(EMAILWIRE.COM, December 31, 2009 ) New York, NY - During the economic slowdown of the last couple of years, some of the best gains in 2009 came from an unlikely source - penny stocks. These shares in publicly traded companies include any in the sub $5 price range, with many trading for as low as a few cents per share.

While the Dow Jones Industrial Average has seen a jump of 15% for the full year, to just over 10,500, the Russell Micro Cap Index has enjoyed a jump of over 23% in the same time period.

Many of the penny stocks that are leading this strength are companies that were once considered blue chips, but had fallen on tough times. Ford Motor Company (F) is just one example, dipping into the territory of penny stocks at $1.50 per share in February, only to ramp up as high as $10.37 by December, representing a 591% gain.

One financial analyst who spotted the value in Ford shares when they were at their lows was Peter Leeds, CEO of PennyStocks.com. "Investors were trading based on fear rather than logic. This resulted in Ford shares being driven well below their fundamental value."

Investor fear was very high in the first quarter of 2009, based on the market volatility indicator known as the VIX index. Often referred to as the "Fear Index," the VIX hit it's highest level of 57 in the third week of January, but since then has steadily declined to it's current level of 20. The lower the Fear Index, the less volatility and concern generally seen on the markets.

The strength coming from penny stocks is not limited to average overall returns, but also to the degree of the gains made by individual equities. While even some of the best-performing large cap shares struggled to double in price from their lows, there were hundreds of penny stocks that accomplished this feat in 2009.

Nova Medical (NVMI) ballooned from 34 cents to current levels of $6.07, with most of that rise coming in the last few months.

Click Software (CKSW) enjoyed a dramatic run, from $1.80 to a high in July of $9.18. Currently, CKSW trades at $7.19 at year end, a slight drop from it's peak, but still 300% higher than where it started.

Alpha Pro Tech (APT) trades on the AMEX. In March the shares touched 75 cents, but since then have traded as high as $7.60, making the penny stock a ten-bagger.

While there are some risky and poorly-run penny stocks, there are many that trade on legitimate stock exchanges, such as the Nasdaq, AMEX, and even NYSE. These are generally well managed corporations that are either experiencing hard times for their share prices, or are yet to be discovered, or to grow large enough to be noticed by the mainstream investment community.

"Penny stocks are risky," said Peter Leeds. "They are not for everyone. There are a lot of bad ones out there. However, when you can find the best ones, there is no better way to make great returns in short timeframes."

On last check, Alpha Pro Tech was up 25 cents on this last day of trading in 2009. This may bode well for many of these high-flying penny stocks, that they may maintain their momentum leading into 2010.

Contact Information:
Peter Leeds, Inc.
Betty Taylor
Tel: 1800695557
Email us


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