Stock #5:

Osteotech, Inc. (OSTE)

Penny stocks become very big deals because they make products with potentially very large markets. That is true with Osteotech Inc. (OSTE). This company serves the aging population with bone and tissue products that improve the quality of life. 

OSTE trades for $1.57 per share with a market cap of just over $28 million. The company has minimal debt and approximately $1 per share in cash. With the aging of an active baby boomer generation, OSTE is positioned to grow rapidly. Forget about short-term issues with the economy, and focus on the long term.

With good fundamentals and a promising future, OSTE makes sense for any penny stock portfolio. The company should be profitable in the current fiscal year and should break even in 2009. If things go well, profits should return thereafter.

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