Some Penny Stocks Are Big Businesses

[Teacher]

Penny stocks are suspected to be dangerous and fly-by-night companies.

However, it is a fact that many of them are actually big businesses, making profits and paying dividends.

They are quoting at penny stock valuations because of a variety of reasons, including a temporary downturn in their businesses.

Some names of stocks which are running businesses but whose stocks are quoting at low valuations include Trident Ltd, Kesar Petro, SPML Infra, Ginni Filaments etc.

We should try to find penny stocks which exhibit some or all of the following characteristics:

• Strong management teams
• Good upside potential
• Proven revenues
• Patented technologies
• Solid financial trends

Such stocks can be the most lucrative way to make money from the stock market.

Why are high-quality stocks quoting at penny valuations?

There could be several reasons why traditional investors feel shy of investing in penny stocks and keep away.

Such stocks are usually:

• Overlooked
• Undiscovered
• Unfairly valued
• Sold off in sympathy with a sector or the overall market

[Shivarama Karkala]

I have 5000 shares of Ginni Filaments in portfolio. Is it a good stock? Any multibagger chances?