Raleigh, NC (PressExposure) April 13, 2012 -- Peter Leeds, publisher of the world famous penny stocks newsletter, author of "Invest in Penny Stocks," and authority on trading penny stocks, suggests all investors avoid Pink Sheets penny stocks. Given their simple listing requirements, thin trading volume, and lower investor visibility requirements, pink sheets penny stocks generally tend to be companies of lower quality, when compared to penny stocks on more senior exchanges like the Nasdaq, Amex, NYSE, or OTC-BB.
Not all markets are created equal it would seem. Nor are all penny stocks created equal. At least not according to Peter Leeds, author of "Invest in Penny Stocks," and publisher of the world famous Peter Leeds Penny Stocks newsletter.
"Shares that trade on the Pink Sheets, in my view, tend to be companies of lower quality," mentions Leeds. "Between lower listing requirements, regulations that are comparatively lax, and thinner trading volumes, companies on the Pink Sheets are often of low to very low quality."
In terms of listing requirements, Leeds is referring to the costs and criteria that penny stocks need to meet or incur to gain a listing on the Pink Sheets. While it may cost as much as $250,000 to trade publicly on the New York Stock Exchange, a Pink Sheets listing may only be a few thousand, states Investopedia.
Leeds goes on to explain that, "With easier means of listing, the Pink Sheets act as a magnet for the thousands of horrible companies out there that will trade as penny stocks, completely overwhelming any high quality companies among the overload. Any investor's odds will dramatically improve when they look to the higher end markets, like the Amex, Nasdaq, or it's subsidiary, the OTC-BB."
Leeds continues that he and his penny stocks team never analyse or review any penny stocks trading on the Pink Sheets. They also receive no compensation from the penny stocks they review and pick for subscribers to the Peter Leeds newsletter.