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Penny stocks are a big draw for many investors since they do not require a large investment to gain a big profit. Penny stocks move at great lengths in a very short amount of time. Penny stocks are issued by companies with a short or erratic history of revenues and earnings, and therefore such stocks are more Volatile than those of large, well-established firms traded on the New York or American stock exchanges. Many brokerage houses therefore have special precautionary rules about trading in these stocks and the Securities and Exchange Commission (SEC) requires that brokers implement Suitability Rules in writing and obtain written consent from investors. Penny Stocks are by nature cheap yet there are those who want to find the cheapest and most undervalued penny stocks they can find to maximize their investment even more. To cut to the chase, it’s definitely better to search for the most undervalued penny stocks rather than the cheapest.