Many investors ask, are penny stocks real?
Penny stocks are real; they are shares in small or start-up companies unable or unwilling to list on the major stock exchanges.
The best penny stocks right now could produce gains counted in thousands of percent over the next decade. Click Here To Go Straight To Our Top Penny Stocks
Are Penny Stocks Worth It?
It is a valid question, are penny stocks worth it?
Our reply, is owning the next multi-billion dollar international company at pennies on the dollar worth it? I’d have to say yes but the question remains, “which one will make me the next penny stock millionaire and which will go broke?”.
- A penny stock is any share of a publicly traded company that trades at low values. In the US the SEC defines a penny stock as any which trades for less than $5, is not listed on a major exchange and fails to meet other criteria. The best penny stocks right now exhibit substantial growth potential in high demand markets.
Are Penny Stocks Legal
Another question often asked is this, “are penny stocks a scam?” Penny stock scam corporations do exist and investors must be wary. The FBI says penny stocks fraud is rampant, the market is thin and illiquid making it perfect for price manipulation and pump&dump schemes.
Even so, the real risk to penny stock investing is the nature of the underlying companies. These companies are referred to as “high risk” because they are often based on new, unfounded technologies or businesses with little equity for investors to share in the case of failure.
Penny stocks are businesses not able to utilize, or choose not to use, the mainstream venture capital and equity markets to raise funding. They choose instead to sell shares of their company over the counter and that is done at the OTC Markets.
The OTCBB, over-the-counter-bulletin-board, was the original listing for penny stocks. It was a price matching service operated by the Financial Industry Regulatory Administration, FINRA, and since shut down due to technological advancements.
Now most trading has migrated to the newer OTC Markets Group listing. Previously known as the “pink sheets” it is where investors can find the best penny stocks right now. Our list of penny stocks to buy right now includes top rated players in the budding marijuana industry, a financial lender and pharma.
Types Of Penny Stocks To Buy
The OTC Markets Group uses three classifications to group listed stocks according to the amount of financial disclosure provided.
The highest level, OTCQX, is the only level to require financial disclosures as part of the listing process. OTCQX stocks include both multinational companies seeking exposure to the US market and domestic growth companies looking for investors.
OTCQX companies are not required to list financial reports with the SEC, but they are required to post regular financial updates to the OTC Markets Group in a manner mimicking the Edgar system. OTCQX businesses must be going operations, no shell companies or bankruptcies, and have a third party sponsor for financial oversight. These are the most stable and trustworthy of the OTC businesses but the designation is not intended as a sign of safety, investors should remain cautious.
OTCQB is the middle tier of penny stocks. It requires a $0.01 bid price increment, intended to weed out businesses whose intent is fraud, but has much looser reporting requirements than top tier penny stocks. These companies are only required to certify their financials once per year via CEO verification although regular quarterly reporting is required. Any new stock approved for listing as an OTC issue must meet this requirement for initial listing. It costs businesses $10,000 per year after a $2,500 application fee but is not mandatory once listing is completed.
OTC Pink is the lowest level of OTC listed stock and is sub-divided into 3 categories. These stocks have 0 reporting requirements and are categorized according to what they do report. Pink Current includes all companies that provide regular quarterly financial statements and updates on operations. Shell companies and frauds may be found in this group but not as many as those listed as Limited Information or No Information.
These Penny Stocks Are For Real But . . .
Pink Limited are companies that provide limited information and that no older than 6 months. Financial reporting can include postings to the OTCMG or the SEC’s Edgar system.
Companies in this group are unable or unwilling to meet the OTC Markets Guidelines but still report when they can. They are marked with a yield sign on the OTCMG website letting investors know they carry a higher amount of risk. This category often includes businesses that are in financial distress or facing bankruptcy so be extra careful.
Pink None are penny stocks that can’t, or won’t, disclose information to the public markets. They are most often businesses that are now defunct or operating in the shadow world of questionable business practices. These businesses are considered highly risky and come with a stop sign on the OTCMG website.
- Are penny stocks real? Companies like Apple, Microsoft, Amazon and Facebook all got their start trading for less than a $1.
Caveat Emptor is a special class of OTC penny stock. These are businesses with a current or ongoing public interest concern that may be of harm to investors. This may include spam campaigns and other frauds intended to hurt the public. Companies listed as Caveat Emptor that are not listed as Current will have their quotes blocked by the system.
The Best OTC Stocks Right Now – A Diamond Mine
Arctic Star Exploration Corporation (ASDZF-OTCQB) – Arctic Star Exploration is a diamond and precious minerals exploration and development company with a promising project in the heart of Finland’s proven diamond bearing region. The project is called Tiamantti and has been in the works for several years. The company has worked hard to acquire 100% ownership of the district-sized property known to hold at least 2 diamond bearing kimberlite pipes.
To put it in perspective this mine site is located within the same geographic region as other, currently operational, multi-billion dollar diamond mines. The Lomonosov and Grib diamond mines, two kimberlite pipe mines located near Arkhangelsk Oblast, are just over the border from the Tiamantti project and are comparable to what may be found there. The two kimberlite pipes, known as White Wolf and Black Wolf, have already begun drilling with new pipes expected to be discovered as the project advances.
- The initial drill test at Tiamantti found 111 diamonds within a core sample.
Arctic Star has recently appointed a new CEO & President, Scott Eldridge. Eldridge is well known in the mining community and has successfully navigated several companies through the difficult start up process. He has worked for many years within the industry and is notable for brokering acquisition of smaller mines by top name players. A successfully launched operation and discovery of marketable minerals would be a catalyst for the penny stocks price as well as potential for buyout bids.
The OTC Stocks To Buy Right Now – Marijuana Stocks
Freedom Leaf Inc (FRLF-OTCQB) – Freedom Leaf Inc is a top 10 marijuana stocks and penny stock poised to make big gains as the sweet leaf is legalized across North American. The company operates in three segments to support and stimulate the marijuana economy and public awareness of marijuana issues.
The company’s flagship project is education and awareness, done through its publication Freedom Leaf Magazine, The Good News In Marijuana Reform. The company’s two business arms are focused on investment and promotion of recreational, medicinal and industrial hemp based businesses.
The company’s primary efforts are focused on mergers & acquisitions within the marijuana industry including the incubation, launch and growth of new business. Freedom Leaf also operates through a division called the FLI Agency.
The agency is a full service marketing agency geared toward the development, production and launch of new hemp based products in the nutritional and cosmetic arena’s. Because Freedom Leaf does not handle, grow or sell hemp products directly it does not face the same business hurdles as its underlying investments.
DOJA Cannabis Co. Ltd. (DJACF-OTCPink/Current) – DOJA Cannabis Co. Ltd is a craft producer of cannabis for the recreational and medicinal community. Operating under Canada’s newly regulated industry it is poised to become a leading lifestyle brand and is a top 10 best penny stocks to buy right now. Listed as a pink sheets company largely due to the uncertain future of cannabis in the US it is poised to grow nonetheless.
The company recently announced the successful placement of $12.5 million worth of subscription receipts ahead of a planned merger. The merger is with retail oriented Tokyo Smoke, another lifestyle focused marijuana brand, and will result in a new company if completed.
There are agreements in place with Aphria Inc that ensure success for the new company provided the merger is completed. These include a promised $10 million equity investment along with supply agreements for products. The new company would be called Hiku and speculated to become the preeminent brand in the adult Canadian marijuana market.
Other Top Penny Stocks For 2018
Cantabio Pharmaceuticals Inc (CTBO-OTCQB) – Cantabio Pharmaceuticals is a pre-clinical stage biopharma company specializing in researching treatments for degenerative neurological diseases including Alzheimer’s and Parkinson’s. It is on more than 1 top 100 penny stock lists and for a reason, it is focusing on identifying small molecule chaperones for clinical trials and a likely source of major break through. The company is rated QB and current on all filings. Morningstar rates it as 3 stars according to its penny stock guidelines.
IEG Holdings Corp (IEGH-OTCQB) – IEGHoldings Corp is an online lender providing unsecured consumer loans through its website Mr.AmazingLoans.com. The company issues $5,000 and $10,000 loans in 20 US states. The company has a market cap of more than $4 million and positive cash flow; it is also one of few OTC penny stock businesses to pay a dividend to shareholders.
What makes this company so attractive, aside from a low share price and dividend, is its interest in cryptocurrency. The company is looking to leverage cryptocurrency and the blockchain sector including the possibility of issuing its tokens. The company is rated current on its reporting, issues regular and detailed statements and is rated 3 stars by Morningstar.
How To Buy OTC Stocks
Buying penny stocks is easy. All it takes is an account with any of the major broker-dealers. They all have an electronic connection to the OTC Markets and can execute trades accordingly. To answer the question, are penny stocks real? Yes, they are, and they offer immense opportunity for investors. Don’t forget, the best penny stocks right have positive outlook for growth in high demand markets.