Penny Stock Research

How To Find Good Penny Stocks To Buy

Right Now

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Hi, My name is Aaron and I‘m with Penny Stock Research, today were

reviewing our recently published article…

How To Find Good Penny Stocks To Buy Right Now

What’s the best way to find penny stocks to buy right now? First, focus on the fundamentals. Discipline yourself to

ignore all the intoxicating tales of profits just around the corner spun by pump and

dump promoters.

What kind of fundamentals? Start with the ability of the company to make money. If you don’t think that can

happen, why bother? And why not deal with the here and now? Let’s look at

what’s going on with the company today.

If management is talking about profits in the future, when does the future arrive? And what has to happen for profits to hit

the books? What has to be sold? Has the product been produced?

If not, how come? Does it need any kind of regulatory approval? Look at the

income statement. See if the company is actually selling something and bringing

in revenue.

Dig a little deeper on this and see how the revenue is being reported. Here’s

what I mean. Let’s say your penny stock company sells a widget for $24,000. And it reports all of this $24,000 as income for

the current quarter.

But whoever bought the widget has negotiated payment terms of half up front

and the remaining $12,000 spread out over the next two quarters. This can make a difference. It hits cash flow.

Here’s something else to look at.

Good Penny Stocks Have Reliable Revenue

See where the revenue is actually coming from. If your company reports $1.5

million in revenue for the most recent quarter, and $1.2 million came from

selling off some excess inventory to a wholesaler, that’s not good.

Or maybe the income the company reports is from a one-time legal

settlement. The company’s CEO comes out and crows about “Income is up 134% this quarter.” But there’s no mention of

the one-time legal settlement.

This detailed information will usually be buried in a document like an 8-K. This is a document the company files with the Securities and Exchange Commission,

the SEC. These docs aren’t very exciting, but they can sure be illuminating.

The disclosures, exhibits and financial statements are where you’ll find piles of

dirty laundry. But you’ll also find the good news.

And because so many penny stocks are completely ignored by analysts, and fly under the radar, this is where you can

find out about opportunities before most other investors have a clue.

So when you find solid revenue, real money coming in, you just might have one of the good penny stocks to buy

right now. But don’t limit your sleuthing to the income statement. Take a look at

the balance sheet.

Good Penny Stocks Have Clean Balance Sheets

Start off by looking at assets. Actual assets, not goodwill. You’d be amazed at how many of the pump and dump penny stocks don’t have any assets showing up

on the balance sheet.

Actually, you’d be surprised at how many pump and dump stocks don’t even have a balance sheet. If they aren’t traded on an exchange, they don’t have to file one

with the SEC.

See if the value of the firm’s assets is growing, shrinking, or staying the same. Look at how much the company owes. Is

it long-term or short debt?

Based on how much money it spends, does it have enough money in the bank

to stay in business? Has it been refinancing existing loans? This is never

a good sign.

If the company is struggling to stay afloat, and borrowing more money at

higher rates, why should you invest in it? You always want to make sure you’re

buying penny stocks in resilient companies...

not companies that spew out endless promises.

To protect yourself, commit to mastering the blocking and tackling skills. Some simple fundamentals of due diligence

can keep you safe. Want to see how this process plays out?

Let’s take a look at a penny stock so you can do this for yourself.

Good Penny Stocks Have Multiple Income Streams

Multiple income streams means money comes in through more than one door. The company doesn’t bet the farm on one product. Here’s one that did, and

look at what’s been happening. Macrocure Ltd. $MCUR trades on the

NASDAQ.

It’s a biotech stock, and in the spirit of full disclosure, I’ve got to tell you that the biotechs aren’t very appealing to me. I’m the first to admit I don’t understand the biotech business. The science takes a

better mind than mine to grasp.

Being able to carve out the winners from the losers is a challenge even for an

expert who lives in the biotech world. Some penny stock traders say that

biotech stocks are like lottery tickets. I can’t disagree.

One other strike against Macrocure - it’s not an American company. It’s based in Israel. You usually get better financial

data and stronger disclosure when you invest in a U.S.-based firm.

So when we look at Macrocure, let’s just look at it as a business so we can learn

from the numbers.

The day I checked it out, Macrocure had a market cap of $22.06 million and the stock traded at $1.32. Here’s how the

stock has been doing...

Ugly, isn’t it? So right off the bat, before I slog through the income statement and

the balance sheet, I’ll let my curiosity get the best of me and try to find out what

happened to send the stock into a tailspin in August.

August 19th the stock opened at $12.60. The next day, it closed at $2.98.

Sometimes, all you can say is, “Wow.”Eight days later, the following headline

showed up on Reuters.

“Macrocure's lead drug fails late-stage study.” Why did the stock swoon eight days before this information became

public? Who knew what and when did they know it? You’ve got to wonder.Do you see all the warning signs?

Can you find a single good reason to invest in this beat-up biotech penny

stock?

The Bloodied Penny Stock Balance Sheet

When you look at a balance sheet, which you can find on any of the finance sites,

go to the line that reports Retained Earnings. Retained earnings mean what’s

left over from money that’s been made after dividends have been paid.

It’s the money the company invests back into the business, or to pay down debt. At Macrocure, there aren’t any retained earnings. Only losses. And the losses

are steamrolling. Money is flying out the door.

In 2014 losses hit $68.2 million. In 2013, they were $47.7 million, and in 2012,

$24.4 million. Not exactly an encouraging trend. Have you seen enough?

Do you see how spending just a few seconds glancing at a balance sheet can

arm you with essential information? If you want to find the best penny stocks to buy right now, find a balance sheet that’s

in decent shape.

Take a look at how much money is in the bank. Is there enough cash on hand for the company to stay afloat while it waits for revenues to come in? Is there a long-term pile of cash tucked away? Are there

any real assets?

You can always depend on the balance sheet to shed important light on the

company. Unless executives are playing fast and loose with the facts, you’ll know where things stand. How do things stand

with your penny stocks?

Are you turning up some interesting opportunitie? It would be great to hear from you. And if you have a question

about a stock or investment idea, shoot us an email. You can also leave us a

comment on the website.

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