4 March 2008
Lagos — An investment analyst, Mr Oluwasanmi Akindipe, has urged Nigerians to take full advantage of the growing capital market by engaging in penny stocks acquisition or trading.
At a seminar on "Secrets of Making Mega Bucks via Penny Stocks and Shares," Akindipe, who defined Penny Stocks as stocks that sell from N5 and below, said it is possible to become a mega millionaire trading in penny stocks, adding that, penny stocks can also be called minor stocks, mini-stocks, small cap stocks or low-priced stock, which though small, but mighty.
He said "it is, however, important to study companies, so as to identify some under-priced stocks and take advantage of the subsequent capital appreciation."
Akindipe, who is also President of the Young Millionaires Academy, advised intending investors that; "before picking a penny stock, one should ensure that the company has a good profitability, low volume or number of shares, good growth in turn over and profit after tax, debt free and good management. The past five-year financial report should be free of ˜financial cancer," he said.
He said Penny stocks are stronger indicators of the movement of the economy from recession into boom. "For instance, take a look at the insurance sector, all the stocks were penny, due to the reform in the sector early 2007 and the stock moved up a month immediately after the first quarter of the year.
They, therefore, reflect the economy better," he said. Akindipe advised investors to acquire the services of a good stock broker, "who will perform your mandate religiously from the background of his professionalism, because picking penny stock successfully might not be as easy as you think. It is possible not only to burn your fingers in penny stock, but all parts of your body if you are trying to invest in it without research and expert advice. Failure to heed this advice may make you burn your fingers trying to trade in what you know little about. However, remember that the higher the risks, the higher the returns."
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