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Stocks struggled for the second day in a row yesterday, but
telecommunications stocks did well following an earnings report
from prepaid wireless provider MetroPCS Communications(NYSE:PCS), which showed first-quarter earnings more than doubled, thanks to the best-ever quarter for customer additions. MetroPCS gained 10%, while ATT(NYSE:T) was up 2% and Verizon Communications(NYSE:VZ) was up 0.4%. Sure these gains are good enough for well-known, large-cap stocks, but if you’re interested in truly outsized gains,
why not consider looking at some penny stocks in the sector?

The stocks on our communications penny stocks list might not be
what you would consider “true penny stocks.” But micro-cap pink
sheet or OTC stocks that cost only a few cents per share are
incredibly risky investments, which we do not advocate. These
stocks are a little bigger, and therefore a little safer, but they
still have the ability to deliver some spectacular gains when the
bull picks up steam again.

Penny Stocks are stocks traded for under $2 and they represent the small cap companies. They trade on the OTCBB so you will not find them on the major stock exchanges. They are very cheap stocks and normally come for businesses needing capital. They are a very risky investment as the business can go under and leave you with a stock worth nothing. However that being said penny stock trading can be a great money maker, and there are numerous traders who make 6 figures and more from them each year.

The best reasons to trade in penny stocks are the fact that they do not require a large initial investment, meaning that they are an affordable investment for many. Penny stocks are cheap. For example if you were to buy 1000 shares in a company with shares at 10 cents, you would only require an investment of $100, whereas if the shares cost $5 you would require an investment of $5000. Penny stocks also have the potential of huge gains, and have been known to rise as much as 1000% daily. Therefore your $100 investment can be worth $1000. This is very unlikely to happen to other stocks from large cap businesses.

 

Article source: http://community.nasdaq.com/News/2011-05/7-communications-penny-stocks-to-buy.aspx?storyid=74092