Investment Strategy for Penny Stocks

ANNOTATION (in English) Work 78 pages, 3 parts, 9 figures, 5 graphs, 3 diagrams, 6 tables, 37 sources, 5 appendices. INVESTMENT STRATEGY ON PENNY STOCKS The work is devoted to the study of drawing up an effective investment strategy for penny stocks in the securities market. The aim of the thesis is to use a qualitative approach in the selection of companies, as well as modern portfolio theory to maximize income and minimize risk when creating a portfolio exceeding indices, the author's portfolio consisting only of penny stocks. The practical significance of the final qualification work of the analysis carried out in this work lies in obtaining data that will allow investors to reconsider their attitude towards stocks in the penny category and thus create new investment strategies based solely on this type of securities. To conduct an empirical analysis, a sample was used that includes 300 penny stocks during three years (from 2018 to 2020) of companies that meet the specified conditions. For this sample, calculations were carried out to compile an investment portfolio according to two scenarios: compiling an investment portfolio based on an equal-share interest investment in shares and compiling an investment portfolio based on modern portfolio theory with given restrictions on the minimum interest investment in shares of one company (0.3% ) and maximum (3%). The obtained results were evaluated using the Sharpe ratio, the Kalmar ratio and the total shareholder return ratio for comparison in efficiency with the selected indices.