Stocks under $1? Need a last minute "investment"?

Question

I opened up my first sharebuilder account and after investing in what I wanted to. I still have about $60 left. Since it is a little amount of money I don't mind taking a huge risk of losing it all but also gaining a lot. I was thinking about investing in a penny stock. Is there any that you'd recommend or something to look for in a cheap stock.

Answer 1

look at XJT

Answer 2

Don't be fooled by the perception that penny stocks are a bargain because they sell for a low price.  Most of these companies have many millions of shares outstanding.  Think about it.  What difference does it make to buy 100 shares of a company for 25 cents that has a 100 million shares than it does to buy 1 shares of a company for $250 per share that has 1 million shares. Either way you get 1 millionth of the company.  Price is irrelevant. You should be looking at the potential for growth.  And the best way to determine that is with companies where you can get reliable info. The penny stock market if full of shell companies and schlock outfits that that are basically scams. They are hyped by unrealistic estimates of growth.

If you want big upside potential, then you'll have high risk.  A good strategy is to look at areas that are out of favor like financials and pharmaceuticals. A couple of excellent companies that are beat down and could have good LONG-TERM prospects  for growth (IMO) are Pfizer (PFE) and US Bank (USB).  Good luck.