CarawayBraun289

Christmas and (insert your favorite holiday here) come but once a year earnings season on the other hand, comes four times a year. And even though earnings season may be devoid of streamers, balloons and cake...the outcome can be just as festive for penny stock investors.

Whilst blue chip giants are bemoaning the begin of earnings season this week, those interested in penny stocks or modest-cap stocks have cause to cheer...or at the very least, be really optimistic.

Soon after nearly six years of strong functionality, small-cap stocks headed into 2005 with many business analysts saying the honeymoon was over. Small-cap rates have been too wealthy they mentioned...the Johnny-come-lately lemmings had been also a lot of...and the bargains too handful of.

Not surprisingly, penny stocks sailed by way of 2005, beating their larger counterparts by an equally massive margin. For the 12 months ended May possibly 1, 2006, the Russell 2000 index of modest-cap stocks returned 31.5%, compared with 14.1% for the Normal & Poor's 500 index of big-company stocks.

The longer view is even more impressive. Since March 2000 (the official start of this rally) the Russell 2000 index has posted an typical annual return of 7.three%, vs. -.6% for the S&P 500.

Clearly the penny stock soothsayers are i) not worth listening to ii) not invited on my honeymoon.

Now, just due to the fact penny stocks have been performing properly does not imply that earnings season is a foregone conclusion. In addition, you can't examine the benefits of your favourite penny stock pick with those of the blue chip juggernauts.

For example, earlier this week a single of the market's bellwether stocks missed its income forecast for the quarter. Analysts pounced noting that the company's share price tag "tumbled" 4% on the news. One more company's missed forecast sent its stock "plummeting" four.7%.

Penny stocks don't tumble or plummet four%. In the planet of penny stocks, a daily drop or achieve of five% - 8% is commonplace. Now, should the penny stock on your radar screen climb 10%, 20%, or 50% on powerful earnings...that could be described as considerable.

Granted, the earnings outcomes from large-cap stocks are a litmus test to how properly our economy is carrying out...and is expected to do. Fortunately, penny stocks never comply with the identical rules as their leviathan counterparts. Penny stocks can defy logic and perform nicely in bad times...or execute poorly when occasions are excellent.

The point is, you can't study your penny stock company's fiscal final results through the exact same glasses as you would a triple digit goliath. Penny stocks march to their own tune and knowledge everyday climbs and drops that would churn the stomach of most Wall Street analysts.

Which is fine...most Wall Street fat cats are happy with a 7% return on their secure, boring investment. Penny stock investors are not. quality apple earnings