Penny Stocks: Looking For The Next Gold Rush

Investing in penny stocks is like high stakes gambling, where you bet your money on the right cards and hit the jackpot. Picking the winning suite takes foresight and a little luck. The same goes with penny stocks: investors with vision are able to identify the next big thing before it becomes the next big thing.

When investors were shying away from eBay and Amazon back in 1995, a few believed in the potential of e-commerce, and now they have reaped huge dividends from their investments in these internet giants.

Identifying future trends is difficult, but based on research and current economic conditions, here are four sectors that have the potential for explosive future growth.

Diabetes Research and Treatment
More than 23 million people in the US have diabetes, and the numbers are growing at an alarming rate. That's why the treatment of diabetes has become big business, with healthcare costs estimated to grow to $200 billion by the year 2020. With so much money being spent on this disease, many penny stocks companies have entered the field of diabetes research and treatment. And with the prevalence of diabetes expected to increase dramatically in the next 50 years, this is a market sector that is ripe for the picking.

Dental Technology
Commodities that are also necessities, like dentistry, are good investments. Over the past 10 years, dental health expenditures have more than doubled and are expected to approach $150 billion in the next decade. Investors who saw the potential in dental stocks are now cashing in on the success of penny stocks companies such as Sybron Dental (from $12 to $48 in 5 years), Centerpulse (from $10 to $30 in 5 years), and Schick Technologies (from $1.06 to $45 in 3 years). These three companies have since graduated from the Pink Sheets to the Nasdaq.

Freight Shipping
Prices of penny stocks fluctuate according to supply and demand, so the key is buying and selling shares at the right time. In the shipping industry, shipping companies regularly refurbish their fleet when their vessels get old.

But unlike cars which can be produced in a few months, ship construction and sea trials take years. During this period, demand for shipment of goods exceeds the number of ships available, so freight rates increase, and shipping stocks enjoy increased gains of as much as 2000 percent. Once new vessels are available, freight rates and shipping stocks drop as vessel supply exceeds the shipment demand.

Alternative Energy
With the price of oil hitting new highs and tension mounting among oil producing nations, alternative energy sources will continue to be a hot topic in the near future. Solar and wind energy, clean coal technology, and hydrogen fuel applications are beginning to receive attention. But the most promising could be the conversion of waste to energy, with the average American producing nearly 1,600 pounds of garbage per year.

Japan is already using 62% of its trash for electricity production. A large part of Switzerland's energy production comes from utilizing 60% of its solid waste. And France, Canada, the US, and the UK are not far behind.

One penny stocks company poised to reap the benefits of waste to energy technology is International Power Group (Pink Sheets: IPWG). Although IPWG is a penny stocks company in development stage, it has laid out the groundwork for building waste conversion facilities on a worldwide scale by purchasing the patented technologies of Anovo AB, Add Power, and Scrub Power.

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