4 Ways to Spot a Winning Penny Stock
Hi, I’m Francois Joubert.
I’m an engineer by trade, and an investor by passion. I discovered the stock market while I was still in university, and I haven’t looked back since.
My particular experience revolves around penny shares, that is, the smallest stocks listed on the stock exchange. (You may know me from TV, as the analyst behind FSP Invest’s popular Red Hot Penny Shares investment newsletter.)
It’s no secret. I love penny shares. The smallest stocks often have the biggest potential for fast growth. And it has to be said that I’ve done quite well for myself investing in this often overlooked asset class.
But, here’s the truth most market experts will never tell you: While you can make a money from investing in penny shares, most penny share investors don’t make money on their own.
The thing is, many penny shares are garbage. That’s why I don’t buy just any old penny shares. That’s a risky game. And I’m not in the game to take risks; I’m here to make money!
My technique is “systematic”. I don’t use hunches or hyped up emails. In short, I hone in on tomorrow’s big gainers with pinpoint accuracy. The secret of my success lies in what I like to call my PowA! strategy.
Using my PowA! strategy I’ve seen plenty of penny shares make investors a ton of money in a short period of time.
This same strategy helped me grow my own share portfolio eightfold in my first three years of penny share investing.
Here’s how it works:
My PowA! Penny Share Strategy
- Profits! – When I evaluate companies, it’s more than just understanding what they do and how they do it. I want to be sure they’re making money. Not just showing paper profits. Profits are possibly the most important part of my strategy, but they can also be misleading if you don’t combine them with the rest of my criteria.
- Open Communication! – It’s all about finding the Truth. I’ve seen so many great penny shares stumble because the truth is hidden. That’s why I look deep into all aspects of the company to expose any lies there might be.
- Wow Factor! – I only pick shares that stun me. There’s always a reason a share’s price shoots through the roof. I need to know why it’ll make more money tomorrow than it’s making today. We all know how earnings growth affects share price movement.
- Assets! – A company that doesn’t have the money to back its ambitions doesn’t mean much to me. That’s why I look for companies with strength in its balance sheets. I also like companies that use small amounts of assetsto produce huge profits!
So, whenever I review a company I check that it meets all of these criteria. If it does, I say buy. If it doesn’t, I keep it on my watch list – monitoring it continuously should the company’s situation change!
Applying my PowA! strategy will help you find stocks that have low risk and lots of upside. This strategy has worked for me for more than five years and I’m confident it will work for you too.
Good luck on your investing journey!
But, before I go, if you’re looking for a bit more help along your way, I’d like to invite you to join my free 30 day investing master-class, the 30 Day Penny Share Master Programme.
In this online programme I’ll cover all the basics you need to know (including how to set up a low-cost brokerage account and how to avoid the most common novice investor mistakes) to get your own investment portfolio off to a solid start.
As a part of the programme, you will also get added to my daily stock market email newsletter mailing list, MoneyMorning, so you can keep up to date with the latest investing ideas and tips, an essential part of becoming a successful investor. It’s free to join and you can opt-out at any time.
Otherwise, if you’re keen to go it alone, please enjoy browsing this website.
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