# Do penny stocks ever redeem themselves if they have already had a decent stock price?



## markrmau (24 January 2005)

I am not thinking of investing in this dog turd,

http://au.finance.yahoo.com/q?s=GNL.AX&d=c&k=c1&a=v&p=s&t=my&l=off&z=m&q=b

but I was wondering how often a penny stock can redeem itself - when at some point  it was a decent price (>$1). Not very often?


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## tech/a (24 January 2005)

Mark.

Of the 615 stocks trading at 20c or less 548 had their highest high value greater than 100 days ago.

So around 9% think Ill go short the other 91%.

Says something doesnt it!

Only 6 stocks worth 20c or less reached their highest high in the last 5 days of 615 stocks.Only 1 made a new high Friday (I havent down loaded tonight so this is from Friday!)



AZTEC RESOURCES	0.0000	AZR	C:\My Databases\MetaStock\ASX\A0	
CONNXION FPO	5.0000	CXN	C:\My Databases\MetaStock\ASX\C0	
JUP MINES FPO	5.0000	JMS	C:\My Databases\MetaStock\ASX\J0	
MGM WIRELESS	5.0000	MWR	C:\My Databases\MetaStock\ASX\M0	
MORNING STAR	3.0000	MSH	C:\My Databases\MetaStock\ASX\M0	
SEE CXE.CXE	4.0000	EWL	C:\My Databases\MetaStock\ASX\E0	


Hope this helps.


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## tulip (25 January 2005)

Penny dreadfuls should be classified by Market Cap, not S/P.


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## tech/a (25 January 2005)

tulip.
What do you suggest that should be?


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## tulip (25 January 2005)

Tech/a, you set the boundaries for a penny dreadful at whatever levels you like.  

But to suggest companies with a market cap in excess of $30 Mio, just because they are 20c or less, could be classified as penny dreadfuls, is downright silly.


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## tech/a (25 January 2005)

Fine but at some point a market cap has to be chosen as a standard from which a group of stocks can be determined as "pennies"

Do you know where I can get a list of Marketcaps for all companies.


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## tulip (25 January 2005)

An example of the folly of using the S/P to classify stocks is BDG.  Prior to it's 1:10 consolidation it was trading at around 8c and had a martket cap of $250,000,000 (that's $250 Million).  Hardly a penny dreadful!


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## tulip (29 January 2005)

markrmau it is impossible to even contemplate analysis on penny dreadfuls (except for trading momentum).

Sorry I got sidetracked by ego-head.

Making money out of "penny dreadfulls" is a simple as picking an ELEPHANT, with sovereign risk, finance issues, breaking new ground in inexploration techniques etc, etc .................. then hanging on!!!!!!!!!

Examples that come to mind are AVL, OXR, HSR, ZIM ...... I'm sure there are heaps more.  But there are plenty in the graveyard too.  Regarding sovereign risk, ask yourself, why would a cash strapped country sabotage opportunity for royalities and employment.  On the other hand ASX stocks exposed to sovereign risk are discounted and always will be.  They will never achieve full value.

You need to research the ELEPHANT, and be prepared to hold (for far longer than you anticipated) .......  and dismiss the accuracy of timetables.  Concentrate on the potential.

It's buy an ELEPHANT and hold for mine.


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## doctorj (29 January 2005)

I think we're arguing semantics here. "Penny dreadful" is an ambigious term too often assigned to any stock considered to be cheap and for good reason.  How it's applied depends entirely on the frame of mind of the person applying it.  For an individiual with a several hundred million dollar portfolio, it may be a stock under $5, for many people on this board, its a stock under 10c.  

Really, its irrelevant anyway.  If a stock goes up it doesn't matter if its from the top shelf or the dog house - either way its made somebody some money. Sure, typically analytical techniques tend to be unreliable of these cheap stocks, but that's not because they are considered penny dreadfuls, but is a function of their risk and a premium often inbuilt to their price by speculators.  Bad stocks are bad stocks whether they are worth 0.5c or $50, but I wouldn't go into an analysis of a stock in a different frame of mind based on its popular classification.


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## tulip (29 January 2005)

hey doctorj.

What about we nominate one penny dreadful with "attitude" ..... which means a potential 20 bagger at best, with all the associated risks and time frame disappointments.

Can we start a new thread?


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## doctorj (29 January 2005)

You're more than welcome to, though my contribution would merely be a commentary of other's suggestions.  No stock comes to mind that I expect/realistically hope to rise more than 400%.


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## RichKid (29 January 2005)

doctorj said:
			
		

> I think we're arguing semantics here. "Penny dreadful" is an ambigious term too often assigned to any stock considered to be cheap and for good reason.  How it's applied depends entirely on the frame of mind of the person applying it.  For an individiual with a several hundred million dollar portfolio, it may be a stock under $5, for many people on this board, its a stock under 10c.
> 
> Really, its irrelevant anyway.  If a stock goes up it doesn't matter if its from the top shelf or the dog house - either way its made somebody some money. Sure, typically analytical techniques tend to be unreliable of these cheap stocks, but that's not because they are considered penny dreadfuls, but is a function of their risk and a premium often inbuilt to their price by speculators.  Bad stocks are bad stocks whether they are worth 0.5c or $50, but I wouldn't go into an analysis of a stock in a different frame of mind based on its popular classification.




Agree with you wholeheartedly DocJ, in fact co's only need to restructure their capital to make a $5 share into a 50c share (although most don't). There was an interesting article in www.new2shares.com.au comparing two cos with vastly different fpo par values but similar, strong fundamentals. It was Leighton and another co with a sp of a few dollars I think. What we generally go into small cos for is faster sp rises (hence more volatility) Also HUGE cos (high share price value) would have had shares which were worth only a few cents at some stage in their past. ie Big cos were small once.


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## canny (3 March 2005)

market caps available on commsec as well as most other trading sites.

I just believe a 'penny dreadful' doesn't have to go far to make 10%, whereas the big ticket stocks have to go a very long way to get the 10%


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## roofus (3 March 2005)

ditto post's 2,7


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## drfuzzy (5 July 2010)

*Re: Do penny stocks ever redeem themselves if they have already had a decent stock pr*



tech/a said:


> Mark.
> 
> Of the 615 stocks trading at 20c or less 548 had their highest high value greater than 100 days ago.
> 
> ...




Those are actually some very interesting statistics.

I wish I had you around when I loaded up on Centro, you would have saved me a packet!

Especially when I did it again with BBI.


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