Top 5 Penny Companies To Invest In Right Now

NEW YORK (TheStreet -- Cancelled stocks are the walking dead in penny stock land.

They are set to die but continue to trade. These stocks are usually collateral damage from a bankruptcy ruling based on creditors demands to protect their assets, usually in bonds. Most often, a judge will divvy up the company's carcass, leaving the largest slice to bondholders while equity investors watch helplessly as a stock is cancelled.

Most sane investors would question why in such cases anyone would buy a soon-to-be-cancelled. The answer is simple: the low price, often in pennies, seems too good to pass up.

"A bunch of people trade in the Q's," said Zvi Rhine of Sabra Capital Partners, referring to companies in bankruptcy which have a "Q" added to their ticker. "Every now and then a Q stock will rip." Cathy Hershcopf is a corporate bankruptcy lawyer at Cooley LLP who said she's always surprised that investors trade in equities that have almost no value and little prospects for improvement. "When a company declares bankruptcy, there usually isn't enough money left for the creditors to be paid in full, much less give any value to the equity," Hershcopf said. Investors often lose money because they fall prey to speculation and rumor, the currency of Internet chat rooms. A common rumor is that an 'equity committee' will be formed to save a stock, thereby pushing the shares higher and sucking-in unsuspecting buyers. However, these rumors rarely pan out. Once a judge hears from creditors and declares a cancellation, the stock's life comes to an abrupt end, and shareholders lose all their money. Rick Szambel of Albert Fried specializes in bankrupt stocks and says he's a frequent target of the bankrupt-stock rumor mongering. "Even when I'm right, I am criticized as being wrong,'' Szambel said. "I quote directly from the disclosure documents, so I'm not wrong. Most regular people don't know where to find these documents or know how to understand them." Nonetheless, anyone can say anything on the Internet, Szambel said. "Just because someone says it on the Internet, doesn't mean it's true."

Hot Blue Chip Stocks To Buy For 2015: NRG Energy Inc.(NRG)

NRG Energy, Inc., together with its subsidiaries, operates as a wholesale power generation company. The company engages in the ownership, development, construction, and operation of power generation facilities. It also involves in the transacting in and trading of fuel and transportation services; the trading of energy, capacity, and related products in the United States and internationally; and the supply of electricity, energy services, and cleaner energy and carbon offset products to retail electricity customers in deregulated markets. The company operates natural gas- fired, coal- fired, oil-fired, nuclear, solar, and wind power plants. As of December 31, 2010, it had power generation portfolio of 193 operating fossil fuel and nuclear generation units with an aggregate generation capacity of approximately 24,570 megawatt (MW), as well as ownership interests in renewable facilities with an aggregate generation capacity of 470 MW. The company portfolio also includes appr oximately 24,035 MW generation capacity in the United States, and 1,005 MW generation capacity in Australia and Germany. In addition, it has a district energy business with steam and chilled water capacity of approximately 1,140 megawatts thermal equivalent. NRG Energy, Inc. was founded in 1989 and is headquartered in Princeton, New Jersey.

Advisors' Opinion:

• [By Garrett Cook]

  In trading on Wednesday, utilities shares were relative leaders, up on the day by about 0.94 percent. Top gainers in the sector included NRG Energy (NYSE: NRG), up 3.2 percent, and NextEra Energy (NYSE: NEE), up 2.6 percent.

• [By Sue Chang and Ben Eisen]

  NRG Energy Inc. (NRG) �shares rallied 4.8%. The power company said Friday that it will buy Edison Mission Energy from Edison International (EIX) �for a total of $2.64 billion in an effort to expand its generation portfolio and to achieve economies of scale. It said it expects to close the deal in the first quarter of 2014.

Top 5 Penny Companies To Invest In Right Now: Flexsteel Industries Inc.(FLXS)

Flexsteel Industries, Inc., together with its subsidiaries, engages in the manufacture, import, and market of residential and commercial upholstered and wooden furniture products in the United States. Its upholstered and wooden furniture products include sofas, loveseats, chairs, reclining and rocker-reclining chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, and bedroom furniture. The company distributes its products for use in home, office, hotel, and other commercial applications through its sales force and various independent representatives, as well as to various national and regional chains. Flexsteel Industries, Inc. was founded in 1929 and is based in Dubuque, Iowa.

Advisors' Opinion:

• [By Dividends4Life]

  Memberships and Peers: LEG is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: Hooker Furniture Corp. (HOFT) with a 2.4% yield, Flexsteel Industries Inc. (FLXS) with a 2.7% yield and Ethan Allen Interiors Inc. (ETH) with a 1.4% yield.

Top 5 Penny Companies To Invest In Right Now: Helios Advantage Income Fund Inc. (HAV)

Helios Advantage Income Fund, Inc. is a close ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. The fund invests in the fixed income markets of the United States. It invests a majority of its assets in below investment grade debt securities, which are bonds rated Ba1 or lower by Moody's Investors Service, Inc., BB+ or lower by Standard & Poor's Ratings Group. The fund benchmarks the performance of its portfolio against the Barclays Capital U.S. Corporate High Yield Index and the Barclays Capital Ba U.S. High Yield Index. It was formerly known as RMK Advantage Income Fund, Inc. Helios Advantage Income Fund, Inc. was formed on November 8, 2004 and is domiciled in the United States.

Advisors' Opinion:

• [By Tom Stoukas]

  Havas SA (HAV) surged 6 percent to 5.82 euros, its largest rally in 14 months. The French advertising company reported first-half profit of 58 million euros ($77 million), beating the average analyst estimate of 55.9 million euros.

• [By Namitha Jagadeesh]

  Havas SA (HAV) lost 1.6 percent to 5.78 euros. Barclays Plc downgraded the French advertising company to equal weight, similar to neutral, from overweight, citing the need to ��ause for breath��after its strong performance over the past three months. Havas climbed 28 percent from a June 24 low through yesterday�� close.

Top 5 Penny Companies To Invest In Right Now: Select Comfort Corporation(SCSS)

Select Comfort Corporation develops, manufactures, markets, and distributes adjustable-firmness beds and other sleep-related accessory products in the United States, Alaska, Hawaii, Canada, and Australia. It offers its mattresses under the Sleep Number brand name. The company also provides a line of accessory bedding products, including specialty pillows, mattress pads, comforters, sheets, and leg options. Select Comfort Corporation distributes its products through retail, direct marketing, and e-commerce channels. As of January 2, 2010, it had 403 company-owned stores and 146 retail partner doors. The company was founded in 1987 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:

• [By Rich Bieglmeier]

  [Related -Select Comfort (SCSS) Calls Active]

  Sales, unlike earnings, are expected to grow, rising 6.2% year-over-year (YoY). Select Comfort's consensus revenue estimate for Q1 is $ 274.27 million, more than last year's $ 258.24 million.