One of the ways of researching individual penny stocks is to look at how many employees it has.

It may sound obvious that a company with employees needs to be able to pay them regularly but it’s an important consideration when looking at small companies.

Certain start up companies may initially pay certain employees (usually the founders or other key players) in stock but this rarely applies to staff further down the line which all companies need to grow and prosper.

So a company with more employees indicates a real business and one with a long term commitment to it’s business.

It may be possible to estimate the number of employees from the company accounts or the information may be available from the company website or other sources.

Failing that, contact the company and ask the human resources manager. While you’re on find out if they are currently hiring and if so in what areas. This will provide vital clues as to which direction the company is heading.

Dave J

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