| Microcaps are stocks that simply have low market | | | | slaughtered. |
| capitalization. If you do some research you will find that | | | | 3. Does the Company Have Confidence It Will Turn a |
| that stocks with low market caps have outperformed | | | | Profit? |
| the largest companies year after year. Traders know | | | | Check the company's price-to-earnings ratio. Divide the |
| that the best time to buy a company is when it's small | | | | current price per share by the earnings per share. The |
| before every Wall Street analyst has a chance to | | | | higher the number the more likely the company is to |
| promote it to the masses. Most large cap stocks go | | | | turn a profit. |
| up an average of 10% a year, while the smaller caps | | | | 4. Does the Company's Book Value Make Sense? |
| go up 33% a year! And all stocks are risky so wouldn't | | | | You want a stock whose company's market cap is |
| you rather take a risk for a bigger gain? | | | | less than their book value. A book value is the value of |
| The downside to these stocks is that it is hard to find | | | | a company based on its profits as well as the value of |
| information on them. Many times here are no listing | | | | everything it owns. The market value is what the |
| standards versus those stocks traded on the larger | | | | market claims that the company is worth. If the book |
| markets who have to meet minimum standards to | | | | value is higher than the market value, your stocks are |
| remain listed. So that does add to the risk of trading | | | | actually worth more than what you are paying for |
| micro cap stocks. | | | | them. |
| 1. What Are the Insiders Doing? | | | | 5. Does this Company Look Like the Next Nutri |
| Check to see if the insiders are buying their own stock. | | | | System or Wal Mart? |
| It just makes sense that if insiders are selling, there | | | | In any market the key thing to remember is supply and |
| might be trouble brewing. But, if insiders are buying | | | | demand. When you research your micro penny stocks |
| more of their own stock, that's a positive message | | | | look for a company that is about to become a |
| about the company's future. | | | | household name. Micro penny stocks might be small |
| 2. Are the Stocks On Sale? | | | | but they tend to have higher growth rates and higher |
| The best traders buy stocks on sale. The stock | | | | rates of return. That means that they have more |
| market is cyclical and just because a stock is down | | | | room to expand and...and become well known. |
| today doesn't mean it's not going to zoom up | | | | Yes, micros are a risky investment but if you follow |
| tomorrow. This method works whether you're | | | | these tips and choose the right one to invest in you will |
| interested in long-term or short-term trades. If you | | | | find that the reward can be huge. As an extra |
| have a good micro penny stock on your radar, don't | | | | measure of security you should also invest in a |
| be fooled by what everyone else says or seems to | | | | microcap stock newsletter service that will expand on |
| be doing. The tiniest bit of bad news can change the | | | | your research and give you the trader's edge. |
| crowds behavior. Don't be part of the herd. Sheep get | | | | |