Research

How to Find and Research OTCBB, Microcap, Penny Stocks

Firstly, don’t listen to any Internet chatter or email blasts, most are worthless. Always do you own due diligence. Begin by reading OTC-BB press releases. There can be upwards of a hundred in a single day. Scan the headlines, if something looks intriguing read further. Stockhouse.com is one free source that provides OTC-BB news. Better yet, get a Google News Alert . I use one with the following key words: OTCBB record revenues. On a daily basis I peruse a summary of OTCBB company notices that mention record revenues in their reports. From the ones I save I go to Yahoo Finance for Quotes, News, Charts, Profiles, Insider Trading and links to SEC documents. Read the SEC documents (very important). If your not sure which to read start with the 10-QSB (the quarterly report). For Canadian Companies check SEDAR. Look for red flags like: convertible debentures, large debt, zillions of shares outstanding, etc.

Next I would go to Silicon Investor, Raging Bull , or InvestorsHub and see what people were saying about the stock. There are message boards for nearly every stock traded and if not, you can become a member and start your own thread.

A visit to the company website would be a logical next step. If I liked what I saw there I’d then fill out a simple research form and track the stock on a daily basis.

To buy and sell penny stocks one needs a penny stock-friendly broker. Not all brokers will allow trading of penny stocks, or if they do, some charge exorbitant fees. A partial list of Penny Stock Brokers includes: TDAmeritrade, E-trade, and Scottrade.

Software available for tracking your portfolio are many.  All the major portals like Yahoo and MSN offer portfolio options. I like Medved’s Quote Tracker a software program that runs directly on your desktop.

Charts are a good way to calculate the timeliness of entries and exits. BigCharts.com and StockCharts.com offer interactive charting from minutes to years.

Researching stocks is an unending quest. Go to one of the big search sites like Google.com enter a company name and follow as many links as you can. You’ll be amazed what’s out there.

Best of Luck.