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Five Penny Stocks for 2010

Updated with Jan. 29 closing stock prices

By Jamie Dlugosch of Investor Place

In the aftermath of the bear market, there is no shortage of companies priced under $3 per share, but to successfully take advantage of the abundance of opportunities, you need to pick stocks based on the following criteria

  • Look for companies with market capitalizations that are less than $500 million. You want stocks trading on a U.S. exchange, not shell companies.
  • Find stocks with a reasonable business behind the stock.
  • From there, look at fundamental value combined with technical analysis. Volume is important, and you want to be buying on weakness and selling on strength. (See also: The 6 Rules of Penny Stock Trading.) Based on these criteria, then, here are five penny stocks that belong in any portfolio. Yes, there is a high degree of risk with these picks, but, so too, is the potential reward.

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SYM TRADE IT LAST %CHG
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DENN $10.88 2.93%
MGI $8.05 -3.01%
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