What are penny stocks and how can you buy them? Here are some commonly asked questions about penny stocks

What are penny stocks?

Penny stocks are companies that are not listed on a major exchange like the Nasdaq. Some people consider any stocks under $5 a penny stock while others consider those micro-cap stocks and won’t call a stock a penny stock unless it is trading under $1 a share. Penny stocks are usually companies that fall short of the basic requirements to up-list on a major exchange.

How can you buy penny stocks?

Some brokers actually won’t let you buy penny stocks because they believe the risks are too high and they don’t want to pay the extra fees that brokers have to pay with OTC stocks. We recommend ordering a brokerage account with Etrade. There are a lot of people starting out that like Robinhood because there are no broker fees but you are very limited with the stocks that you can buy with Robinhood. Etrade or Scottrade are much better brokers to use.

What are the top or best penny stocks to buy?

This really comes down to individual trading style. We like low float stocks because they have the potential to move the quickest. We also pay attention to what sectors are hot. A lot of times entire sectors will move at the same time. Look for hints in SEC filings. Remember most penny stocks move based on market awareness and exposure and not necessarily how solid a company is.

Where can you find a list of penny stocks?

We have several lists of different type of penny stocks listed on this site. You can click on any of the drop-down list above on the menu and find the sector you are looking for. Also, check out our penny stocks of the month page. This will give you some great information on which penny stocks are hot!

Penny Stock investing is sometimes considered one of the trickiest ventures and if a person is not careful they could end up Losing a lot of money. Some people view penny stock investing as a way of diversifying their investments. It is a very risky investment that does not require a lot of money to do.

Pointers to buyers

For beginners and rookies, it is important to find out why a stock is considered penny stock in the first place. There is usually a reason why stocks are priced so low. In most cases, the companies are not well enough established yet.

Penny stocks are high risk and high reward. You can start off with a small amount of money and if you play your cards right, you could end up making a lot of money. This is because you don’t need a lot of start-up money to begin trading. Financial advisers are keen to inform beginners not to put all their money into one bag. While these penny stocks can be a noble way of quantifying investments, there can be risks too and therefore it is advisable to split investments to be on the safe side.

How to choose a brokerage firm for penny stock investing

First and foremost, do a thorough research to ascertain that whoever you are dealing with is a legit firm. There are so many fraudsters out there targeting rookies and new investors and no one wish to begin on a wrong footing.

Take time to find a brokerage firm with a proven track record in sorting out its finances and taking care of its revenues. Transparency is paramount especially in this form of investment and if a company is not willing to be clear with information then certainly something fishy is going on. The same company must be open with its finances to make it clear for potential investors and at least to win their confidence. No one wishes to lose their hard-earned money easily.

For the sake of saving time, enquire from friends who perhaps might have had successful spells with their brokerage firms. A friend will always be handy to provide clear information without being bias. Penny stock investing can be quite appealing especially when some companies have been mentioned but the history of the company should be put under the microscope. Companies come and go and when they do, they disappear with investors money and there is nothing to be done.

Beware of hidden broker charges that may pop up later after signing all the paperwork. Your chosen broker must put everything on the table and if possible an attorney must be present to oversee any transaction or as a signatory whenever there is doubt.

Is the CPWY short squeeze coming next week?

Huge potential in Short Squeezes

One of my favorite type of swings trade are potential short squeezes. A short squeeze happens when a stock has a high amount of short interest, and increased buying pressure forces short sellers to have to buy back their shares at a higher cost. When a market maker opens up a short position that market maker is betting against the stock.

When a market maker is short they are hoping that the stock goes down. This will allow them to cover or buy back the shares they are short at a lower price and they get to keep the difference in price. If a stock continues to go up and they are forced to cover or buy back at a higher price and they will lose money on the trade.

If the stock in a thinly traded stock with a low float it may be difficult for shorts to buy back their shares. When they start competing to buy back shares and the stocks price continues to rise it creates a short squeeze. A Short squeeze can be more problematic for those who have a short position when a stock starts setting off margin calls for them and their brokers automatically start buying shares back on the ask.  Short Squeeze are very good for those who bought a stock in hopes of it going higher!

Naked shorting and penny stocks

Penny stocks are loosely regulated which opens up the door to market manipulation. One form of manipulation is where market makers will naked short a stock. When a market maker shorts a stock they borrow shares. They borrow the shares and sell them into the open market. They then promise to buy back the same amount of shares at a later time.

For example if Market Maker CDEL decided to short 100,000 shares of a stock that was trading at $1 a share they would borrow those 100,000 shares sell them at $1 a share for a cost of $100,000 plus a predetermined amount of short interest. Lets say that stock went down to .50 a share and CDEL decided to cover or buy back their short position, They would then spend $50,000 to buy back that 100,000 shares, and their profit would be $50,000 ($100,000-50,000=$50,000 profit). Now lets say the stock went up to $1.25 a share instead of falling. If the short seller CDEL had to buy back or cover at this price it would cost them $125,000 for the 100,000 shares. So they would end up losing 25k ($100,000-125,000=$25,000 loss).

Now with penny stocks market makers are extra aggressive. They will do what is called naked shorting. The SEC allows market makers to take up to 72 hours or 3 trading days to find shares to borrow. It is called a naked short because they don’t have to actually have any shares available to borrow for up to the 72 hrs. After 72 hours has past they must either buy back the shares and cover or find available shares to short.

Market makers got smart and found a loophole around covering their shares. What they would do is arrange secret agreements with other market makers. They would help cover each others short position. This allows market makers to extend well pass the original 72hrs. They can get away with this for up to 30 days before they have to cover all of their shares. They extend the time hoping the stock will fall in price before the 30 days are up.

Let’s take a look at the high short interest in CPWY.

Why I am so excited about CPWY stock is that there currently is zero diltuion and a huge amount of short interest. Over the last 15 days there has been 26,761,654 shares shorted. That’s over 26 million! and according to my calculations the majority of those shares still need to be bought back and covered. Right now market makers keep doubling down hoping they can scare out retail buyers into selling shares and they keep adding to their short position. If retail buyers hold strong and not get tricked I believe in around 15-20 days CPWY could see a massive short squeeze sending the stock price skyrocketing! The OTC has seen a few nice short squeezes lately. One was VYST which went from .0006 to .06 which was over 10,000% and another one is SHMP which was at .005 and has went over .60! I believe CPWY could be next!

The most difficult part is not falling for market maker games. They are good at what they do. They will make it look like there are huge sell offs. They will stack large sells on the ask, They will create large spreads and they do this to try to discourage people from buying and to try to trick people into selling. I have been fortunate enough to make a lot of money in stocks by noticing these Market Maker games and having the patience to avoid their tricks.

UPDATE: Is the short Squeeze coming next week?

As you can see by the short volume right around the 30th there wsas huge volume! That would make it possible for a huge short squeeze coming to CPWY in the very new future!

Disclaimer: Everything in this article is for entertainment purposes only. The author of this article has not been compensated to write about CPWY. The author of this post does own shares of CPWY and trades the stock daily and they reserve the right to buy or sell shares at any time, and his opinion should be considered bias.  The author does not have shares of VYST his initial buy was 20 million shares  of VYST at .0007-.0008 and has taken profit and sold all his shares. The Author of this article does not have shares of SHMP. This is not investment advice and the author is not a registered broker and is not an investment advisor. Ideas and opinions on this site are for entertainment purposes only. It is the readers responsibility to do their own research. Penny stocks are very risky. Please make sure you read our full disclaimer at https://awesomepennystocks.com/disclaimer/ Also please read our Trade Disclosure at https://awesomepennystocks.com/trade-disclosure/

5 Gold Stocks to Buy

Think about investing in these 5 Gold Stocks

Gold hasn’t shown its shine over the last few weeks. There was a high point seen in the month of March which consequently gave a hike to the gold-related stocks. There are a variety of factors pressurizing the gold stocks towards a higher level. The trading options and the geopolitical tensions, dollar rate fading and rising inflation rate are working in the favor of gold and the related stocks. The analysts suggest that it is the right time to buy mining stocks.

5 Gold Stocks to consider for buying are:

• Kinross Gold (KGC)

Kinross Gold was once a mighty company and got some issues in the later phases. At present, the company is recovering from the tough times and has attained a better trend to follow. The troubles of the company started in 2010 and it was the time when it bore many losses for the several mines. Kinross can reverse the impairment charges in the assets in the year 2010. There are many projects in Kinross Gold in the pipeline. It is a perfect timing to invest in a company having the scope to grow and get a break deserved by the miners. Kinross is tossed aside among the gold stocks for getting the best out of the growing gold prices.

• Yamana Gold (AUY)

Yamana Gold was among the top gold stocks during the gold boom. It fell on the hard times during recessional phase and today, the stocks are about one-fifth of the value of the previous price. AUY is the gold mining company having a scope to grow rapidly. The gold production will jump up to 18 percent over the coming three years and the rate of silver production is much higher.

The cash costs of the company are expected to reduce and the company will probably attain better margins for every ounce of the gold mined. The investors are focusing on this stock for getting the higher ROI. The company even pays off a dividend. Yamana Gold is the biggest bargain of the stocks and has a long-term chance for growth. The investors can gain higher potentials by buying at the right price.

• Goldcorp (GG)

Goldcorp was once a king of the gold stocks and hasn’t done anything great lately. The firm got a reduction in costs and the production levels dropped to the bottom. The expected profits of the firm were held back. In the year 2016, the company turned around and got an idea of increasing the gold production and reserves by 20 percent. Obviously, there will be money required by the company for boosting production and cut off the overhead costs. With the rise in the gold prices, GG will have better prospects in growing and there will be better cash flowing for the company with the higher gold prices. The turnaround of the GG will be better in the upcoming future.

• Franco-Nevada Corporation (FNV)

Franco-Nevada Corporation is a unique stock among the others. It is a gold streaming firm and not any mining company. The company provides financial strength to the other miners and it is a profitable business having a good cash flow without any risks associated with the world of real mining. In comparison to the last year, FNV has reduced about 14 percent of its previous value. This stock is perfect to invest for a better move. For the beginners, the higher gold prices will correlate to the royalties paid to FNV. The longer time win would be the decision of the company for fully funding its Cobre Panama project. This project is the largest one for the metal deposits and FNV will own 100 percent royalty to the mine’s production. The cash flow should begin growing with the cash flow maintained by the company. The present situation of FNV doesn’t reflect any gains from this project but with the growth in gold rate, the company has a good futuristic approach to rising in the future.

• VanEck Vectors Junior Gold Miners ETF (GDXJ)

Gold miners have a dependency on the price of gold at the particular time. The fixed costs of the company provide a full-on victory when there is a rise in the gold price. The key to the success of the gold-related companies is to focus on the junior mining companies. For the entry companies, there are one or two mines under the belts for the junior level companies. With the rise in price, the junior companies become more valued due to the gold amount present in their potential reserves.

VanEck Vectors Junior Gold Miners ETF is a good choice for the investors looking to own a single junior level minor. GDXJ includes 73 associated junior miners. With the use of ETF, the investors can make diversification of the risks associated with the gold stocks and attain extra control with a single ticker. ETF is bigger and includes better bets than the other holdings. It is a cheap stock choice as the expense level is 0.54%.

We all have heard many stories of the success of the people with gold stock investments. Undoubtedly, the yellow metal has a huge position in the market and the prospects of this commodity have never been low. You can use the perfect formula for research and start earning by making the wise investments. The above-mentioned stocks are just five in number but there could be endless new and old ventures leading towards a brighter prospect for this sparkling commodity. The investors who’ve bought the stocks of these companies during the declining phase are hoping to get the positive results with the increased prices of gold.

It is the right time for the investors to trust gold mining and associated companies. The growth in the price of gold will certainly make the adequate move for the investors to get better returns over their investments.

Potential Short Squeezes and Huge runners!

Last time we put out a list of our short squeeze stocks everyone on the list did very well. ULGX ran 750%, CACH ran over 600%, VCTL ran over 1,200%, MJNE ran 75%, IMTV ran 100%, and GNOW ran 500%.  The results were incredible! That is why we love low float stocks. High risk but also the potential for high reward!

Here is the list:

GNOW American CareSource Holdings, Inc.

GNOW operates under the tradenames Gonow Doctors and Medac. This stock has only 8 million shares held at the DTC and has only 16 million Outstanding shares according to OTCmarkets.com not to mention over 2.6 million of those shares are restricted!  GNOW could see a short squeeze any day now. Market Makers have bet heavily against this stock and we believe they are about to get burned.

HDII Hyper Diagnosis Inc.

HDII filed a 15-12G with the SEC about 4 years back so the information we have on them is based on their website http://www.hypertensiondiagnostics.com  There mission is to help doctors detect cardiovascular disease at an early stage with could save millions of lives in a billion dollar industry.  According to OTCmarkets.com Hdii has 52 million outstanding shares and almost 15 million of those are restricted! This is one we believe could be a nice 3-4 month runner.

SDSS- Suspect Detection Systems, Inc

Suspect Detection Systems Ltd. based out of Isreal this company focuses on Homeland Security, Military intelligence, and Law Enforcement advance technologies worldwide. According to OTCmarkets.com they have a float of only 58 million shares. This is very low considering how low the current share price is.

AXGC- Axis Energy Corporation

AXGC is in the Oil and Gas industry. We grab shares of this company based on only have 41 million Authorized shares. We believe this can be a possible short squeeze candidate in the next month

This is of low float stocks we own shares in. We consider them high risk and high reward type stocks. We don’t believe in the companies long term. We buy shares and sit and wait until there is a jump in share price. Sometimes you see a huge 2,000% runner and sometimes the stock falls. So if you are buying any of these don’t risk money you can’t afford to lose. There are blue-chip stocks that are a lot less risky. With that being said we like the excitement of a stock that has the potential to turn 5k into 100 grand.

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Three Penny Stocks to Watch in the Second Half

Penny Stocks is a perfect way of starting trade for new investors who are seeking to expand their hard earned money while staying on the safer side amid their low price per share. Penny stocks usually trade under $1 per share but some analysts consider all those stocks as penny stocks that are trading under $5 per share. Unlike large-caps that have significantly higher per share prices, penny stocks do not require large capital.

Nevertheless, investing in penny stocks and making profits from your trades require some investing experience and keen eye on the global business activities. Irresponsible risk management could result in big losses in a very shorter period of time. Once you took a position in any company with bleak future fundamentals and low liquidity position, the chance of losing money are greater than generating profits from that trade.

On the other hand, when you used the right strategy and timing of investing in any particular penny stock, the chance for wining are higher. It is also equally important for new investors and beginners to predict the exit point for penny stocks to comfortably capitalize on recent gains. Below, I’ll take a look at few penny stocks that have strong upside potential in the coming days and have had posted significant profits in the last couple of quarters.

Golden Minerals Co. (AUMN) engages in the mining of silver and gold bars, lead, precipitates zinc, and pyrite concentrates. The company’s market capitalization is standing around 74.34 million and its trading volume is around 919,125 shares.

Mining companies are always cyclical in nature and they have offer a lot of room for traders to make profits. Share price movement and financial performance of mining penny stocks are directly correlated with the commodity prices. If investor has some hold on precious metals and commodities, they can easily make profits from its investments in mining stock.

Golden Minerals share price soared nearly 365% since the start of this year, a significant price appreciation for any company and its share holders. This clearly means that if someone had invested in Golden Minerals at the beginning of this year, their initial investment have increased 365%. Falling crude oil prices, volatility in the stock market, stable interest rates and supply and demand dynamics are key drivers for significant price rally. New traders always need to look at these drivers if they are planning to invest in mining related stocks.

Despite the significant share price rally, Golden Minerals share price have further upside potential moving forward. Crude oil prices are unlikely to rebound in the near-term and global economic environment is expected to remain week, which could move investors towards safe heaven assets and mining stocks. Therefore, Keep Golden minerals at your watch list.

Sirius XM Holdings (SIRI) is among those penny stocks that have generated significant revenue and earnings growth in the last couple of years on the back of its innovative strategies. It provides satellite radio broadcasting services including free music, news and comedy, premier sports, entertainment and key events and wide range of other programs.

Five years back, Sirius XM was only trading around 1.50 per share. This penny stock surged nearly 125% in the last five years and nearly going to become a small cap-stock. Some penny stocks with strong business fundamentals have potential to turn their status as a small-cap stock from a penny stock.

The company’s future fundamentals are strong as the company has recently beaten analyst estimated for both earnings and revenue for the second quarter of this year. Its revenues surged nearly 10%, while EBITDA increased almost 13% compared with the same period of last year. With the growth in earnings, its cash generating potential has also been expanding year over year. Therefore, buying and keeping this penny stock on the watch list could result in healthy gains.

Plug Power, Inc. (PLUG) offers alternative energy technology, particularly focusing on the design and development of fuel cell systems for the industrial off-road market. Plug Powers share price declined in the last few months amid slow off-road market. However, this penny stock is presenting a perfect case of buying low and selling high. Its stock price is currently trading around $1.71 per share, significantly lower from 52-week high of 2.52 per share.

The company’s future fundamentals are strong and its share price has significant upside potential. Recently, the company has beaten analysts earnings estimate by 0.02 per share for the second quarter of this year. In addition, the company’s revenue of 37.9 million increased 59% compared with the same period of last year. New investors must add this penny stock on their watch list, as this company has substantial upside potential considering its revenue and earnings growth.

Conclusion

New investors can make big profits by investing in penny stocks by using timely and right strategies. If investors want to make profits from its trades, they need to have a keen eye on the company’s future performance and business fundamentals. Those penny stocks that have strong business models and potential to generate a sustainable growth should be on new investors watch list.

Aurora Cannabis (NYSE, TSX:ACB)

Aurora Cannabis (NYSE, TSX:ACB) is a Canadian producer and distributor of medical cannabis. In terms of market capitalisation, it is the world’s second largest cannabis company after Canopy Growth. With an ever-increasing revenue, reduced costs, and positive projected financials, Aurora’s future is that of rapid growth. ACB also ranks #1 on our Cannabis poll.

Background

Aurora Cannabis is a medical cannabis producer and distributor. It is a Canadian licensed company with authorised production and sales operations in more than 20 countries. The company is listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the ticker symbol ACB.

Aurora was initially founded in 2006 in Mountain View County, Alberta, where it established its first production facility. Later, it became the first federal government licensed cannabis-growing company of the province in 2014. In November same year, it received the license from Health Canada to grow and market medical cannabis. The company has its headquarters in Edmonton, Alberta.

It uses a business model which emphasizes vertical integration and horizontal diversification. Consequently, it continuously strives to reduce reliance on suppliers, lower costs and improve its economies of scale. Also, its operations are significant ranging from facility design and engineering, cannabis genetic research, cannabis, hemp, and derivatives production.

Therefore, it has opportunities to benefit from growth in every part of the industry’s value chain. Leveraging that, it has been able to develop an unparalleled international reach advantage. Currently, Aurora has an estimated peak production capacity of up to 700,000 kilos.

Industry Overview

Classified as a health care company, Aurora is specifically in the cannabis industry. Experts do not always agree on choices of investment. However, it seems they all agree on the immense potential of the medical cannabis industry.

The legal cannabis industry is the fastest-growing industry in the United States. The industry has two major segments: the recreational/adult use and medical markets. Analysts expect recreational use to account for approximately 67% of the growth while medical use will contribute the rest. Recreational cannabis is already legal in nine American states while medical marijuana is legal in 33.

Interestingly, the largest cannabis companies in the world are Canadian. The most contributory factor to this is the country’s cannabis-friendly stance. Ontario-based Canopy Growth, with its market capitalisation of approximately $23 billion, is clearly the largest in the industry. Tilray, Aurora, and Scotts Miracle-Gro follow it.

The Canadian companies have also been infiltrating the American cannabis industry by making substantial investments in US-based marijuana firms. They can more easily expand than their American counterparts because they face lesser regulatory hurdles and are more flush with cash. With the projected compound annual growth rate of 26.6%, perhaps, there is no other industry that matches the growth potential of the legal marijuana industry.

Aurora Cannabis: Benefitting From Massive Industry Growth

Presently, cannabis stocks are wildly popular, especially among millennial investors. After delivering $6.9 billion in global sales in 2016, the industry was able to grow this by approximately 38% in 2017. For 2018, the industry posted an estimated $12.2 billion in revenue, a figure that has been projected to rise by 38% to $16.6 billion for 2019.

In short, generally, the cannabis industry is of a good prospect. Revenue is expected to be on a consistent increase. Consequently, its companies will grow and their stocks will generate significant value for their investors. However, a cannabis company that wants to thrive must focus on key business fundamentals such as financing, product diversity and differentiation, and strategic partnerships, among others. Aurora Cannabis is doing just that.

Strategic Partnerships: The Primary Driver of Aurora’s Growth

Aurora actively seeks to expand. Its expansion strategy based on vertical integration and horizontal diversification is a sound one. Anandia Laboratories, the global industry leader in cannabis testing and research, is its wholly-owned subsidiary. Also, Agropro UAB, Europe’s largest producer and supplier of certified hemp, is another. Moreover, Aurora announced its acquisition of Farmacias Magistrales, a Mexico-based medical cannabis firm, in December 2018.

Aurora, through its policy of strategic acquisition, is also the owner of Pedanios GMBH, now Aurora Deutschland. Pedanios GMBH is Germany’s largest supplier of medical cannabis to pharmacies, with over 750 pharmacies supplied. CanvasRx, BC Northern Lights, CanniMed Therapeautics, and Borela UAB are some of the other companies Aurora has long acquired.

The latest of Aurora’s strategic partnerships, its “exclusive, multi-year, multi-millionaire, global partnership” with the Ultimate Fighting Championship (UFC) to advance cannabidiol research, came through on May 21, 2019.

Diversified Product Offering And Consumer Recognition

Aurora arguably has the most diversified product offerings in the industry. Little wonder that the brand-consumer recognition is strong, having fast outpaced its peers. Currently, the company markets its adult consumer products via the four main and active brands: Aurora, Altavie, San Rafael’71, and Woodstock.

Of course, these two factors are vital drivers of its growth, and will continue to boost its revenue in the coming years. Add to this its rapid product diversification through acquisitions, research and development, and strategic partnerships. As a result, you will conclude that Aurora’s prospect for the future is that of rapid growth.

Healthy Financials Confirm Positive Outlook

By the end of Q1 2019, Aurora Cannabis (ACB) has gained approximately 83% while the S&P 500 appreciated only by 15.5%. Over the past two years, Aurora Cannabis has appreciated by 326.4% compared to the 24.3% gained by the S&P 500 during the same period. Despite sustaining a loss in 2017, the company closed 2018 in the green.

With a market capitalisation of approximately $8 billion, Aurora (ACB) currently hovers around $8. For 2019, it has posted a YTD appreciation of approximately 70%. With a projected P/E ratio of 85.8×, its upward potential is still high, leaving room for opportunities to mount the ride.

Summary

Yes, the cannabis industry has become widely favoured. However, you should take note that regulatory restrictions in different countries can reasonably impede its growth. We believe the optimistic views of most analysts on it will pan out nevertheless.

Specifically, Aurora’s business model of vertical integration and horizontal diversification is a huge competitive advantage. It pursues aggressive growth, thereby rightly positioning itself to profit across all the segments of the value chain. Moreover, the management has shown its commitment to disciplined cost management.

Also, its production facilities, both old and new, working at peak yield will significantly ramp up manufacturing capacity. Plus, becoming EU GMP (Good Manufacturing Practices) certified will boost its European market share.

Consequently, with increased revenue, reduced costs, and positive projected financials, we expect Aurora to continue its positive run. Hence, every intelligent investor should consider a buy.