Thursday, September 1, 2011

5 Stocks Under $5 That Insiders Love

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tdp2664 InvestorPlace Penny stocks have a solid reputation for being a risky investment; however, if the potential rewards excite you, then the list below might provide an interesting starting point for your search. To create the following list, we took a universe of penny stocks (priced under $5 per share) and searched for names with a market cap over $300 million experiencing significant levels of insider buying over the past six months. Here are some of the things we looked at when compiling the list of penny stocks: Market Capitalization (Market Cap) : Market capitalization, commonly referred to as market cap, is the total market value of a company's outstanding shares. It can be thought of as a measure of a company's size. Market cap can be calculated by multiplying the number of shares by the current price of the shares. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data. Insider Trading: Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading. Insider buying is represented as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator. Now that you're armed with information, take a look at the following list of penny stocks that insiders seem to think



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