CG Power And Industrial Solutions Limited, formerly Crompton Greaves Limited, is engaged in the business of power transformers and reactors, low tension motors and switchgears.
The company provides end-to-end solutions to utilities, industries and consumers. It also manufactures a range of power and distribution transformers, extra high voltage EHV , medium voltage MV circuit breakers, lightning arrestors, isolators and vacuum interrupters. These are some penny stocks that have turned multibagger giving robust returns to its investors. However, one must always be cautious and research as much as possible before investing in a penny stock.
Investors with low risk appetite should prefer mutual funds or other safe large cap stocks instead of penny stocks. Never miss a story! Stay connected and informed with Mint. Download our App Now!! It'll just take a moment. Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image. You are now subscribed to our newsletters. Premium Premium PM Modi chairs high-level meeting over cryptocurrency a Premium Premium Forget inflation or supply crisis, European profit outl Things to Know Be Premium Future told to halt asset sale process.
Subscribe to Mint Newsletters. Internet Not Available. Wait for it… Log in to our website to save your bookmarks. It could also be a new company, so it has a scant market history and hasn't yet met the criteria to be listed on a major exchange. Penny stocks are volatile and risky by nature, and they're especially susceptible to price manipulation.
Once in a while, however, a penny stock will greatly reward the risk-hungry investor. If you're intrigued by the potential to find such exponential gains, it could be worth diving into the murky waters of penny stocks.
Investors should conduct thorough due diligence before taking chances on any penny stock. For example, it might have looked like a good bet to invest in the ailing Walter Energy Co. The stark contrast between these two stocks lies in company fundamentals.
Walter was an established company in metallurgical coal, an aging sector prey to cyclical demand and political pressures. When world leaders made commitments to lowering greenhouse emissions, this placed more downward pressure on Walter Energy, which already was reeling from a worldwide coal supply glut and slowing demand from China.
Walter ended up selling its assets to two companies in By contrast, Inovio is a speculative biotechnology play with strong partnerships in its cancer vaccine portfolio, which offers strong buyout potential. As of , a buyout hasn't happened, but the stock continues to sell off and then see huge upside moves that quickly dissipate.
You should have the complete picture as to why the stock's trading at its current price before you even think of buying it. Just like with any stock purchase, when considering buying penny stocks, fundamental analysis and due diligence of the company's management quality can help lead to the winners and avoid the losers. Because this period is marked by a slew of start-up firms particularly in tech or biotech , all of which have high costs and little-to-no-sales to date, most of these companies will trade at very low prices owing to their speculative nature.
The perfect example is the tech boom and crash of the late s. Many tech startups started life as penny stocks and then experienced astronomical gains in their market caps and valuations as investors snatched up anything related to the then-novel concept of the Internet. Industries that offer binary outcomes for most of its companies will unsurprisingly contain a plethora of penny stocks.
The Canadian TSX Venture Exchange was the home of many resource-based penny stocks that took off during the commodity boom of the s. Then the party ended, and most of the stocks crashed back to nothing, similar to many technology stocks in the crash.
However, traders can still take advantage of binary-type companies when conditions are favorable, such as when commodities are booming. But investors in these areas must also realize that the stocks can fall just as quickly as they can rise. More importantly, experienced and ethical management that have a vested interest in the company via share ownership can provide investors with a sense of security.
Of course, superstar managers aren't often found working for penny stock companies, but there are a few examples. Penny stocks are extremely volatile and speculative by nature. As most trade on OTC exchanges or via pink sheets, where listing standards are lax, penny stocks are susceptible to manipulation and fraud. Still, the potential to make large returns is a strong allure, driving risk-taking investors into taking positions in these securities.
He's the first to admit that it's a risky strategy. And it's not for everyone. He spends the entire trading day in front of a computer screen, in order to buy and sell stocks at the right time. He is sometimes in and out of stocks within minutes, and the longest he ever holds shares is a few days.
So why trade penny stocks? Many of these companies are speculative because they are thinly traded, usually over the counter instead of on major exchanges like the New York Stock Exchange.
The Securities and Exchange Commission warns that "investors in penny stocks should be prepared for the possibility that they may lose their whole investment. Plus, penny stocks are notorious for being part of so-called pump-and-dump schemes , in which scammers buy up shares and then promote it as the next hot stock on blogs, message boards, and e-mails.
Once the stock price is artificially pumped up by all the talk, the scammers sell their stake, leaving unsuspecting investors with big losses.
Related: 5 most common financial scams. But Grittani has been able to profit because it's such an inefficient market. He knows what to look for and recognizes how to make money out of pump-and-dump scams without doing any pumping or dumping himself. When investors short stocks, they borrow shares and sell them with the hope of buying it back later a lower price and pocketing the difference.
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