Information SourcesUnderstanding Penny Stocks

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Media Bites

The media has had a lot to say about penny stocks in recent years, and because of my involvement with the industry I have kept an eye on the news.

This section includes a selection of some of the articles and comments related to penny stocks that have been in the media recently.

Personally, I have been interviewed on the radio and quoted in the newspapers for my revolutionary theories and approaches to investing in penny stocks, and have written and published such books as Stocks That Will Make You Money.

In addition, my writing and theories have been incorporated into and displayed upon nearly twenty different financial websites. I am frequently contacted by media organizations for comments, live interviews, and discussions.

My comments and select quotes have been picked up by media sources from North America to Australia.

Barron's Newspaper reviewed PennyStocks.com in their April 22, 2002 edition. Below are some of their comments.

A brainchild of Peter Leeds, who has written books on penny stocks and provided content to related Websites... It's updated daily, and chock-full of tips for serious small-cap investors.

Leeds's approach works for investors who like to be told what to invest in and why, by someone who has already done the legwork - and who has a credible track record. He makes a weekly pick, for which he provides a full report and links to research data.

Also, Leeds follows up on past picks and general market news. Special articles and reports help you further understand the market as you develop a small-cap strategy. And Leeds's watchlist notes stocks that may yet have potential - just not today.

You can view the individual performance of Leeds's picks at the site; he claims an overall 140% average gain since the service's inception in 1997.

...as for traditional penny stocks traded over the counter, experts say they have always been volatile - and risky - because the companies behind them often are still in their development phases.

"About 95 percent of penny stocks are bad investments," said Peter Leeds, president of PennyStocks.com, an Internet publication with several thousand subscribers.

Nevertheless, there can be gold in some low-priced stocks - if the investor has patience and a knack for picking companies on the rebound, Leeds said.

For instance, his publication picked USANA Health Sciences as a sure bet for recovery last December when the company's stock was at $1.15.

Its shares closed yesterday at $6.20.

I was asked by the Associated Press to comment on the Enron situation. Below is an excerpt from the interview. (Also see the Enron Case Study in Chapter Five of Understanding Penny Stocks).

Peter Leeds, president of PennyStocks.com and author of "Stocks That Will Make You Money," said penny stocks should be discovered before anyone else recognizes a good deal — not bought on the cheap after falling from lofty heights.

Enron descended into bankruptcy in December amid allegations of accounting abuses that included hidden debt and inflated profits. Shares that approached $90 each in the fall of 2000 plummeted to less than a dollar, leaving workers and retirees with depleted 401(k)s that had been loaded with Enron stock.

Leeds said penny stocks are particularly volatile, and 95 percent of them are poor investments. His company tries to find the 5 percent with realistic upside potential, using criteria that include a proven management team, growing revenues and earnings, a low or nonexistent debt load, patented technologies or innovations, and market dominance.

"I would say that Enron falls well short in all of these categories," Leeds said. "From our perspective this rules out the stock many times over."

He said Enron meets the criteria for high trading volume and brand recognition. But the volume decrease since January makes it more difficult to profit from speculative trading. And the name "has a negative connotation and so is an additional strike against the stock," Leeds said.

Even Enron officials have said they will leave the name behind as it reorganizes to focus on its natural gas pipelines and power operations and tries to emerge from bankruptcy.

When I was interviewed by KPHN live radio about penny stocks, the host of the Total Business Show, Scott Simon, asked me to share some of my favorite penny stock success stories. I gladly brought up Bre-X.

While the majority of people have a negative connotation about the stock (the reasons for which are detailed below), I explained that it was actually an excellent investment from the perspective of penny stock investors.

You see, it was the penny stock traders that made excessive profits (and I do mean excessive - hundreds of dollars turned into millions) from the stock, while the more conservative and 'safe' investors were the ones who got so badly burned by getting involved late at high prices.

To read more about this incredible penny stock story, be sure to check out my Bre-X Case Study from Chapter Five of Understanding Penny Stocks.

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