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  A penny stock is one that trades at a low share price, generally under $5 a share. These stocks often trade on the over-the-counter or pink sheets exchanges. They are speculative and high risk as they have low capitalization, lack liquidity and have a limited analyst following. However, there are tools that alert you about penny stock gains, losses and potential investments.
  
  

Global Penny Stocks

• Global Penny Stocks is an online advisory newsletter that informs you about potential penny stock trades. Global Penny Stocks specializes on stocks trading at or under $5 a share. Kathy Yakal reported in Barron's in April of 2002 that "...we first encountered [GPS] in 1997. It's continued to grow and improve..." She continues to write that "anyone serious about penny-stock investing should have a subscription to Global Penny Stocks. This is no fly-by-night site." GPS has a track record dating back to 1997, and the company claims that 70 percent of all penny stocks they have invested in have 50 percent gains or higher.
  
  

Stock Preacher

• Stock Preacher is a free information service featuring penny stocks and small-cap stocks (companies valued at $300 million to $2 billion). This service offers articles and charts on featured companies for research purposes. Subscribers to the free newsletter will receive updates on a daily basis. Stock Preacher has an online chat where subscribers can interact. An archives section is available to read previous stock alerts and information. Also, the newsletters are sent prior to the stock market's opening bell, which may allow you to become more informed on a possible investment.
  
  

Expert Insight

• Andrew Beattie, managing editor at Forbes Investopedia, says that people tend to invest in penny stocks because of the low share price. But this can be a downfall. According to Beattie, companies with small operations tend to be riskier investments. They may not be held to the same standards as larger companies and may not file with the Securities and Exchange Commission (SEC), which means their financial history may be unavailable. Furthermore, Beattie explains that "An [initial public offering] could also be an attempt by the company's owners to offload their ownership to investors because they see little promise in the company's future." Beattie tells investors to just stay away from these stocks all together.
  
  

Warning

• Please consult your financial adviser before investing in penny stocks. Investments carry risk with the potential for loss. Global Penny Stocks and Stock Preacher are intended for informational purposes only and do not act as investment advisers.