When it comes to trade with penny stocks, you need to think on impactful strategies to execute as penny stocks are usually speculative & involve high risk factors due to liquidity & small capitalization. Therefore, investments in penny stocks need capital investment strategy. As investment is risky in penny stocks, here are some investment strategies shared for how to pick good stock while trading in Singapore stock market.
Analyze the Stocks?
Being investors in penny stocks, you shouldn’t consider the source of internet forums. Instead of this, to analyze whether there is sufficient amount of stock in the investing community, it’s recommended for investors to analyze the demand of stocks. And, this can be regulated by average daily volume of the stock which will function as good Stock trading picks for you. Preferably, the least volume of stocks should be more than 100,000 units each day.
Fundamental of Penny Stock:
Fundamentals research is one of the important things to follow. The fundamental criteria which must e followed includes EPS (Earnings per share) or Discount to Net asset value (NAV) which means that stock is at lower price than its total accounting value.
EPS is a profitable & one of the easiest ways to measure stocks, if company is profitable. But, if the company is trading at the same time at a discount to NAV then it may happen that market hasn’t valued properly.
Also, when investing in penny stocks; avoid all dividends as these are not reliable & have worst selling point.
If stock pricing getting lower down then it’s better to quit the trading. Also, it’s recommended to go for the stocks which are trading in an increasing manner but also not remains all time high. Getting Stock Picks will be a profitable option to get some idea about pricing trends.
Check out the News:
Checking out the news is one of the best factors to provide Stock signals. Knowing the sectors offering growth potential or to know where the country’s economical stands are the beneficial factors to look for. The articles from these kinds of sources highlighting the penny stocks will help you to be confident for investing in stocks.
The Final Word:
Investment in penny stocks will be profitable if invested by understanding the financial knowledge. However, following the above mentions strategies will be beneficial to invest in penny stocks.