Penny stocks

By | March 4, 2018

Sunday, March 04, 2018

Penny stocks with good fundamentals and strong business models have the potential to become multi-return in the long run. These stocks lack liquidity and carry high risk. Picking the best penny  or small cap stocks is never easy in a rising market. However, we have picked some very good ones, which can generate good returns in the medium to long term. While small cap stocks can give huge return, the losses, too, can be huge.

Penny stocks are not tracked closely by expert and that is why the real value of good small cap stocks can remain undiscovered for long. This makes investing in them risky. But the returns of finding a hidden gem are huge too, for such a stock may become a mid- cap or even a large-cap stock over time, giving superlative returns.


Also read: Multibagger stocks

Business model

A unique and robust business model augurs well for the company in the long run. Companies with a wide economic moat — because of a strong brand name, clearly superior products, a low cost structure, or any other significant advantage — have a big edge in maintaining long-term profitability and market share.

Every big companies start as smaller companies. I will choose a very small company (penny) then hold it for 5 years or 10 years. If this is quality company then it will be a multibagger over period of time. Usually 95% people invest in penny stocks for quick returns and 5% people invest because they believe in long term story of the company.

I usually identify these type of stocks as penny stocks. If you are also planning to invest in penny stocks one should always consider the quality of the management and the macro financials of the company.

      1. Winsome Breweries Ltd

       2. Piccadily Agro Industries Ltd

       3. Andhra Cements Ltd

       4. Soma Textiles & Industries Ltd

       5. Sanwaria Consumer Ltd

       6. KMC Speciality Hospitals (India) Ltd

       7. Surat Textile Mills Ltd

       8. Ashirwad Capital Ltd

       9. Country Club Hospitality & Holidays Ltd

      10. Shree Steel Wire Ropes Ltd


The article is not a solicitation to buy, sell in securities or other financial instruments. This article is strictly for informational purposes only. The research is based on the current situation may be change from time to time. The author do not accept culpability for losses and/or damages arising based on information in this article.

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