Which are the top profit-making penny stocks in India right now?
As per Equitymaster's Stock Screener, here is a list of the top profit-making penny stocks in India right now...
These companies have been ranked as per their 3-Yr profit CAGR (compounded annual growth rate). The higher the profit growth, the better.
The shares of these companies are also priced at or below Rs 100.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
What are penny stocks?
Penny stocks are shares of listed companies priced below Rs 100. In the US market, these stocks trade for less than a dollar i.e. for pennies. Hence the name.
Penny stocks have the potential for above-average returns. However, they are extremely risky. Therefore, investing in them requires care and caution.
How should you go about investing in penny stocks?
Penny stocks are usually issued by new or very small companies. These companies often don't have a proven track record, which is why their shares are sold for so little.
Larger, more established companies may also have stocks trading under Rs 100 when they are facing financial trouble or approaching bankruptcy.
Since they carry a high amount of risk, one must have a proper strategy in place.
Check out our framework for investing in penny stocks. This strategy is the easiest one to make money from penny stocks.
How much should you invest in penny stocks?
Penny stocks are not suitable for investors who have a low-risk appetite.
However, even if you have a high-risk appetite, we believe one should not invest more than 2-3% of one's stock portfolio in penny stocks.