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Penny stocks have gotten a lot of attention from the media this year.
We have seen Robinhood investors drive some ridiculous moves in low price stocks that ended badly when reality interceded… One of the best examples this year is Eastman Kodak Co.
The stock went from being an irrelevant $2.10 bankrupt company on July 24, to as high as $60.00 per share just five days later on July 29.
This insanity was driven by speculative retail investors who probably didn't start buying until Kodak was $10 or more… And if they haven't exited the position yet, they're sitting on some pretty hefty losses now that KODK is only trading for about $8 per share.
All that being said, this does not mean we should quit looking for low priced stocks with the characteristics that could lead to massive gains.
When these low-priced stocks begin to move, and the big institutional money realizes these are real companies with growing profits and sound balance sheets, their buying pressure can drive the shares higher than you ever imagined…