Buy Pink Sheet Stocks – How to Buy the Best Pink Sheet Stocks

Fact Checked by Gary McFarlane

Investing in pink sheets stocks may not guarantee overnight financial success, mainly because of low prices and minimal regulations. 

However, it’s an established way to diversify your investment portfolio and get wind of potentially profitable shares that could change your finances.

Pink sheet stocks are sold over-the-counter through OTC Markets Groups Inc. rather than on the US’ primary stock exchange market. That is because they don’t meet the basic requirements to be listed on the NYSE or Nasdaq; the issuer trades them over the counter.

Surprisingly, some corporations prefer to list their shares over the counter because it’s easier to make the grade for the regulations and requirements listings. 

There are more other interesting facts about pink sheets. But as you read on, this complete guide will help you understand what pink sheets are and how you can profitably invest in them.

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How to Buy Pink Sheet Stocks – A Quick Guide for 2021

There are different ways you can invest in Pink sheet stocks. The most common method is buying and trading pink sheet stocks directly through the OTC window of a regulated online broker like the Capital.com exchange. 

However, some notable brokerage services providers like eToro don’t support OTC transactions. Hence pink sheet stocks may not be traded on them.  

Nevertheless, the procedures for buying pink sheet stocks on brokerage platforms are virtually the same. 

That said, here’s a quick guide to get you started on buying and selling pink sheet stocks on Capital.com. 

  • Step 1: Create an Account with Capital – Launch your browser and go to eToro.com to register as an investor. 
  • Step 2: Identity Verification – To fully set up your account, you must complete the identity verification check. All you need is a government-issued ID plus a utility bill not older than three months. 
  • Step 3: Deposit Your Account – To start trading pink sheet stocks, your account must be pre-funded with a minimum of $20. You can do this through various methods. 
  • Step 4: Find the Pink sheet shares – Go to the market section and search for the pink sheet company you wish to invest in  – for example, Gold Resource Corporation (ticker: GORO). 
  • Step 5: Start trading esports stocks – When you find the specific pink sheet stock, click on “Trade,” then fill the “Amount” entry box and tap on the “Buy” button. 

68% of retail investor accounts lose money when trading CFDs with this provider.

Best Pink Sheet Stocks to Buy Now – List of the Best Pink Sheet Stocks

Like any other form of investment, you have to study the assets to know the promising ones and the ones with the potential to go down the tubes. Analyzing pink market stocks is not straightforward, so you’ll likely need more time to understand them.

You don’t have to go through the hassle of finding the right penny stocks. Below are some of the best pink sheets that are worth your time and investment:

  1. Gold Resource Corporation – The Best Pink Sheet Stocks in the Mining Industry
  2. Taitron Components Incorporated – Highly Promising Pink Sheet Stocks in Electronics
  3. Denison Mines Corporation – Best Low-Priced Pink Sheet Stocks to Buy Now
  4. Chembio Diagnostics Inc. – Best Pink Sheet Stocks in the Healthcare Industry
  5. TOMI Environmental Solutions Inc. – The Promising Pink Sheet Stocks to Buy in 2021/22

A detailed discussion of each of the above stocks is further below in the article. 

How to Buy Pink Sheet Stocks – Select a Broker

Selecting the ideal broker before investing in pink sheet stocks is one of the best decisions you’ll ever make. In reality, it’s pretty difficult to lay your hands on the best because every broker out there toots their horns as the most reliable brokerage firm.

That being the case, it’s recommended to select a brokerage platform regulated by reputable firms. It would be best if you also were on the lookout for features such as fees, commissions, available payment methods, customer service quality, and threshold on minimum investment. 

Admittedly, these require quite a great deal of research. However, after making a comparative study of different the options available, we find the below sites to be the best brokers for buying and selling pink sheet stocks: 

Capital.com – Overall Best Place to Buy Pink Sheet Stocks

TD Ameritrade– Trade Pink Sheet Stocks at 0% Commission

In-depth reviews of the above two brokers are available in the following sections. 

What Are Pink Sheet Stocks?

Pink sheet stocks are listed only on OTC Markets Groups because they do not qualify to be in the main stock exchange markets, such as the NYSE and NASDAQ.

Also, the market is minimally regulated and less costly for listing any stock, making it a fertile ground for even illegitimate corporations to make money off unsuspecting investors.

Though pink sheets and penny stocks are different, most pink market stocks are penny stocks, mainly because they are less than $5. 

While some qualified penny stocks are tradeable on securities exchanges, pink sheet stocks do not make headway into the significant exchanges.

Because it is less regulated, the pink sheet stock market is the riskiest of all. For this reason, investors should avoid going off the top of their heads before making a critical buying decision.

Best Pink Sheet Stocks to Buy Now – The Full Discussion

Gold Resource Corporation – The Best Pink Sheet Stocks in the Mining Industry

Gold Resource Corporation (ticker: GORO) is a global silver and gold mining company with divisions in Mexico, Nevada, South Africa, Central America, and more.  

Usually, from November to February, the gold rush tends to increase steadily and at unpredictable rates. 

In November, the corporation’s stocks saw an 11% increase, mainly because of the fear of inflation across the United States. 

Experts say the 14.21 forward price-to-earnings ratio (P/E) means that the stocks may go over the top in 2022.

Taitron Components Incorporated – Highly Promising Pink Sheet Stocks in Electronics

Valued at over a billion dollars, the company is a supplier of electrical components such as transistors, optoelectronic devices, diodes, and discrete semiconductors. 

Though currently priced at around $4.80, TAIT stocks have trail-blazed profitable pink sheets. Between 2019 and 2020, it recorded about 170% increase in value, which is over the top for a pink market stock.

Just in case you think that was in the past, the current gain margin is 27.40%. Besides, it has a 75.40% growth in its earnings-per-share this year.

With a 10.79 P/E and a steady growth rate, you can be sure that the stock is set to boom in 2022, making it a must-have in your pink sheet portfolio.

Denison Mines Corporation – Best Low-Priced Pink Sheet Stocks to Buy Now

The company deals mainly in the exploration and processing of Uranium metal, which finds applications in nuclear plants to generate electricity. 

Uranium is also widely used in producing isotopes for medical, industrial, and national defense systems construction. 

DNN is currently struggling since its 20% growth rate earlier in November. The reasons are likely that investors are feeding off their gains instead of allowing the stocks to gain traction for more growth.

The resilience and dexterity the management has shown in stabilizing the stock’s growth are worth considering. Besides, despite the struggle since mid-November, the asset has maintained zero debt and a strong balance sheet.

Chembio Diagnostics Inc. – Best Pink Sheet Stocks in the Healthcare Industry

The company specializes in developing, manufacturing, and monetizing point-of-care diagnoses for detecting infectious diseases such as COVI9-19, STDs, and more. 

Chembio is relatively new in the pink sheets market, but it promises a bright future. Around November, it gained a bullish 6%, which is more than fair for a newly listed penny stock in the pink sheet market.

Besides, the potential of attracting more investors and shareholders is high, considering that the company peddles COVID-19-related products and diagnostic tests.

TOMI Environmental Solutions Inc. – The Promising Pink Sheet Stocks to Buy in 2021/22

It is a global company that majors in infection prevention and decontamination through the application of Binary Ionization Technology in its Hydrogen Peroxide products. 

Within a short period in November, TOMZ has shown signs of bullishness with high trading volume and a hammer candlestick.

Besides, its contribution to the fight against COVID and the latest Omicron variant may attract more investors than you can imagine.

Considering the steady growth rate it has recorded in the last five years, there is no doubt that the management is focused, making it one of the best stocks to add to your pink sheet portfolio.

What to Know When Buying Pink Sheet Stocks? 

First Things First: Research

Researching the market takes first place when buying pink sheets. Unlike other stocks traded on major markets, pink market stocks are only traded through OTC Markets Groups Inc.

That being the case, visit the OTC Markets website to start your findings. Check for stocks of known companies in the listings. If you can’t find any that rings a bell, use the charts, market activity, and news updates to speculate.

It’s also recommended to research each stock. It’s simple nowadays: type the name on Google, and you’ll discover what other investors are saying about it. 

The information garnered during the research can be a hot lead on what to buy or avoid.

Up Your Risk Management

Managing risk is necessary for investment, but it could be over your head when selling pink sheets. That said, you should have a definite plan for managing loss. The plan should keep you from making decisions emotionally or even backing out on the verge of winning.

Without a plan, you are no better than a gambler hoping for the deity of miracles to work in their favor. Your plan should include profit and loss limit orders, which may be a bit technical for pink market stocks.

Use the Right Broker

Many things in the stock market fall on the broker you use for your investments. The suitable brokers will guide you and ensure you don’t lose your hard-earned money to wrong trading decisions.

On the flip side, the wrong broker may not necessarily provide vital information to put you on course while trading stocks. 

There are not as many brokers for pink sheets since it’s a minority market. However, using middlemen like Interactive Brokers, E*TRADE, Charles Schwab, and TD Ameritrade come in handy.

Test the Waters Using Demo Accounts

The ideal broker should offer tutorials and demo accounts for users to practice. If this is the case with your brokerage firm, ensure you dedicate ample time to practicing.

Practice and practice until you are confident that you are good to go. Usually, trading with confidence yields more positive results than when you hope to gamble your way to success.

Benefits of Buying Pink Sheet Stocks

Like every other stock, the first and most apparent benefit of buying pink sheet stocks is the opportunity to profit off the volatility of their price. 

However, it’s essential to understand what you are betting your money on;  pink sheet stocks differ significantly from conventional assets. 

In this section and the next, we have outlined in detail the pros and cons that come with buying pink sheet stocks. 

Growth opportunity

Historically, most stocks by mainstream companies go through brief and elongated stints trading via pink sheets on the OTC markets before a sudden exponential growth shoots them up the level of a highly-priced stock. 

Concur Technologies is a good example. Once valued at $0.31 per unit, the company’s shares are presently trading at over $125 per piece. 

That also explains why pink sheet stocks seem to yield a higher ROI (Return On Investment) than their more expensive counterparts. 

Value Investing

The pink sheet market is always a goldmine of undervalued stocks that should be trading at a much higher value than presently estimated. 

With diligent research assisted by thoroughly-verified data, you can accurately uncover such hidden gems in the OTC market where pink sheet stocks are exchanged. 

This is often the case as stocks of some promising companies with million-to-billion dollars worth of assets might crash below the $5 mark.  

The Disadvantages of Buying Pink Sheet Stocks

Higher Risk

Pink sheet stocks are pretty much the riskiest zone in the overall stock market space; it is not uncommon to see the entire account reduced to zero or margin positions (CFD) getting liquidated more than the actual investment. 

As such, it is strongly recommended to invest only what you can afford to lose.

Illiquid

Some pink sheet stocks suffer from low liquidity, often because the stocks may be in limited supply or a shortage in the number of available investors. 

That means getting in and out of a position (trade order) might not be as easy as expected. One of the spillover effects is the extreme volatility; hence, shares price can easily be manipulated using large orders.

That also leaves the pink sheet market open as a prime target for notorious whales to stage front-run the market and entrap unsuspecting retail investors. 

Where to Buy the Best Pink Sheet Stocks – Full Broker Reviews

In this section, we have put together a full review of suitable brokers where you can start trading pink sheet stocks. 

1. Capital.com – Overall Best Place to Buy Pink Sheet Stocks

If the prospect of making quick gains by trading pink sheet stocks through CFDs looks more exciting to you, Capital.com may be the right broker for you. 

That means Capital.com will enable you to make money with pink sheet stocks even when prices fall headlong into a downward spiral. This is possible through the short-selling feature, and you can use leverage to maximize profits. 

Also, Capital.com supports direct trading of pink sheet stocks at 0% commission. You might even find the spreads more competitive than other brokers. 

In addition, there are no fees attached on deposits and withdrawals. 

On the safety aspect, Capital.com is easily one of the most reputable online stock brokers with verifiable operational licenses from the FEC, ASIC, NBRB, CySEC, and more. 

Pros

  • Regulated
  • Perfect for CFD trading
  • $20 minimum deposit (credit/debit cards and online wallets).
  • 0% commission for all trades
  • Tight spreads
  • A wide variety of listed assets. 
  • Convenient for starters. 

Cons

  • $250 minimum deposit on bank transfers
  • Not suitable for advanced investors. 

68% of retail investor accounts lose money when trading CFDs with this provider.

2. TD Ameritrade – Trade Pink Sheet Stocks at 0% Commission

TD Ameritrade offers a full-fledged stock brokerage service coupled with a well-organized educational program for beginners and experts alike. 

The trading platform also allows an unparalleled level of customization that empowers the user with unlimited freedom to personalize the trade interface to desired taste. 

In addition, TD Ameritrade supports a variety of assets classes that includes pink sheet stocks, which can be swapped via its OTC market. 

Hence, you can sign up for a free account to start trading on the platform available on the web, mobile, and the thinkorswim platform. 

Also, do note that the minimum deposit amount allowed is $2000. Perhaps the reason for that is that TD Ameritrade caters to investors seeking to join stock IPOs (Initial Public Offerings). 

However, unlike Capital.com, the commission for stock trading made online is $6.95, and $35.99 for Interactive Voice Response (IVR), or $44.99 for assisted trading. 

Pros

  • Expansive educational programs for investors of all kinds. 
  • Available on the web and mobile platforms with sophisticated interfaces. 
  • Diversities of assets. 
  • Different forms of investment, including OTC for pink sheet stocks. 

Cons

  • Fractional shares not supported
  • High fees and commissions

68% of retail investor accounts lose money when trading CFDs with this provider.

How to Buy the Best Pink Sheet Stocks – The Complete Steps

After reading through to this point, if you would like to start buying and selling pink sheet stocks right away, below is the complete walkthrough based on the Capita.com platform. 

Step 1: Create an Account with Capital.com – Go to Capital’s official website to open an account using your name, email, and passwords. Also, ensure to click the email verification link sent to you after clicking the “sign up” button. 

Step 2: KYC Verification – As a regulated exchange, Capital.com allows only eligible investors to access its services. Hence, you will need to scan and upload your ID card and address confirmation documents. 

Step 3: Deposit Your Account – With the account now fully set up, you can proceed to deposit the investment capital – at least $20 through any of the methods. 

Step 4: Search the Pink sheet shares – Go to the market section and search for the pink sheet company you wish to invest in using the ticker symbol—for example, Gold Resource Corporation (ticker: GORO). 

Step 5: Start trading esports stocks – When you find the specific pink sheet stock, click on “Trade,” then fill the “Amount” entry box and tap on the “Buy” button.

Step 6: Track the performance of your stocks – With the pink sheet stocks now conveniently sitting on your account, you’d need to monitor the price changes from time to time. 

Conclusion

Like every OTC (over-the-counter) stock, pink sheet stocks can be risky as they are often illiquid. In a similar vein, investing in them can be a great opportunity, especially for the long-term investor. 

However, the most crucial thing is to ensure you research and select the most promising pink sheet stocks available and manage your investment via a top-rated brokerage services provider like Capital.com and TD Ameritrade. That’s the bottom line. 

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About Shrey Jain PRO INVESTOR

Shrey Jain is a Chartered Accountant who holds a forte in creating informative content on niches like Blockchain, crypto, business, and fintech. He is also a contributor on Benzinga, Hackernoon, Publish0x, and Seeking Alpha. He can help readers get valuable insights on varied topics.