You probably have heard of numerous claims that people trading in the Penny stocks categories earned more money than those trading stocks with fundamentals or Blue chips stocks. It may be true as the penny stocks category provides high rewards as the prices can surge “normally” by 10% or more in just one day. But remember that with high reward expectations comes also with higher risks. It is true that volatility is high in penny stocks because they have mainly lower market capitalization or they have low public float of shares, but this volatility may happen in both direction.

In this article we will discuss the most traded penny stocks today in the Philippine Market

What are Penny stocks

If you are not new to the PSE market you can see from below snapshot that it’s a penny stocks day for this particular time. FFI, PHA,EVER, ZHI,PRIM, TECHW,BHI,LAND which are in this category upsurge in one day from 5% to 49%. What a move!.

For this discussion, we can classify penny stocks as those stocks that have low market capitalization in the range below 5Billion market capitalization.  Investagrams provide this info on its website every time you search for a particular stock. You can see on the shaded “yellow” region of the snap shot. For this example PHA or Premier Horizon Alliance with a current price of 0.45pesos/share and a market cap of 2.33Billion.

How to Identify Penny Stocks

One of the ways I used to identify this if the market capitalization is the price of a stock normally is below 1 pesos. Some have slightly higher than 1 peso price per share but it is a good thumb rule to check out the market cap first before considering as a penny stock. For the below snap shot, Prime media holdings has 2.22 pesos/share price but if you look closely to its market cap it is just 1.56Billion.

Why people like to trade penny stocks

Earning quick money is one of the top reasons why traders buy and sell penny stocks. With the low price per share and possibility of accumulating stocks at their low prices is very attractive since you can buy more shares. When the prices move in accordance to your prediction, it can really give big profits in the short term. One of the most notable rallies experienced last time was during the Telco days where people speculate who will be the third telco during that time. NOW price during the 2018 timeframe sky rocketed by as much as 582% is just under a month of trading. Some really were able to ride the trend and became millionaires during this time.

The graph below shows this potential. Imagine investing 1,000 pesos this time would have made you more than 0.5 Million pesos in earnings.

Why trading penny stocks have high risk

Since trading has always two sides, if you are right with your prediction you can earn big in penny stocks, but if for some reason the market did not move with our expectation, the opposite can happen, you can loss a lot of money and could end up as a very big lesson for taking the risk especially if you could not manage your emotions.

The chart below shows what happen to NOW telecoms, after the speculations subsided, if you are able to buy on its peak at 20 pesos per share and not able to cut your losses early, you are possible to have taken a very big loss of more than 90%. Your account could suffer what most traders nightmare is, being wiped out. Imagine your hard earned money losing its value every day until there is almost nothing left.

Penny stocks have low trading volumes when speculations subside

As you know now, penny stocks have lower market capitalization thus it has a low trading volume. At times when speculations are finish, the stock tend to be illiquid and if you did accumulate a number of shares on a certain penny stocks, selling off this shares may be difficult. I have several experiences where the volume suddenly dried up so I cant sell most of my shares. Either you sell them at much much lower prices or you get “trapped” on these stocks. Hence the term “basura stocks” or “zubaru stocks” are coined with penny stocks as anytime you can stumble a gold mine or a bomb stock.

See sample video below of a trade I did on Penny Stocks

Penny stocks run the risk of Delisting or Prone to market manipulations.

There are several penny stocks in the PSE market that suddenly one day the trading was suspended by PSE regulators due to abnormality on tradings, not earnings (always negative earnings) and accounting issues. Most notable is Abra Mining where until now the stock is still not tradable after being suspended last March 2021.

Penny Stocks in the Philippine Market Below 1 Peso

CompanyCodePrice
Haus Talk Inc.HTI1.04
CTS Global Equity GroupCTS1.06
Alsons Consolidated ResourcesACR0.91
Harbor Star Shipping ServicesTUGS1.28
PH Resorts Group HoldingsPHR1.06
Nihao Mineral Resources InternationalNI0.94
Solid Group, Inc.SGI0.86
Anglo Philippine HoldingsAPO0.73
Vulcan Industrial & MiningVUL1.04
A Brown CompanyBRN0.84
Italpinas Development Corp.IDC0.71
City & Land DevelopersLAND0.86
Ionics, Inc.ION0.6
Oriental Peninsula Res GroupORE0.73
Balai ni FruitasBALAI0.8
Lorenzo Shipping Corp.LSC0.455
Cityland Development Corp.CDC0.68
Medilines Distributors Inc.MEDIC0.73
Vitarich Corp.VITA0.61
Cemex Holdings Philippines, Inc.CHP0.75
Alliance Select Foods InternationalFOOD0.55
Figaro Coffee Group, Inc.FCG0.67
Roxas and Company, Inc.RCI0.6
SOCResourcesSOC0.5
Premium Leisure Corp.PLC0.46
Waterfront PhilippinesWPI0.5
Premiere Horizon Alliance Corp.PHA0.38
ATN HoldingsATN0.385
Century Properties GroupCPG0.375
Basic Energy Corp.BSC0.365
Allday MartsALLDY0.32
Ever-Gotesco Res. & HoldingsEVER0.285
XurpasX0.285
Transpacific Broadband GroupTBGI0.28
Medco HoldingsMED0.275
APC GroupAPC0.21
Empire East Land HoldingsELI0.193
Geograce Resources PhilippinesGEO0.185
MRC AlliedMRC0.18
Lepanto Consolidated MiningLC0.132
Millennium Global HoldingsMG0.113
Crown EquitiesCEI0.081
Boulevard HoldingsBHI0.064
Apollo Global CapitalAPL0.038
Oriental Petroleum & MineralOPM0.011
The Philodril Corp.OV0.0089

How to Trader and Mitigate the risk of Penny Stocks

Here’s the list of items you need to consider before going to penny stocks. These reminders are based on my experiences trading on the market. It may or may not be effective today as circumstances surrounding a penny stock change on a day to day basis.

1. Check the liquidity of the current stock you are trading, ask your self first if there is enough traders on the stock. Penny stocks can easily dry up in volume if there is no catalyst.

2. Allocate a certain tolerable amount to trade the stock. Remember we are not trading fundamental stocks at the moment so there is a chance that when the speculations stop, the volume will certainly dry out. Trade amount you can afford to lose, do not put all your capital in 1 stock

3. Set your take profits at stop loss areas. Once you enter a trade, you should have a plan when to enter and when to exit. No planning on this type of stocks will cost you a lot of money if you are not careful. Some brokers like 2tradeAsia have auto stop loss and take profits options where when the price is hit, the system of the broker will automatically execute the transactions.

For expectation purposes, the volatility can be +/-10% in just one day of trading so take this into consideration

4. Execute your trades according to your plan, there should not be a hesitation when applying what you have intended to do, always remember what happened to NOW telecons, it did happened and it will happen again.

You may want to check these articles as well.

BLUE CHIP STOCKS, WHAT YOU NEED TO KNOW

CASH DIVIDEND IN THE STOCK MARKET

HOW DO YOU EARN FROM THE STOCK MARKET BY PRICE APPRECIATION

WHY DO WE NEED TO INVEST?

DISCLAIMER: Links included in this description might be affiliate links. If you purchase a product or service with the links that I provide I may receive a small commission. There is no additional charge to you!

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Investing in the stock market as we all know sometimes pose significant difficulty especially if we are trying to trade the markets in the short term. With the current volatility that we are experiencing and the erratic movement of the index as the market tries to price in the “interest rate hikes” of the US Federal states and the upcoming rate hike also of the Philippine government through the Banko Sentral ng Pilipinas (BSP), its quite hard to predict the market movement in the short term.

Can you beat the Stock Market?

In the Philippine stock context, we lose money when the market goes down as we can’t win trades if the market goes down. Philippines supports only long market executions and it means we can earn only when the market is going high. We almost hit the bear market as we’ve seen drops of up to 15% of the index from its recent high last February

Sure, you can invest also for the long term in the market and wait for maybe around 3-5 years and check later whether the stock you selected managed to survive the uncertainties in the market. It can be profitable as well especially if you already have a know how on managing your risk.

But for those who doesn’t have the time to analyze the market and ride the trend this would require some time to master the risk management requirement and to control one’s emotion and resist to act according to your personal opinion on the market, it is wiser to diversify your personal assets rather than risking all at once in the market.

MP2 Savings Annual Dividends

MP2 savings is a great alternative as for those who can’t try to beat the market movements. Historically its average yield dividend is above 5% which makes it more amazing as we compare with the interest the banks are willing to pay. Some banks pay a meager 1-3% interest per year and still comes with government tax.

So, this means that the higher we save on the Pag-Ibig MP2 Savings, the more we can earn without thinking too much on how we are going to beat the market. The higher dividend yield from the MP2 Savings come from the fact that this government agency allots 70% of its earnings to distribute as dividend on this program.

Below are the list of common questions and answers about the Government program. You can refer also on its website for more updated terms of the savings.

https://www.pagibigfund.gov.ph/Membership_ModifiedPagIBIG2.html

Where can I find other ways to Earn?

I have written same article on Money Earnerz.com, you can check also there some money-making tips based on my experiences past and present. This is a blog website I have created to help my fellow Filipinos improve our personal finances. This is my additional article for Pag-Ibig MP2 and its benefits.

https://moneyearnerz.com/blog/



What is Pag-IBIG Fund MP2 Savings Program?

The MP2 Savings Program is a voluntary savings program for members who wish to save more and earn higher dividends than the regular Pag-IBIG Savings Program.

Who can save under the Program?

• Active Pag-IBIG Fund Members; and

• Former Pag-IBIG Fund Members with source of monthly income and/or Pensioners, regardless of age, with at least an equivalent of 24 monthly savings.

Is there a limit to how much I can save?

There is no limit. You can save as much as you want under the MP2 Savings Program. In the event that you wish to save an amount exceeding PhP500,000, you would have to remit the amount via personal or manager’s check.

How much dividends will my savings earn?

Your MP2 Savings shall earn dividends at a higher rate than that of the regular Pag-IBIG Savings Program. The dividends you shall earn are tax-free. Your dividends are derived from no less than 70% of the Pag-IBIG Fund’s annual net income. Our 3-year average MP2 Dividend Rate is at 6.96%. Last year, the MP2 Dividend Rate was 8.11% – its highest ever. Kindly refer to the table in this brochure for indicative MP2 Dividends that your MP2 Savings may earn.

When can I receive my MP2 Dividends?

You can choose to receive your MP2 Dividends through any of the following options:

• Upon its 5-year maturity, with your MP2 Dividends compounded; or

• Annually, with your MP2 Dividends credited to your savings or checking account with Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP) or other banks that the Pag-IBIG Fund may accredit in the future. For members who opt for annual dividend pay-out but have no Philippine bank account, especially in the case of overseas members, MP2 Dividends shall be released via check payable to the MP2 Saver.

Can my MP2 Savings be withdrawn prior to its 5-year maturity?

The MP2 Savings can be withdrawn prior to maturity under any of the following circumstances:

• Total disability or insanity

• Separation from service by reason of health

• Death of the member or of any of his/her immediate family member

• Retirement (except when the MP2 Saver is already a retiree)

• Permanent departure from the country

• Distressed member due to unemployment limited to layoff and/or closure of company

• Critical illness of the member or any of his immediate family member, as certified by a licensed physician, subject to the approval of Pag-IBIG Fund

• Repatriation of an Overseas Filipino Worker (OFW) member from host



How do I pay my Pag-IBIG MP2 Savings?

• Salary deduction, for those employed

• Over-the-Counter, in any Pag-IBIG Fund Branch nearest you

• Accredited collection partners. Visit www.pagibigfund.gov.ph/payments/paymentfacilities.html to know our growing list of collection partners

Examples of potential Earnings from the Dividends

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