What Is a Penny Stock?​

A penny stock typically refers to the stock of a small company that trades for less than $5 per share. Though some penny stocks trade on large exchanges such as the New York Stock Exchange (NYSE), most trade via over-the-counter (OTC) transactions through the electronic OTC Bulletin Board (OTCBB) or through the privately-owned OTC Markets Group. There is no trading floor for OTC transactions. Quotations are also all done electronically.
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Penny stocks offer the best ability to multiply wealth when methodically studied and intelligently invested in. I am happy to present stocks here that I learn about from my sources with the hopes that others will do the same too. Success stories (and failures) are encouraged.

The key with this thread is that it shouldn't be used to push penny stocks available only on OTC markets. Penny stocks available on the major stock exchanges are what I feel will be valuable for group discussion.

You are responsible for doing your own research before you buy a stock.
To not do so is blind gambling, which I think is against forum rules.

This article was also valuable: https://www.investopedia.com/investing/the-dirt-on-delisted-stocks/
 
First stock I'd like to recommend examining further: Sernova (TSX-V: SVA) (OTC:SEOVF)

In one month, it went from 0.98 USD to 1.67 USD. It is currently trading at 1.25 USD. We see Ichimoku Clouds when we examine investments over a longer period, suggesting continued growth over time.

Here is the article I used for reference: https://www.equedia.com/another-look-at-sernovas-stock-chart/

Had one invested on January 29th when the article was released, gains as high as 67% could have been realized. Holding and selling now would result in gains of 25%, all within a period of one month. However, the stock currently seems like a good buy, though you may need to be patient in holding it.

I will continue to share stock info as I receive it and as time allows me to. Please feel welcome to contribute.
 
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Next stock I'd like to recommend keeping an eye on: Titan Mining (TSX:TI)

In one month, it has had a range of 0.60 CAD to 0.79 CAD, presently sitting at 0.75 CAD. Over a 5 year period, it has peaked at 1.50 CAD multiple times. I foresee it going up again in the long term, so it seems like a viable stock for small gains. However, I feel like a dip may come first; differing opinions are welcome.

Here is the article I used for reference: https://www.equedia.com/titan-mining-testing-a-key-break-out-level/

The stock currently seems like one worth keeping an eye on, though I am presently not inclined to buy it at current market value.

(Kindly note that 1 USD = 1.25 CAD, and 1 CAD = 0.80 USD at present)
 

rainy

Kingfisher
I enjoy the chase on the OTC. And I think if done right there's not all that much risk. And never spend what you can't lose. But in my experience when you're going in on basement level entry prices, the price can't really fall out from under you. It may not run but even in losses I'm selling for 70%+ of my cost basis. If I buy 500K shares at .0008 for $400 and ultimately sell for $300, I don't really care. If that stock hit just .01 that's 5K value. Then 5K for each additional penny. A nickel I get 50K. So just one hit more than offsets multiple losses. I have had hits but I'm not here to discuss those numbers. I don't want anyone chasing without being confident in their own DD.

Some of what I'm currently holding:

HCMC
PHIL
NOHO
UBQU
EWLL
WDLF
FUTL
WRFX

We'll see what happens. My cost basis for all is under 2.5K as I bought low entry. Got HCMC at .0015. UBQU at .0006. FUTL at .0009. Etc.

Watch volume. Watch the ask. Watch the orders. Watch the hype. Identify the catalysts. Do your DD. Understand a stock like PHIL is being held down by the MM's right now and its true valuation is higher. And on filings it runs.

PHIL went from .006 to .002. But the DD says there's massive news around the corner. So even though I bought higher than usual I'm loading up right now as I think this is a .10-.25 stock in months with good news and potentially dollars one year plus.

I can't stress enough to do your DD. But in the end the OTC is gambling on speculation. You're getting in before the run.
 
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Meraki

Sparrow
@rainy what software do you use? On Active Trader Pro I am still unable to see some of the Level 2 orders for a few of these penny stocks, so I just place buys according to the chart, then ignore.

That strategy of look for a boring chart that has bottomed out has helped my biggest winners over the years to grow my account. I did it with PTN, HTBX, MARA, (years ago), PLRTF, XXII and others. Problem is, just holding HTBX or MARA would've been the best move LOL
 

Meraki

Sparrow
@rainy @bioengineer

Interesting... PHIL & UBQU seem to be mirroring each other’s charts. Clinging just on to the moving average and looks like a great spot for the entry today or tmr.

So... I did the math... it’s about $400 for 500k shares. Is your game plan to just hold it up to a penny like the previous high then bounce out?
 

rainy

Kingfisher
PHIL CEO is having a conference call this coming Fri. Filings incoming.

This could run on that news.


For PHIL I hold thru July at a minimum given the 20 to 1 special stock dividend in one of it's subsidiaries which might get listed on the Nasdaq.

I really find NOHO to be intriguing.


Chinese Big Pharma and crypto among other things. Dirt cheap buy in right now. Claims they have the revenue to go to the Nasdaq.

Either a helluva opportunity which will explode or a Chinese psyops.

Also slowly increasing my position in WDLF.

EvaTaotUUAIBT0h
 
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C-Note

Hummingbird
Gold Member
I really find NOHO to be intriguing.


Chinese Big Pharma and crypto among other things. Dirt cheap buy in right now. Claims they have the revenue to go to the Nasdaq.

Either a helluva opportunity which will explode or a Chinese psyops.

Also slowly increasing my position in WDLF.

EvaTaotUUAIBT0h
I'm new at investing in individual stocks, so I probably don't know what I'm talking about, but NOHO's public filings show they only have two employees. It seems to me that any company already producing good revenue would quickly start ramping up their staff to stay on top of their rapidly expanding business lines.

Compare/contrast that with WDLF, which says they have 60 employees. Keeping paychecks flowing to 60 people seems to me more indicative that some revenue is coming in, or is imminently expected.
 

C-Note

Hummingbird
Gold Member
One company to check out may be Solitario Zinc Corp (XPL)- Their financials appear to show actual revenue over several years, although not significant. They've operated at a loss over the last year or so, which I assume is one reason why their share price is so low. It's an interesting concept. They fund exploration for precious metals, then sell the rights on any finds to major mining companies in exchange for royalties or interest in the resulting ore harvests. I can understand why the would need to be a publicly-traded company in spite of having only three employees (listed) because they need the public investment to fund their hiring of contractors for the ore exploration. Their stock is trading at $1.02 today. Their website if fairly informative, although of course organized to sell their company to potential investors: https://solitarioxr.com/

One thing I've noticed in researching penny stocks is that some of the companies market themselves very robustly and professionally, while for others there is very little information out there.
 

C-Note

Hummingbird
Gold Member
When I was traveling in southern Louisiana a couple of years ago, I was eating in an independent hamburger restaurant (great burgers) and I saw a line of delivery drivers waiting to pick up their orders. I asked the bartender (I was sitting at the bar) if they were with UberEats or GrubHub and he replied that they were all with Waitr. He told me that businesses in southern Louisiana were dissatisfied with the high fees charged by Uber et al, so a local entrepreneur built Waitr and it had taken off and achieved a local monopoly.

Waitr Holdings Inc- WTRH.

Their stock price has fallen from almost $14 at the end of 2018 to $3.29 now. From what I can tell searching around, one of the reasons for their decline in market share and share price is that Zomato moved into the area and provided them some stiff competition. I checked the burger restaurant I ate at that day and found that they had switched their delivery service from Waitr to Zomato. I imagine that if Waitr is able to continue to provide good competition to Zomato, that one of the other delivery companies, if not Zomato then someone else, will eventually buy them, providing a brief boost to their share price.

I guess "buy what you know" when it comes to stocks also applies to penny stocks, so I may risk losing a few dollars on this company.
 

Nacho

Sparrow
Nice thread...in. I have a TD Ameritrade account and was thinking of easing into some trading. A few questions for the more experienced.

1. Is it a red flag when bid and ask are far apart or is that par for the course when it comes to penny stocks?

2. Do you want to buy at session open or wait for a retracement after open?

3. Is there a general rule of thumb when doing DD to stay away from a stock with too much dilution or outstanding shares? Where does gauging proper volume as a threshold come in play to make sure there is enough shares trading?

4. Do you stay away from stocks with a chart that looks like a pump and dump compared to chart with a chart that has slow curvative up with what looks like building support/volume?

5. Are stock screeners important to narrow down the stocks that are increasing above a certain percent moving/volume?

6. How vital is level 2 support if any at all in your decision making?

7. Do you always try to get in at a bottom or is it sometimes ok to join in on a move with a hot stock backed by good DD/news, even after a few days?

8. Is shorting ever a good idea?

9. Any other practical advice? Things to stay away from or to be aware of?
 

C-Note

Hummingbird
Gold Member
I think I mentioned TLSS a few days ago. I found out (by looking at their website!) that the reason their revenue and stock price crashed two years ago was because they lost their Amazon delivery contract when Amazon decided to go independent on its deliveries. So, for two years they've had to pay to maintain their infrastructure while desperately (and with definitely mixed results) looking for cargo and packages to transport. It has put them into a death spiral. I emailed the company's PR contact yesterday to ask, basically, if they think they're going to make it. At $.04 a share, if they can return to profitability that's an easy gain on this stock, but I don't know if they can. If they go bust, it's a solid example of a company that Amazon has helped destroy, although TLSS should have been more careful not to put all of their eggs in one basket.
 

C-Note

Hummingbird
Gold Member
These are the penny stocks I've invested in so far: BXRX, CTXR, PLRTF, SEOVF, XPL, WTRH. I bought around 100 shares in each one (30 in WTRH). Because the money amounts are so low, I didn't do really extensive due diligence, I just read whatever independent information there was out there, looked at their financials to see if they seemed to be serious, and looked at their websites. It's just a hunch but it seems to me that the pharmaceuticals and medical technology companies have the best chance at blowing up, and I may buy a few hundred more shares in those companies during the dips in upcoming months. Most of those companies seem to have another year or two before their drugs/technology are ready for market, so they may not pop for awhile (if they ever do). In the past, some medtech/pharm companies have had their stock explode from pennies to $300-400, before settling down. Here's to hoping that happens again.

I'm also still considering buying some rare earth mining companies in small amounts, out of sheer speculation in case they have an unexpected breakthrough. I think there is some time, however, before that could happen. They are: APAAF, REEMF, AVLNF, MKNGF, OROCF, LYSCF, and ILKAF.

During my research I found that there are some penny stock companies that make consistent, albeit low, revenues and profits, and even pay dividends on their stocks. These include ATYR, GNUS, AESE, FNGD, YPF, SANW, SNGX, BLCM, OCX, SBBP, CLSD, SRTS, GSAT, AKER, and NAVB. From what I understand, however, it may not be the best use of your money to invest in penny stocks that are paying out dividends. The reasoning is, if a company is paying dividends on its stocks, then it has basically given up using its revenue to grow and is content with its current income stream, which means their share prices are unlikely to increase much in value. At the low income these companies are making, their dividends likely aren't very much, although I didn't check.
 
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rainy

Kingfisher
I'll try to provide some DD when I have some time but I've been digging into NOHO for two weeks now and given what I've seen it is now my largest penny position. I think this could be massive. Links to Jack Ma, Alibaba, a number of popular products in China, Longpin Life Science, rolling out blockchain with Alibaba for the Chinese agro market, new digital currency Longpin UGURT, and more. NOHO which is Dragon Life Sciences owns Longpin which has an office on Wall St.


This week, after reaching a new retail cooperation with Ali, Longpin Life Science Holdings Co., Ltd. established a cooperative relationship with Ethernet. Etham will become a technology provider for the cooperation between Lumpin Holdings and Alibaba. In the future, the two sides will carry out more in-depth cooperation.


Lots of DD here.

 
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