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Blog : When You Think About Penny Stocks, Think About Ford
November 2nd, 2009
Usually, the idea of penny stocks conjures up images in peoples' minds of shady, 3 cent companies run by dishonest scam artists. I won't go so far to say, "this couldn't be further from the truth," because in actuality, there should be some of those concerns.
However, there are plenty of well-run, high quality companies that are trading in penny stock territory simply because the shares are undiscovered, overlooked, or their underlying corporation is new.
These are precisely the types of penny stocks we find through Leeds Analysis. One such company we recently selected is not generally considered a "penny stock" by most people, but it was in fact trading in penny stock territory.
That selection was Ford Motor Company (F). When we reviewed it, the shares were trading at $1.88, a definite penny stock. As it was trading below the $5 threshold, it fell into our sphere of research.
At the same time we also reviewed General Motors (GM), but it did not even come close to passing Leeds Analysis. Ford did, however, excel in our test, and we provided the full profile to subscribers of our Peter Leeds newsletter.
Since that day, GM went on to declare bankruptcy, just as we expected it would, due to the combination of brutal financials and the drastic economic downturn.
Ford on the other hand soared higher, ramping up from $1.88 to $8.86 in a matter of months. Our subscribers could have profited as much as 370%, and based on today's earnings surprise by the company, we expect more upside.
Ford is no longer a penny stock, but it was in March. It's not the typical type of company people think about when they think of penny stocks, but for Peter Leeds subscribers it was just another high quality investment option among the pennies that other people were overlooking.