look at to identify hot penny stocks to buy is a
company's sector. Chances are if the industry is booming, that this
hot stock has a better chance to be lifted as well. Right now my
trading strategies favor healthcare, telecom and technology the
most. That's not to say you can't find a penny stock outside these
sectors, but these are the best place to start.
Next, I look at buying pressure behind a penny stock - also
known as quantitative pressure, or "quant." Since penny stocks can
be volatile and gap up dramatically on low volume, you want to make
sure the buying pressure is there to support your purchase. In the
absence of any buyers, a penny stock can spiral downward in a hurry
since there is no quantitative pressure to support stock prices.
It's simple supply in demand - you want a penny stock with high
quant because that signifies more people are buying than
Lastly, I look at a stock's fundamentals. Normally I do this
first, but as I said it can be tricky for penny stocks since they
by nature have smaller sales and profits as a small cap stock and
because analyst coverage can be sparse. You also have to have a
little perspective when looking at penny stock fundamentals, since
these investments are often startups on the verge of big success -
even if they are not wildly profitable right now.
), for example. The stock hasn't turned a profit in the last fiscal
year, and that scares off many penny stock investors. However, SIRI
stock is up 70% year-to-date, a sure sign this penny stock has
buying pressure! Also, Sirius XM has narrowed its quarterly loss
for the last three consecutive earnings reports, and has seen a
number of positive earnings revisions to its next report. Sirius
appears to be on the resurgence, and that means SIRI stock is one
of my favorite hot penny stocks to buy now.
Media Stock Upgrades, Downgrades - SIRI, SNI,
TWX, TV, CVC, BSY, IPG, MORN
Vonage Holdings Corp
) shares the same attributes of Sirius XM in many respects. Like
SIRI stock, VG stock is up dramatically since January 1 - almost
35% as of today's open, compared with a small decline for the
broader market.. Vonage Holdings also has improved its quarterly
earnings in each of the last four consecutive reports - and though
there are only two Wall Street analysts covering the stock, it's
worth noting that Vonage has blown away estimates by as much as
200% in recent quarters.
You get the idea, and hopefully you can understand why I think
these are great penny stocks to buy now. So without any further
ado, here's the list of my 12 favorite penny stocks as of this
week. Each penny stock trades for less than $2, and with the
exception of Sirius XM has a market cap of under $400 million.
Market Cap (
AEZS AEterna Zentaris Inc. Biotechnology $111.0 B - Buy AIS Antares
Pharma Inc. Health Care Equipment $124.3 A - Strong Buy ACLS
Axcelis Technologies Inc. Semiconductors $201.9 B - Buy IMOS
ChipMOS Technologies Semiconductors $137.4 A - Strong Buy CRXX
CombinatoRx Inc. Biotechnology $130.6 B - Buy ICOG ICO Global
Communications Holdings Wireless Telecom $310.7 A - Strong Buy JOEZ
Joe's Jeans Inc. Textiles and Apparel $119.4 A - Strong Buy LTS
Ladenburg Thalmann Financial Services Capital Markets $218.3 B -
Buy QMM Quaterra Resources Inc. Metals & Mining $141.6 B - Buy
SIRI Sirius XM Radio Inc. Media $4,001.8 A - Strong Buy TSEM Tower
Semiconductor Ltd. Semiconductors $230.4 A - Strong Buy VG Vonage
Holdings Corp. Telecom Services $373.8 B - Buy
One final note: Remember that you should research each
independently before buying to make sure it meets up with your
trading strategies, and please use limit orders before purchasing
any of these penny stocks. As I have said before, shares can gap up
on low volume so you want to protect yourself from overpaying for
these penny stocks. And whatever your investment strategy is, keep
in mind that while penny stocks can deliver big returns they also
come with big risk.
As of this writing, Louis Navellier did not own a position in
any of these penny stock picks in either personal or client
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