Different Types of Penny Shares
The Best Penny Shares to Buy
It is important to understand there are different types of Penny Shares, before you make
any investment decision.
You need to know what are the best penny shares to buy, and why,and the purpose of this
article is to help you make the right decision about the penny shares you might want to add to your
Young or New Issue Penny Shares
What this means is that the Penny Shares you might want to buy are those of young
Companies who have only been in business for a short time, or alternatively have only just become public. You need
to understand that almost every Company was once a penny share to buy, before growth turned them into a relatively
boring relatively stable large company with a track record.
Young or new issue penny shares to buy are of course risky, but of course the
excitement is the potential which is almost limitless.
Recovery Penny Shares to Buy
These are penny shares in companies that have fallen on
hard times, for whatever reason. As they have fallen from their former highs so has their share
What we are looking at here are penny shares that have potential to grow, because of
things like restructuring, which may be followed by growth.
You might come across a shell company, which is a company that exists but doesn't do any
business or have any assets. Most interesting of all is a Listed Shell Company which means it has shares
which can be traded which gives it significant value. It may well be set up for new management, or even a cash
injection for a new shareholder meaning they might be penny shares to buy.
Cyclical Penny Shares
These are penny shares that rise and fall almost according to the season. In this
case the season may well be due to the business sector they fall into, or whether or not the economy is growing or
shrinking. Anything to do with the car industry might be a case in point, which does badly in a recession, but well
when the economy is booming. Obviously these are penny stocks to buy when they are at their lowest point in the
cycle. You will need to continually research share prices for thiese types of penny shares.
Oddly enough this type of penny share comes into its own during a recession, when the
'luxury' penny share value is depressed. You should look closely at necessity areas like food because consumers
have to buy food regardless of the economic situation. It's not so much these penny shares decline, more their
Internet Penny Shares
These penny shares are quite different to bricks and mortar shares, because Internet
Companies may appear to have no real assets at all, so their share value is likely to go up and down at speed
according to the public perception of what they are doing, which might be quite wrong!!
Also look out for the penny shares of older companies who have decided to go down an
Biotechnical Companies with Penny Shares
These companies are in the forefront of technological innovation, and sometimes a small
paragraph in a newspaper can alert you to a company engaged in such work. remembering less than 10% of their
inventions ever get developed, but the successful launch, preceded by a penny share investment could be very
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