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Best Penny Stocks Picks

Best penny stock picks can change rapidly from one day to the next, which is yet another sign of the higher-than-average volatility of penny stock trading. Read on to find out what qualities to look for to pick the best penny stocks.

Quality 1

You want a high PE, this is a great indicator of the best penny stocks.. PE, or Price-Earnings ratio shows roughly how much each investor pays per share for the profit generated by the company. This is calculated by dividing the price of the stock by the Earnings Per Share figure. This measurement is one of the most common in the trading world. Once you calculated the figure, you compare it to the PE of other stocks in the market, or those in the same industry sector. If yours is higher, most likely it's going to put the price up.

Quality 2

The best penny stocks don't only have a high PE, they also have a low PEG. PEG stands for Price/Earnings/Growth. Work out the Price-Earning ratio as mentioned before, and then divide that by the analysts' projected earnings per share over the next 3 or 5 years. Traditionally, low PEGs are better, and many pro traders will not consider anything with a PEG over 1.0.

Quality 3

Another fundamental aspect to consider is cash flow. A lot of investors tend to forget about this, as the penny shares are so cheap even a slight price rise can bring tidy profits. Just be aware that a company with non-existent or reducing levels of profit can't sustain a share price indefinitely, it will almost certainly need to drop at some point to reflect the lack of profit.

Quality 4

Lastly, another useful quality present in the best penny stocks is steady and competent management. At first glance it seems like something you could never possible find out, but it's just another calculation to be made. All you do is divide the annual profit figure by the annual sales figure, to get the profit margin. Put simply, the larger the profit margin the better. A company that needs a billion dollars in sales to turn a profit is generally not as well managed as a company that takes 10 million to make 2 million.

Best Penny Stocks List for 2009

2009 presents a great opportunity for stock investment at any level due to global financial uncertainty as stocks rise and fall rapidly. The stock market is presenting us with a wide variety of best penny stocks list for 2009. Many of them are new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors. The initial investment in penny stocks is seldom large but the payoff can be huge for the end year. While no penny stock is without risk, here are a few burgeoning companies that many feel are moments away from their big break. Here is our best penny stocks list for 2009:

1. OPSY is a great MOMENTUM play for this week after closing strong on Friday at $0.05 looking for its next big bounce. As you can see from this chart below OPSY recently made two HUGE runs for WHOPPING gains each time reaching new highs after retracing to a new support level. The first time OPSY ran from $0.02 to a high of $0.063, for a gain of 215%! After running to a high of $0.063, OPSY had a healthy pullback to support at $0.03 before making another incredible BOUNCE to a new high of $0.08, for a gain of 166%!

2. Our next penny stock pick for 2009 is CGCA! I have been watching this play for weeks now and have been waiting for the perfect time to announce it to the club. After watching CGCA run from $0.50 to $1.94 for a gain of 288% in just a few weeks I have waited for a major retracement for a potential perfect bounce play. CGCA fell down to $0.99 today and after coming back to close strong at $1.04 today, I think our timing may be perfect for 2009!

3. Yasheng Eco-Trade Corporation trading under YASH.OB. YASH is currently at $0.50.  YASH is an agriculture play which as you know is a sector we have had unbelievable success in. If you read this report you will be as shocked as I was when I saw that Yasheng Group is a $1.7 Billion dollar company with sales of $736 mm!