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What are Penny Stocks?

This article was posted on May 7, 2009

Penny stocks are shares listed in nse bse that trade from a fraction of a penny to 20-30rs and having a small market cap. They are riskier as compared to large cap stocks, but give handsome profits in the long run. The long term profit given buy a penny stock varies form 10% to more than 200% or even more. Indeed, some penny stocks have gone from 0.50paise to 100rs+, while others have become worthless.

Large number of investors in India and other countries like penny stocks because it does not take a big cash amout to get started, and one can have a share in a good company that is likely to do well in the long run.

In the past penny stocks have had a bad name because of the lack of information of the company.

Nowadays, investors are quickly learning that penny stocks represent all the small companies across NSE and BSE, that are making good profits year on year and growing continuously. Moreover to nowdays investor avail the information about the profit and loss of any small company very easily.

The upside of penny stocks is the ability to turn a small investment into a fortune.

The downside is the risk, volatility of the shares, and the lack of corporate transparency.

Past Golden penny shares that turned into Large / Mid caps:
1. Ansal Housing listed on NSE BSE traded around 5rs in 2004 and it touched 450 in mid 2006. Upside seen is 8000% ++

2. Country club listed on BSE traded around 9.5rs in June 2005 and touched 1000 on 1st Jan 2008 Upsided seen is 11,000% ++

3. Subhash Projects listed on NSE BSE traded around 6.50rs in 2003 and touched 500 in Jan 2008 upside seen is 7590% ++

4. Prajay Engineers listed on NSE BSE traded around 3.4rs in August 2003 and touched 400 in Dec 31 2007 upside seen is 11,600% ++

5. D S Kulkarni listed on NSE BSE traded around 5.50rs in September 2003 and touched 400 in April 2006 upside seen is 7172% ++

6. Subhash Projects listed on NSE BSE traded around 8.20rs in July 2002 and touched 520 in Jan 2008 upside seen is 6241% ++

The profits of the above mentioned companies have almost doubled YoY. It is rightly said by “Warren Buffet - If a company does well the stock eventually follows”.

Here at NSEGUIDE we will present you with Small companies that have been posting good profits YoY, and we hope that they will give you good returns in the Long run.But one should always remember that these stocks involve risks. Hence we recommend you to read our Disclaimer before making any invesmtents in the stocks mentioned by NSEGUIDE.

83 Responses

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  1. Sundar Says:
    January 9th, 2012
    Posted at: 8:51 pm

    During 2007 , the GMR infra increased 300 Rs in a single day now it is trading @ just 25 Rs. , Indowind Energy was trading @ 200 Rs now it is below 5 Rs. Likewise I could give so many examples.

    The point here is don't look at the past performance or price level , Consider the present situation

    if one guy makes profit in a single stock that would become his favorite stock and he will keep buying that stock only , This is a big mistake.

    My friend's favorite share is unitech , he accumulated more no of unitech shares @ 400 , now see that price.


  2. kapil Says:
    March 25th, 2012
    Posted at: 11:50 pm

    kindly suggest me any two or three penny stocks where i could get handsome returns. I have suffered a great loss of rs 50000 in this financial year.


  3. CB Says:
    March 25th, 2012
    Posted at: 11:53 pm

    Hi kapil, sorry to hear about your loss. hope you recover it soon. can add control prints, smartlink, confidence petro for med/ long term


  4. jayan Says:
    June 10th, 2012
    Posted at: 1:23 pm

    hi
    could u tell me some good penny stock for next years?


  5. jayan Says:
    June 10th, 2012
    Posted at: 1:25 pm

    hi
    could u tell me some good penny stock for next years? in which range i can enter it?
    \


  6. CB Says:
    June 10th, 2012
    Posted at: 1:34 pm

    Hi jayan, can add some of jvl agro and nila infra. these are good bets.


  7. prasad desai Says:
    June 14th, 2012
    Posted at: 12:05 pm

    Sir, is rpower is good stock for long term ?


  8. Anwar ali Says:
    July 28th, 2012
    Posted at: 8:48 pm

    sir,is surya pharma a good stock? pls tell me


  9. CB Says:
    July 28th, 2012
    Posted at: 9:12 pm

    Hi prasad desai, yes, its fundamentaly a storng bet

    Hi Anwar ali, its in a downtrend as of now. don't enter it yet.


  10. Paritosh Says:
    September 27th, 2012
    Posted at: 2:56 pm

    Hi CB, I need to invest a fraction of my capital in penn stocks, can you recommend one or two? Thanks...


  11. Dpatel Says:
    December 6th, 2012
    Posted at: 1:21 pm

    I think ANUS LAB is good for this


  12. parikshith Says:
    January 17th, 2013
    Posted at: 10:42 am

    am beginner and I wanted t know about how to invest on penny stocks after I opened demat account..can you please help...? :)


  13. anupam Says:
    August 28th, 2013
    Posted at: 8:20 am

    i have purchased 3000 shares of arrow textile and 2000 shares of d q entertainment international. plz suggest me that should i continue to hold these stocks


  14. L L vyas Says:
    March 15th, 2014
    Posted at: 10:59 am

    hi cb please sugested .....1 share those a good company ..well captilised ..& the prmoter was a good man with management....the share was run behind 1 _ rs range...and more upside...5000%


  15. CB Says:
    March 15th, 2014
    Posted at: 11:35 am

    Hi L L vyas, nila infra is a good long term bet. not sure of any stock below 1rs.


  16. firdaus Says:
    March 27th, 2014
    Posted at: 4:32 pm

    Vision Cinema - entered at 2.30 & exited at Rs 11....now if it comes back then I'll re-enter. Any other suggestion?

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