The definition varies with countries but in the U.S., a penny stock is one which is trading under $5 and is often referred to as a micro-cap. A micro-cap is a company whose market capitalization is between $50 million and $300 million. These stocks trade mostly over the counter, rather than on main U.S. exchanges. But there are exceptions. You can find a few trading on the main exchanges as well, either U.S. or overseas or both.
The odds may be stacked up heavily against penny stock investing. But penny stock investing is not without its merits. The biggest allure is their affordability. And if you are lucky enough to zero in on a safer bet among penny stocks, you stand to take home superlative, or at least decent returns. Also, the current market downturn has pushed stocks of many companies with viable businesses into penny market territory. This gives us one more reason to take a look at penny stocks.
Here are a few penny stocks that I would recommend as relatively safer investment options.
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