If you want to find really cheap stocks that might be on the verge of exploding, here are some things to learn.
Why do penny stocks make large moves? Penny stocks have small market values so just a little bit of buying can make these stocks move hard and fast. Penny stocks are often exciting new businesses starting out and when investors learn about them, the companies can grow fast.
Where do you find penny stocks? Penny stocks are found on the Pink Sheets market or the OTCBB.
On the Pink Sheets and SEC Edgar database, you may find a lot of information on the penny stock company as well as the company's annual and quarterly financial reports. You can look at the ratios and price/earnings, revenue to market value, working capital per share, and other data on there. The company's website can also give you a good idea of the business and their stock structure.
You are looking for penny stocks that may be about to explode. You're not looking for future possibilities. It's wise to trade penny stocks as short term investments rather than long term investments.
To find these kinds of stocks, it is a good idea to sign up for a penny stock newsletter or service that offers free ideas and tips. There are many all over the internet. Just make sure to do your research on the company prior to investing any of your money. Always invest as much as you are willing to lose as no stock is a sure thing.