Penny Stock Research In Light Of The High Cost Of Raising Cash While raising cash is important, it’s also important that it not take place with share dilution as the consequence. Tight market caps are critical, else proceeds will be spread over an inordinate number of shareholders. You absolutely need to understand that share price is not always a reliable guide. A more “expensive†stock, in absolute nominal terms, can actually be a better value where the outstanding shares are favorably limited. As a general rule of thumb for your penny stock research, note that finding a company with a market cap under $50,000,000 is ideal. Junior miners can even have market caps of 100 or 200 million or so. But, you want there to be ample room for the market cap to increase as the company matriculates through the mining cycle. While this can sound intimidating, it’s really pretty simple. And you’ll soon see that mining stocks offer potential returns that are far and away light years beyond what you’d make with a basic bullion fund. Penny Stock Research – Who’s Who In The Zoo With You? Another key factor in your penny stock research is to examine the degree of insider share ownership. You absolutely want the company principles to hold a decent part of the company. If they don’t own at least a tenth of the company, I pause for closer examination. It’s not necessarily a deal killer, but I really would want to know why they don’t believe in their efforts enough to take a sizeable stake when it can be had for cheap. When you start to see a young company that is more like 15% self-owned, that’s a really good sign. Running with that theme, let’s take a look at just how you, too, can own a major stake in a young company if you want to. Frankly, I’ve personally bought 1,000,000 shares of a company in one sitting. I have to confess that it is an exhilarating feeling. Let’s say you find a promising company with 13% insider ownership and you know the management has a proven track record. If you get in early, let’s assume that there are just 30 million outstanding shares currently selling for $.05 each. Purchasing just 300,000 of those 30,000,000 gives you a full 1% stake in that company for just $15,000. I not suggesting it would be wise to put $15,000 in one junior exploration play. However, you can see how climbing aboard well-researched, solid potential stocks early in the game presents unique opportunities. And, depending on the size of your portfolio, $15,000 in one company may just represent a reasonably balanced position size.