What are Penny Stocks? Which are the Best Penny Stocks in India? Penny Stocks investing is a good or bad strategy? Before getting the answer of these questions let us go through one real life example – My friend has purchased penny stock in 2009. It was one of the best penny stocks in late 2008, however, he regret his decision today. He lost lot of money in this penny stock. From this example, we can say that penny stock is risky investment option. As per me, penny stock is like rich-poor stock. It can make you rich or it can make you poor. So, let’s try to get more information about a penny stock.
What is Penny Stocks?
- Penny stocks are stocks that are available at the price of a penny.
- It is a very Low stock cost in range of Rs.1 to Rs.10.
- The Market capitalization of company is less than 100 Cr.
- These stocks are highly speculative stocks of small companies.
- Penny stocks are typically growing company with limited cash and resources
- Penny stocks are a high-risk investment with low trading volume and less attention from the investor.
Also Read :- Penny Stocks – Good or Bad for Investment
How to Identify Best Penny Stocks?
It is very difficult to identify the best penny stocks. You can follow the method given below to find out best penny stock for investment.
- The company should be in business for several years.
- The product and services of these stocks must be real and visible.
- Promoter holding in this stock should be reasonable 30-40% minimum.
- The Stock should be less volatile.
- The Company should have potential in terms of business and earning profits.
- The Company should be competent in the respective sector.
Also Read – How to Find Multibagger Stocks for Investment? – Flowchart
Best Penny Stocks in India
Based on criteria mentioned above and other factors, I have tried to find out best penny stocks in India for 2015-16 and here is the list of the same.
Also Read – Multi bagger stocks that made you crorepati from lakhpati
Kumar Wire Cloth – Kumar Wire Cloth has given a magnificent return of 3143% in last one year. Kumar Wire Cloth has shown high sales value, however, profit margins are very low.
Cambridge Technology – Cambridge Technology is small IT company stock. This stock has given a return of 1866% in last one year. Fundamental of this company is not so good, however, it turns out be best penny stock for 2015.
Virat Crane – Virat Crane is in the business of dairy products. In last one year, this penny stock has given a return of 539%. Company’s highest income till date is 1.8 Cr.
White Diamond – White Diamond deals in apparel accessories. The White diamond is able to give 275% return in last one year. Fundamental of this stock is very weak, however, it is one of the best penny stock of 2015.
RT Exports – RT Exports deal in agriculture products. In last year, this stock has given return on 164%.
Also Read:- Bluechip Stock – Should You Invest in Bluechip Stocks?
Penny Stock Investment is good or bad?
As discussed earlier penny stocks are like rich poor stock it can make you rich or can make you poor. It is good or bad for investment that you can decide based on pros and cons of these stock.
Pros –
- If the identification of penny stock is done rightly it can give you huge return from 100% to 3000%.
- These stocks are cheap so you can buy these stocks in bulk.
- Some Stocks are stuck up as penny stock due to temporary period and it can bounce back and give skyrocketing returns.
Cons –
- Very high risk as we don’t know that stock will grow or fall.
- Penny stock may get de-listed and you will not able to sell it.
- Trading volume of the penny stock is very low, so it is difficult to exit from these stocks.
Should you buy Penny Stocks?
Investing in penny stock is like gambling. You are investing money in the company with no fundamental in the hope of earning a big return. Penny stock is high risk, high reward game if you are conservative investor it is a big no for a penny stock.
Another side is “No Risk No Gain” you have to risk money to gain more money – “Kuch paane ke liye kuch khona padta hai”.
If you have a lot of surplus money you can go ahead and invest in the penny stocks. The risk is yours, you may lose entire money. The decision of investing penny stock is entirely up to you.
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anand
Sir pls suggest 5 stocks like virat crane cambridge and kumar wire and what r ratios to find on screener
Raviraj Parekh
Dear Anand,
I am bullish on Pfizer,Muthoot finance and Ramco cement.
anand
thanku sir can i buy in sip mode this stocks. and what are the ratios to find good stocks for long term like wipro symphony
Krishna
pls suggest 5 stocks for 2016-2017
Raviraj Parekh
For 2016-17 I am bullish on Infosys,Maruti,Lupin,Reliance and TCS. As per me these stocks will act as wealth creator for 2016.
Sourin Banerjee
I filed your tips for penny stocks is no doubt good . please give me tips on 5 multibagger penny stocks for 1 or 2 years.
Rajkumar
Hi Sir,
Can you please suggest some current penny stocks for 2016 which will be multi bagger in 2 to 3 years?
radha
dear ravi raj
please share me the multi baggers like cambridge tech, i am small invester below 10rs multibaggers
nawaz
Looking for penny stocks for long term, pl suggest some
ramchandra kuntal
frnds.srs ltd,&ksk eng.hold 3to4yr
Aravind
Hi Raviraj,
What’s ur take on Chromatic India, Syncom Formula, Syncom health ?
Is it a good buy for long term – 5-7 yrs?
Aravind
Raviraj Parekh
Dear Aravind,
Chromatic India
(1) Revenue and Expense is nearly same.
(2) Profit margin for past few years is very low. Stock is not moving up since past 3 years.
No for Chromatic India.
Syncom Formula
(1) Profit Margin has improved.
(2) Buyers are very less and stock is not moving up since past 5 years.
No for Syncom Formula
Syncom Health
(1) Profit margin is in negative since past two years.
(2) Revenue is going down.
No for Syncom Health.
shubham sakarwal
where are these stocks listed?
is it good to do intrday trading with penny stocks?
please put a link.
Raviraj Parekh
Penny stocks are not good for Intraday trading.
Prakhar
Hey Raviraj,
I am new in this field and therefore i am seeking for a good advice from you. Can you please tell me the name of at least 5 stocks which can help me to increase my money.??
Thanks!
Raviraj Parekh
Dear Prakhar,
You can plan to invest in 10 Best stock mentioned here for the long term – https://moneyexcel.com/14322/10-best-stocks-buy-long-term
k vanangamudi
Buy bedmutha Industries will touch Rs 50 in six months
kamala
i wish to buy penny stock which can be a multibagger
dilith
sir,
can u pls name 6-8 stocks that to keep for my 3year old daughter? rally longterm. better to include 2-3 smallcaps too
thank u
Raviraj Parekh
Dear Dilith,
Please invest in Lupin,Sun Pharma,Titan,M&M,Pricol.These stocks are recommended for long term investment.
Shridhar
Hello sir i just saw your posts and I have checked those share prices and all most 95%stocks have gone up sir my age is 20 and I have little bit saving what I have did from 2years can u please suggest me 5stocks below 6rs where I can invest for next 2 to 3 years
Raviraj Parekh
Dear Shridhar,
You can invest in R T Exports,SRS Ltd,HFCL,Rain Industries.However, please remember Investment in penny stock is risky affair and you may end up losing money.
Pradeep
I have purchased Infosys in bulk it’s been more than a year but I do not see much gains in it.. Now due to the Brexit don’t know what’s the impact..
I am also interested in penny stocks like RK Export. Pleas shed some light on it
Raviraj Parekh
Dear Pradeep,
Stay Invested in Infosys.Long term you will get advantage. R T Export is good penny stock.However,you need to wait for 1 or 2 years to see gains.
Ram
Hi Sir, I have 50k penny stock shares of JCT ELECTRONICS LIMITED. This company has been de-listed. So please let me know, what can i do to get my invested money back. As i am new in this field and having very little knowledge.
Raviraj Parekh
Dear Ram,
It is very unfortunate that stock of company is de-listed.In this case first you need to find out why company stock has been delisted.
Three types of Delisting is possible –
Forced de-listing leaves investor no options but to sell at whatever price is decided, which may be less than the actual value.
Voluntary de-listing offers shareholders a premium to the market value and the transaction is usually between the promoter and the shareholder (off the exchange)
De-listing by Operational law where company stock is delisted due to operational problem.
You have two option.There are brokers who deals in delisted shares you need to find out such brokers and second option is to Write a letter to company’s compliance officer, that you are willing to dilute your share holdings.
Ravi shah
best penny stock for day trading?
Raviraj Parekh
Penny stock volume is low so it is not recommended for day trading.
Kunal
Sir, I want to invest in subex Ltd for 3 or more years.pls suggest future.thanks कुणाल
Raviraj Parekh
I suggest not to invest in Subex as return will be very low.
nikhil bafna
dear raviraj sir i have to invest per mnth 20thousnd for 2year and i will wait to gain profits like kumar wire Nd Cambridge can i buy srs and rt export every mnth 1000quntity of both share i will wait 5 year to 10 yeae for big gain