the haney group, Penny Stocks: How to Investigate Them and Avoid the Traps
Information is the investor's best tool when it comes to investing wisely. But accurate information about "microcap stocks" -- low-priced stocks issued by the smallest of companies, often called "penny stocks" -- may be difficult to find. Many microcap companies do not file financial reports with the SEC, so it's hard for investors to get the facts about the company's management, products, services, and finances. When reliable information is scarce, wrongdoers can easily spread false information about microcap companies, making profits while creating losses for unsuspecting investors.
This Financial Guide gives you the basics about microcap or "penny" stocks, discusses how to find information on them, and points out what "red flags" to watch out for.