The penny stock market is like the minor leagues in professional baseball. In this space, former high- and mid-priced stocks compete for the possibility of returning to a higher level. Also, it is where new stocks vie for a big break.
The emergence of 5G — 5th generation — communication technology has energized investor interest in 5G penny stocks. Any company with a connection to super-fast 5G communication technology has a chance of sharing in the growth. Are you interested? Here is a list of 5G penny stocks with great growth potential.
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Overview: 5G Penny Stocks
Investors once considered penny stocks to be any security trading under $1. The Securities Exchange Act of 1934 changed that. The Securities Exchange Commission used this law to establish the penny stock trading rules and set the penny stock price classification at $5 and under. You can trade these stocks over the counter (OTC) or through any of the major exchanges.
Penny stocks’ low prices allow easy acquisition. This helps investors control their risk while gaining exposure to possible exponential gains. In many cases, you can buy 5,000 shares of a penny stock for $200 — $0.04 per share. A $0.20 per share increase would give you a 500% profit or $1,200. If the company goes bankrupt, you only lose $200.
Installing 5G super-fast networks has the power to boost the fortunes of technology and telecom companies — big and small. Penny stocks provide investors a low-cost way to share in this growth.
Trading in the penny stock market, however, can be highly risky. Relying on luck and tips is a strategy for failure. 5G penny stock trading requires you to be as informed as you can.
Best Online Brokers for 5G Stock
Finding relevant information on certain 5G penny stocks can be challenging. By providing extensive research material and historical data, online brokers can help you improve your due diligence. Here’s a list of some of the best online brokers.
Features to Look For in 5G Stock
- Earnings per share: Many 5G penny stocks have poor earning-per-share numbers. However, this metric is a good way to access the strength of the 5G company. It earmarks the amount of money available to pay shareholders after discounting all expenses, taxes and deductions. The calculation for the earnings per share is the net income minus the preferred stock dividend divided by the outstanding stockholder shares.
- Transparency: When investigating a penny stock, get accurate information. Exchange-traded penny stock companies must meet minimum listing standards. However, over-the-counter (OTC) traded companies have no minimum requirements. Some of the companies haven’t built a track record yet. Others may have products in the development stages. Either way, your risk factor tends to be lower with transparent 5G penny stocks.
- Net revenue: Net income is a sound financial measure of success for a 5G stock. It is the amount of revenue remaining after you subtract all deductions, taxes and costs. Many times, it is the most solid metric you can find for many 5G stocks. Net income can give you a good indication of a penny stock’s past performance. But, it only hints at how a stock will do in the future. Use it with other factors.
Qualities of a 5G Penny Stocks Investor
The penny stock market can be treacherous for the unprepared and reckless. It takes an investor with a high-risk tolerance to trade these securities. Developing a good risk management strategy will serve you well. With the proper preparation, you can use 5G penny stocks to gain exposure to the growth potential of the 5G era.
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