| The intrinsic value of a company is its book value. By | | | | assets minus any obligations the store has. You need |
| subtracting the liabilities of a company from the | | | | to look at companies in the same way the potential |
| assets... and then dividing that amount by the number | | | | buyer is looking at the store he is considering buying. |
| of shares, this measures the book value of a | | | | And, instead of having to spend your days analyzing |
| company. | | | | all of the company's financials, you can usually obtain |
| When buying a penny stock, you need to put | | | | this information from financial websites or a |
| yourself in the hoes of a buyer who is buying the | | | | brokerage account. |
| company. Using the understanding of how a typical | | | | Once you have that "number", you will have the |
| retail store operates, the closer you begin to think | | | | book value of the company. When looking to |
| like the store owner, the better off you'll do. A buyer | | | | uncover hot penny stocks, try to find companies |
| of a retail sore takes count of the inventory. He | | | | selling for less than their book values. You are buying |
| assigns the equipment a value and the inventory or | | | | those companies for less than their book value |
| merchandise a value. The buyer would then subtract | | | | worth... so you are buying at a discount. Try buying |
| the money owned by the store from the value of its | | | | an established profitable business for less than its |
| assets and arrive at the value of the store. This | | | | book value. Often times a profitable company will sell |
| value does not take into consideration goodwill, | | | | at a minimum of twice its book value. If you can buy |
| reputation, customer loyalty or location of the store. | | | | the stock for less than its book value, you have the |
| The value is only the cost of the physical or tangible | | | | potential to double your money. |