Where can I find out if a stock is a "scam" stock or not?
Is there a list online of pink sheet, pump & dump, penny stocks? That would be pretty useful for helping people avoid these scams!
Penny stocks can be dangerous. One website I like to use is investorshub.com. If you search for the stock (by ticker symbol) there, it will provide you with a discussion board for the stock. You can see what other people have to say about it, and there is also typically an information box that can be updated with news and information on the stock. It's been useful for seeing the company's recent activity and press releases.
Vashal has provided very good answers in researching a stock. If you check the ticker symbol on Share builder or Scott Trade, it will give you information about a company. Legitimate companies have an address, phone number, and a website discussing what the company does, and their latest projects. Penny Stocks can be rewarding and profitable, but at the same time very risky. I would recommend one does their due diligence when considering any investment.
Stocks are one area of investment that you really want to do your homework. In the US, the SEC requires that the financial information for a publicly traded company must be clear and as reliable as possible. Learn to read financials, learn how to do the ratios and follow the history in a company. If your just getting into stock investment, stick with solid companies that are well known and well managed. Once you build a portfolio, then play with the penny stocks.
All the big investment hubs, CNNMoney, Wall Street Journal, even Fool.com are great places to do your research. Your broker probably also has tools available to help weed out the good from the bad.
Penny Stocks naturally bring high risks. I would look at stocks around $5 with proven growth in revenue first. It is never too late to enjoy the ride. I did this with RIM. Bought at $7.00 as I could see proven revenue growth and got out at $161 after 5 splits. So, you see it is never too late. The higher price better guarantees results.
Check out my hub. I've listed a good site that contains tons of information about penny or pink sheet stocks.
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