Investing in Low-Priced Stocks

Investors come to the market with different goals and objectives, but many have one thing in common: an appetite for the excitement and volatility common to stocks that are priced below $10 a share. By nature, low-dollar stocks have a large degree of obscurity, due in part to the lack of institutional following and news coverage of their companies. Much to our delight, the result is an under-followed universe of stocks that have the potential to become big winners in the future.

We have spent a lot of time here at TheStreet.com developing a service that would provide investors with guidance into this profitable, but volatile space of the market. Our goal is to bring you unbiased, profit-driven analysis and commentary that removes the fears and unknowns of undiscovered stocks, ultimately making you money and enabling you to become a better investor.

To achieve this goal, we've developed an alert-based service called Stocks Under $10. We create and manage a model portfolio of single-digit stocks, send out timely alerts on breaking news, earnings, potential catalysts and analyst actions for our portfolio stocks. We also offer an overall sense of the Under $10 space. (Under our guidelines, 80% of our model portfolio stocks must be priced below $10 a share when we make a purchase.)

Given the sheer volume of issues in the Stocks Under $10 market, we cull the list by running a screen for stocks that meet a set of minimum criteria: Stocks must have market capitalizations of at least $100 million, 30-day average trading volumes of 100,000 shares and a current price greater than $1 a share. These requirements, which sometimes limit our selection process, set a frame work that keeps us from investing in bulletin-board stocks that can be easily manipulated by Wall Street at the expense of the investing public.