Which penny stock should i buy

Screening Filters

1. Market Capitalization: 50M – 1.5B USD

   • Purpose: Focus on small-cap companies while avoiding the tiniest, most illiquid micro-caps.
   • Rationale:
     • Penny stocks are typically smaller companies, so a cap under ~1–2B is common.
     • Setting a minimum of 50M filters out ultra-tiny firms that are often shell companies, highly speculative, and easily manipulated.
     • This range keeps exposure to “real” but still early-stage or smaller businesses, which is consistent with typical penny-stock investing.

2. Share Price: 0.50 – 5 USD

   • Purpose: Define the “penny stock” universe by price.
   • Rationale:
     • In practice, many investors call anything under $5 a penny stock, even though the strict SEC definition is under $5 per share.
     • The upper limit of $5 directly targets that common definition.
     • The 50-cent minimum excludes the very lowest-priced names (sub-penny or near-zero stocks) that are often distressed, at risk of delisting, or extremely speculative.

3. Monthly Average Dollar Volume: ≥ 500,000 USD

   • Purpose: Ensure there is sufficient trading activity and liquidity.
   • Rationale:
     • Penny stocks can be very illiquid, which makes entering and exiting positions difficult and increases slippage.
     • Requiring at least $500K in average dollar volume per month weeds out thinly traded tickers that may move wildly on small orders or be prone to manipulation.
     • This makes the results more practical to actually buy and sell.

4. Moving Average Relationship: PriceAboveMA20

   • Purpose: Bias toward stocks with positive short-term price momentum.
   • Rationale:
     • When price is above its 20-day moving average, it often indicates that recent trend is upward or stabilizing rather than sharply declining.
     • Among penny stocks, this helps avoid many that are in clear downtrends or collapsing, and tilts the list toward names showing at least some strength or recovery.

5. Exchange Listing: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Restrict to better-regulated, major U.S. exchanges.
   • Rationale:
     • Many penny stocks trade OTC, where reporting standards are lower and risks of fraud or poor disclosure are higher.
     • Limiting to NYSE, NASDAQ, and NYSE American improves baseline quality: stricter listing standards, ongoing reporting requirements, and generally better corporate governance.
     • This makes the list safer and more investable compared with the broader penny-stock universe.

6. Quarterly Revenue YoY Growth: ≥ 0%

   • Purpose: Focus on companies with at least non-declining revenue.
   • Rationale:
     • Many penny stocks are in decline, with shrinking sales and deteriorating business fundamentals.
     • Requiring year-over-year revenue growth at or above zero filters out companies whose top line is shrinking.
     • This doesn’t guarantee quality, but it does tilt you toward businesses that are at least holding steady or growing rather than clearly deteriorating.

Why Results Match Your Request

• The price filter (≤ $5) directly targets the common definition of penny stocks.
• The market cap and exchange filters keep you in the realm of smaller but established, exchange-listed companies, instead of the riskiest micro-cap OTC names.
• The volume and MA20 filters improve tradability and focus on stocks with better liquidity and at least some positive price behavior.
• The revenue growth filter adds a basic fundamental quality screen, helping you consider penny stocks that aren’t obviously in decline.

Together, these filters refine “penny stocks” into a more investable subset: low-priced, smaller companies with sufficient liquidity, listed on major exchanges, and showing at least stable fundamentals and some technical strength.