Everything you need to know about Penny Shares
Welcome to PennyShares.co.uk were you can find the latest information about investing in Penny Shares.
Trading in penny shares is one of the most exciting ways of investing money. If you are able to spot a good investment opportunity you can experience the pleasure of watching your shares rise in value from a few pence to a few pounds.
When investing in shares the idea is to buy a share at a low price and then sell it later at a higher price, thus making a profit. Good luck with your investments.
Penny Shares - Answers
What is a Bull Market?
I would like to ensure that you understand what a bull market warrants for big priced shares.
Read More about how a Bull Market affects Penny Shares.....P/E, PEG Ratio, EPS?
Not sure about some of the terminology? What is a Dividend Yield or PEG Ratio? What does Market Capitalization mean? Read More on stock terms explained...Which Markets are Penny Shares traded on?
Within the United Kingdom there are three main markets which penny shares may be traded on. Read More on UK stocks &share markets...Are Penny Shares a wise investment?
As with any type of investment, without proper preparation and forethought the entire project could fall through or turn sour.
It is absolutely vital that individual investors have the time and perseverance required to trade penny shares if they want to make the most of their investment, and to turn a profit. Read More about investing in Penny Stocks & shares...
Basic Trading Tips
Penny Shares or Penny Stocks are stocks or shares in small cap companies. They have a great appeal for speculators because of their low value and the possibility of racking up a huge gain.
Most penny shares will be companies who have been operating for a short time or have only recently become public.
The potential is enormous. But there are also huge risks. You must be prepared to lose money.
When you consider that the overwhelming majority of companies start out as penny shares before growth has turned them into successful concerns you can see the attraction.
While it is an exciting way of investing money it is fraught with danger. In general, penny shares have a thin market. A stock priced at 10p may rise 50% as a result of some good news, whereas a larger blue chip concern will not.
On the other hand, the penny share can fall far more suddenly and steeply than the larger stocks and its price at any given time may bear no relation to the stock's underlying value.
Basically, investing in penny shares (penny stocks) is all about sifting through the masses of shares and pin-pointing a company that, for you, shows potential.
Ideally a penny share that is worth investing in will have a net asset value per share that is higher than the share price itself, but sometimes it is worth while dipping in and out of shares when the time is right.
For example:
Recovery Shares: Companies which have seen their share price tumble significantly, but show potential for a return to the good old days. More on recovery shares..
Cyclical Shares: These rise and fall in value according to the economic climate or maybe a business cycle. Investors will ideally invest in stocks at the bottom of the cycle before the next upturn.
Defensive Shares: The opposite of cyclical shares, these are stocks that do well in times of economic depression and can be found in industries such as food and utilities, things that consumers tend not to cut back on in difficult times.
Internet Companies:
An exceptionally volatile area. Shares rise and fall rapidly in short periods of time because these companies offer little or no tangible assets to provide stability.
Biotechnology Companies:
Often fewer that 10% of these companies' profits reach development stage, but just one could send the share price rocketing.
In assessing the potential of any company, look out in particular for strong business plans and results; trading volume; a trend of improvement; and high visibility – a company which publishes regular financial reports.