Any profitly member will attest to a stock’s ability to generate abnormal returns in the sub $20 niche, especially when an earnings catalyst is applied. This became apparent to me as I was introduced to the "penny stock" niche in mid 2012, and I immediately recognized the potential for exponential growth. I have mostly automated the process of locating and trading these stocks (I prefer to enter my orders manually), and #AirApp caters to the strategy I derived from the lessons learned over the years.

Starting out, I learned from the prominent penny stock day-trader Tim Sykes, and I initially (and naively) assumed that he had invented the idea of buying earnings winners. Although this concept has been around for decades, Sykes blazed the trail in applying the strategy to lower priced stocks.

 

Ray J. Ball & P. Brown initially introduced a study in response to the market efficiency theory, and it has been widely studied in the finance industry ever since. You can further your research here, here, here, and here. The consensus is, that because of reasons, stocks tend to drift upwards over an extended period of time after a positive earnings announcement.

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