Penny stocks are.... cheap.
Yet just like the rest of reality, with cheap merchandise from a cheap supplier comes a cheap client-base. Just as one wouldn't expect to see limousines parked outside of a 99-cent store or a tenderized Prime Rib on a McDonald's "toasted" bun, people and the products they use run in the like-minded crowds that stereotype them.
Your peers may be fools, but for the most part they were just victims of their own frugality in an industry that shows no mercy or leniency towards the principle of "getting what you pay for..." And as a result, we PSI's have come together finding our paths and fates intertwined to meet at the dirty Wal-mart of financial exchanges. Here we carry the hopes of finding a sparkling diamond ring for Jenny, to dig through the DVD bargain bin for a cheap fix, or to buy in bulk a year's worth of gum as a proud consumer of quantity over quality. Yet at the root of every shopper's story compiled in the cart that meanders down the aisle, lays the bold truth that a product found here inherently ought to be worth as much as it does in the specialty stores sanctified by those of the Bourgeoisie.
It is a fact that the investing elite does not shop Pink Sheet Stocks.
Included amongst this class are the institutional investors, hedge fund managers, and anyone with the common sense to pin their money to the upper exchanges. In a world in which image is everything and social success requires the conformed opinion of others, the packaging of a product must be attractive in quality. In order to one day include the great amount of wealth pooled by the Investing Elite, the goal of a company's public life must be to attract them. A tight share structure with a low amount of outstanding shares (several million, not several hundred million+), a steady share price, a promising company outlook, audited financials, and positive cash flow are all ideal conditions which add to such attractiveness.
Such companies with the ideal characteristics are difficult to find on the lower exchanges, yet they are qualities for which to be on the lookout. One hidden gem I might guide you towards is this company: Advanced Growing Systems Inc. AGWS's packaging is nice & neat. It should always be the hope to have your company work on its packaging in order to one day be uplisted onto the higher exchanges. When channels close and prohibit your company from being able to obtain such characteristics in the future, consider the long-term prospect of your public company's ability to succeed.
1 comment:
Why is it that everybody buys the very most popular stocks. If you do this you are doomed to get only average returns over time. Why not focus on decent companies that are extremely undervalued instead. I bought a stock called seaboard corporation About 7 or 8 maybe 9 years age something like that and paid 190 dollars a share. I sold my shares about 5 years later for 2500 hundred dollars. The company was profitable when I bought it and profitable when I sold my shares. Bear in mind I would not say something that I cannot back up believe me. I will give an example of a company of really decent quality that I consider really undervalued. The company is Bunge Limited symbol {BG} engages in the agriculture and food businesses worldwide. The stock currently trades around 59 dollars a share. I think the stock could easily get to 450 dollars a share over the next five years. Yes you heard it right four hundred and fifty dollars a share. Assuming their are not stock splits. And what do I base this on If the companies profit margain expands from around 1.75% to 4% over the next five years and if the sales of the company expand from 55 billion to 85 billion thats growth of about 7 or 8 percent a year and if the companies stock than trades at a price earnings ratio of about 20. That would put the price of the stock at 450 dollars a share. It could even be more than 450 dollars a share if you reinvest your dividends the company pays a dividend also if the company does a Large share buyback this could increase the value of the stock a lot more. Keep in mind that their are stocks that are popular that trade at much higher price earnings ratios than 20 times earnings one example is whole foods market it currently trades at 35 times earnings. Also keep in mind that bunge is a company of really decent quality not at all a high risk stock. It has the potential to leave a company like proter and gamble in the dust. I understand your skepticsm if you are reading this but go to any stock broker or financial planner CPA that knows how to value stocks and they will confirm everything that Im saying here.
Post a Comment