Investing in penny stocks, I discovered an initial excitement over bankrupt stocks. I felt the companies who were bankrupt under Chapter 11 would come back stronger and more valuable once the company has restructured or completed the guidelines established under Chapter 11 requirements. To my detriment, my investments in bankrupt companies all went south. A bankrupt company doesn't always make it out of Chapter 11. Many will fail. Stock investors then hold worthless paper.

Knowing how to identify bankrupt companies among penny stocks will eliminate companies from your research that may not offer the most opportunities for profit in the near term.    There is enough to do researching the companies falling within your criteria.  When you research penny stocks, you will find many symbols with a Q on the end. The Q signifies the company is in bankruptcy. They are companies best to stay away from. Knowing this helps identify the best companies to consider much earlier without alot of research spent on bankrupt companies for the most part are worthless.

You are money ahead staying away from the Q companies as I call them. It was a lesson I learned way too late to prevent losses in my portfolio.

Knowing what to look for and not look for is important to your success in penny stock investing. Best to each of us as we find gold in the penny stocks.