BE - About to Buy Penny Stocks? Look at These 3 Companies First
One of the lures of penny stock investing is the ability to control large numbers of shares with relatively little money. And if stocks that are literally trading for pennies on the dollar only move a nickel or dime higher, substantial profits can be made.
Yet more often than not -- much more, in fact -- investors lose most of their money because penny stocks many times are simply "story stocks." They have a good-sounding premise behind them, but little in the way of actual sales, let alone profits. The pink sheets are where the pump-and-dump schemers thrive.
Price alone shouldn't be a factor in an investment decision, since buying Berkshire Hathaway at nearly $330,000 a share (or its B class stock at $219) is probably a safer bet than some fly-by-night operation trading at $0.07 per share. Here are three low-priced businesses -- with products that customers actually buy -- that are reasonably priced under $20 a share. And while not risk-free, they make a better investment than most any penny stock.