Penny Stock Screeners

In recent years there has been much press given to penny stocks and their value, especially to the beginning investor who doesn’t yet have a lot of capital to invest. Unfortunately, one of the other problems a new investor often confronts is just where to invest their money! There are literally hundreds of penny stocks out there so it is virtually overwhelming trying to determine where to start. The good news is that there are handy little programs called penny stock screeners that are programmed for just this purpose, but first it would be a good idea to have a better understanding of penny stocks.

Cost of Penny Stocks
The first thing to understand is the fact that there are a million and one (a slight exaggeration) definitions of what exactly a penny stock is. You will hear it referred to as a stock that sells for less than $5 per share but other people say they should cost no more than $4 or even $3 a share. The point is they sell for very little money, sometimes under $1 per share hence the name penny stocks.

Who Issues Penny Stocks
None of this is as important as the fact that penny stocks are either issued by a new company looking to raise expansion capital or a company that saw an economic downturn and no longer has the net worth to be listed on the major exchanges. A company selling penny stocks does not have a net worth greater than $500 million or they would be listed on the major exchanges. Now that you understand that penny stocks are issued by new or re-emerging companies it is time to understand the benefits of penny stock screeners.

Free and Subscription Based Screeners
There is a wide variety of penny stock screeners programs online, some free and some as part of a subscription or membership to an online site that actually sells penny stocks. While these sites may not be brokerages in the traditional sense, for all intents and purposes the lay person would view them as such. Actually, since penny stocks are not sold on the major exchanges they are not regulated in the same way as the major players, but that’s another story altogether. Whether penny stocks screeners are free or part of a membership, they are still handy little online programs that help the investor choose which stocks to invest in.

Penny Stocks Screeners Search Criteria
All you need to do is predetermine your criteria, enter the data into an online form and within mere fractions of a second you will have an abundance (hopefully!) of penny stocks to choose from. For example, the user could enter in the maximum amount per unit, the market cap, the type of industry and perhaps even such things as annual sales and/or dividends. The more sophisticated penny stock screeners allow the user to gradually narrow down the number of stocks to choose from by changing up the criteria while the more basic programs only allow a single pass.

Whether you are new to the world of penny stocks or are just looking to diversify your portfolio, penny stocks screeners can help simplify the process tremendously. Some of the dotcoms that have penny stocks screeners that are worth looking into would be Yahoo! Finance, MSN Money, AOL and MarketWatch. While many sites like these offer free penny stocks screeners, others do charge a subscription/membership fee for using their software. Understandably, the more sophisticated screeners are probably part of a subscription package but the levels of search criteria are often more advanced which helps significantly narrow down your options so that you choose the penny stocks that best suit your investing strategy.

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