Quality in Canadian penny stocks

Article Excerpt

“Penny” mining stocks are some of the riskiest stocks you can buy. These companies are trying to find mineral deposits that can be mined at a profit, and such finds are exceedingly rare. Because of this, it’s even more important to look for investment quality in Canadian penny stocks. It may seem contradictory to use the terms “investment quality” and “Canadian penny stocks” in the same sentence. However, there are even wider disparities in the investment quality of penny mines than in better-established companies. For instance, we automatically rule out investing in penny mines that promote themselves too aggressively or do so misleadingly. The mine-finding effort is more likely to succeed if the managers focus on finding a mine rather than hyping their stock. We like to see a mine-finding effort that focuses on geological probabilities and doesn’t simply attempt to piggyback on the popularity of mineral areas that are in the limelight because of a recent rich find. It is…