About to Buy Penny Stocks? Look at These 3 Companies First
The Securities and Exchange Commission broadly defines penny stocks as stocks belonging to very small companies and trading below $5. Stocks in this category often appeal to investors who are willing to take on big risks in hopes of recording market-crushing returns, but penny stock companies are usually cheap for a reason. The category has a terrible track record of performance.
That doesn't mean that there aren't plenty of smaller companies that stand out as worthwhile investments capable of delivering massive returns. Focusing on small-cap tech companies with established businesses poised to benefit from and shape influential trends can allow investors to pursue explosive returns without opening themselves up to the outsize risks that come with buying penny stocks. If you're seeking huge returns, consider adding Glu Mobile (NASDAQ: GLUU), Eros International (NYSE: EROS), and Himax Technologies (NASDAQ: HIMX) to your portfolio.
Image source: Getty Images.
Source Fool.com