Finding Undervalued Stocks

Penny stock ? A swift moneymaker

Everyone knows that they can make money in the stock market.  However, quick money is the reason dealing with penny stocks is so alluring to new traders. With a little investment and a huge appetite for fast paced action, it is feasible to risk a small sum of money and end up with a LOT of money.

Penny stocks are companies that have low priced shares. People who offer free penny stock information usually refer to them as a stock with a share price lower than $5.

Usually penny stocks are nothing but regular old stocks, but traded on over the counter markets (OTC).  This just means they trade on a different exchange.  Penny stocks are by no means traded over the NYSE, as they do not act in accordance with their regulations. NASDAQ listing requirements are easier to abide by and cheaper as than the NYSE’s requirements, so several of these stocks are traded over NASDAQ, as well as AMEX, which is also a more lenient exchange than the NYSE.

Penny stocks are typically traded on over the counter markets (OTC) through quotation services like OTC Bulletin Board (OTCBB) or the Pink Sheets which have very lenient requirements, and sometimes do not require the companies to submit official financial reports to the SEC.

You might have heard that trading penny stocks is very unsafe, but I have some methods that will minimize your risks and maximize your rewards. Here is a guide to make the most of penny stock investing.

A penny stock is considered a “hot penny stock” when its value is rapidly increasing. Penny stocks are considered “highly unpredictable,” implying that their value can rapidly go upward or downward. In order to make money on hot penny stocks, one has to buy low, wait for the stock to make a big gain, and then quickly sell.

There are a lot of risks associated with penny stocks. The low liquidity and lack of trading volume can be your best friend, or your worst enemy.  The important thing is to have a good strategy on how you want to handle your trade, and which stock you want to trade. Free Penny stock Picks are sometimes offered by penny stock newsletters.   Free Penny Stock Picks are the best way to trade cheap small-cap, penny stocks that show signs of explosive growth.

A penny stock pick is a company that is either greatly undervalued, or has some kind of situation going on that should bring immediate trading gains over the next 24 hours. Penny stock picks are your roadmap to success. They bring every investor closer to the gains they are trying to make.

Investing Online – Penny Stock Research

Investing online has become increasingly appealing to a large amount of people looking to gain good returns on their money quickly. Since the inception of the NASDAQ in 1971 investing in stocks has taken a totally universal approach and is no longer limited to banks and Ivy League stock brokers, ordinary folks with a computer and internet connection are getting in on the cut.

Low priced stocks, also ”penny stocks” have created a very profitable niche for many people investing online.to properly trade in penny  stocks will require quick acting and highly accurate stock picks if you are to make a good return for your investment.
The thing with penny stocks is you pay so little and get so much; you get to pick and investment that people undervalue and make a killing when they rise, sort of reminds you of the lady who bought a LeBron James pendant for $5 only in a yard sale, only for it to be worth $20000 later on.

If you decide to use software to help you in your stock trading and picking, be meticulous in your choice as choosing good investment software is an art in itself.

There is a lot of stock trading bogus software out there that will make you end up feeling pretty damn! Case in point: some time back when I first started investing online I decided to buy into an investment club that assured me I would make a profit overtime with them because they use highly sophisticated stock trading software that uses the latest in stock market trend detection and algorithms to pick out only the stocks that show sighs of high returns, excited I forked the $1999 membership fee.

Well after a long time and lots of trades later I made except for a huge disappointment and negative bank balance. I later came to learn that what I thought was an automated stock picking software from a reputable firm was more but hyped second rate software. What it did and still does is arrive run through various stocks and arrive arbitrary at a random pick, no algorithms or advanced trend prediction .Just plain random selection.

The lesson being take your time to select appreciate software online, you may be surprised to very cheap or even free software that  can help your course a great deal. Expensive is not always the way to go .For the day trader investing online, taking things one day at a time is no cliché.dont rush for the h next big things take your time evaluate, visit forums, read reviews as part of your serious penny stock research.

It take may take some time but starting out with a reliable brokerage software or firm will serve you investment efforts well in the long run without having the need to keep hoping from one program to another.

May people fail in this very important step, it may seem obvious, but it’s the elementary things that form the foundation of any tangible success. If you are investing  or want to make money online, you can start now with the  most respected stock picking program me  online now by  clicking at the botton of this article

Good luck with your investment online and remember

Failure is, in a sense, the highway to success, in as much as every discovery of what is false leads us to seek earnestly after what is true, and every fresh experience points out some form of error which we shall afterward carefully avoid. “John Keats

How To Start A Stock Market – Learn How To Start Trading In The Stock Market

How To Start A Stock Market

Trading in stocks has existed since the 12th century. It has come a long way from men sitting in barn yards trading in a small community, these days, however trading on the stock market has changed to an almost unrecognisable degree.

Global stock markets not account for an estimated $23 trillion in money flows. Stock exchanges such as the NYSE, NASDAQ and the London Stock Exchange are all market places for trading stocks on. These markets facilitate the trading of stocks by bringing together buyers and sellers.

Traders of stocks have many varied approaches to how they invest in the market. Some traders are risk loving and like to take large gambles when they invest in stocks. These types of traders who include day traders like to ride the wave of the minute to minute fluctuations in the value of stocks.

This allows them to make a quick buck by constantly buying and selling stocks at a mind boggling pace. Although there is the chance of making a very quick buck this way this type of trading also runs the risk of making a massive loss. It is estimated that about 80-90% of all day traders make a loss on the stock market each day. How To Start A Stock Market

However if like most people you feel you don’t have the stomach or the time for minute to minute trading, there are other methods to investing in the market. For example value traders are a much more rationale, risk adverse type of trader. They try to avoid the minute to minute fluctuations of the stock market by ignoring all the announcements made by companies and just look at the average book price of the stocks over a longer term.

Value traders search out companies they believe to be undervalued possibly because it just announced profit warnings and now which led to a dumping of shares from the company. This leaves the stock price below its average price. Value investors buy the shares at the depreciated price and then wait for them to go up in value again.

Trading on the stock market can take place in the traditional manner in which buyers and sellers come together on the stock market floor and stocks are auctioned off. Buyers and sellers act on behalf of clients who place order for stocks to be sold or bought. In recent years the traditional method has been combined with an electronic method in which orders can be placed over a network, or through the internet. How To Start A Stock Market

The Stock Wizards watch list for the week of August 23rd, 2010

Boca Raton, FL- August 21, 2010 TheStockWizards.net, a Top Penny Stock Newsletter Awareness Portal, presents stocks that have impact news and positive technical charting indicators on the OTC BB: and Pink Sheet markets. In addition to our newsletter, TheStockWizards.net is quickly becoming the fastest growing network destination for Penny & Micro-Cap stocks. With our over 30 years combined experience, our team of research analyst pride themselves on small cap companies that are diamonds in the ruff.

At The Stock Wizards, we analyze daily market activity and provide our members with our technical outlook, winning stock picks, a weekly top ten list, industry discussion, and daily trading tips from the Traders Corner section of our website.  We follow certain patterns and bring you break out alerts, volume spikes, breaking news, upward trends, mergers and more.  The Stock Wizards provides small cap investors and traders with the necessary tools and information to make informed decisions. We do all the research for you and send it straight to your inbox.

(1) LQMT (OTC) Sector: Chemicals & Allied Products

LQMT — Liquidmetal Technologies, Inc.

Is LQMT ready for a rebound? TSW stated last week a break below the $1.00 level would create a lot of volatility and very nice bounce plays. That’s exactly what we got. With the stock approaching the 20-day moving average, traders and investors will be keyed in on this technical event.

If LQMT can hold the moving average, we could see a nice rally in the stock. The volume has basically dried up. Each day the stock has dipped, volume has been increasingly lighter.

As we stated in our latest technical analysis video, we were a little concerned that there is a gap to fill at the .29 cent level. This technical event of filling the gap still remains to be seen in the short-term. Major support levels this coming week are .56 & .50. Major resistance is .82 cents.

(2) LBSR (OTCBB) Sector:  Metal Mining

LBSR — Liberty Star Uranium & Metals

Can the Bulls push this stock to a 80-100 million market cap? The stock has been on an incredible run. TSW will be watching for any signs of those short-selling market makers known as the rat pack. Their specialty is to look for stocks with very high market caps. Support Levels are .10 then .05 cents. Resistance levels are .15-.20 cents.

(3) VKNG (OTCBB) Sector: Electromedical Equipment

VKNG — Viking Systems, Inc.

Classic consolidation on VKNG. The stock had a major run last year. Will he do it again? Very nice chart set up. Can the Bulls send us higher.

(4) IDTA (OTC) Sector: Law Enforcement

IDTA — Identa Corp.

IDTA is flirting with a breakout above the 200-day moving average. The stock has been a traders delight as it has consistently made moves over the years, and seems to be ready again.

(5) QASP (OTC) Sector:  Areo Space

QASP — Quasar Aerospace Industries, Inc.

QASP has pulled back roughly 50% off  its lows. The stock is in the middle of the range and a weekly close below (.004) could be a momentum killer. The 50-day moving is getting closer to the price action as traders and investors will be watching for a breakout above this in the near future. The Bulls have their work cut out for them.

(6) MUTM (OTC) Sector: Financial Services

MUTM — Mutual Merchant Services, Inc.

Traders and Investors were anxiously looking for the weekly close above (.0004) cents. The stock briefly traded above those levels but could not hold it. Can the Bulls take control this week? All eyes are on the (.0004) level.

(7) APCX (OTC) Sector: Mobile Applications

APCX — AppTech Corp.

AppTech is in the business of developing mobile applications for international markets throughout the world. The company is focused on multi platform apps designed to run on device operating systems such as the Apple i-Phone, Google Android, Research In Motion, Microsoft Mobile, Palm, the O-Phone in China, and others.

According to public records, shares outstanding is over 2 billion. TSW thinks the upside potential is .02 cents on a conservative basis. The 50-day moving average is currently at (.0083) going into next week’s trading. Traders and investors will be watching for a move to this moving average in the near future. If the stock can get above the psychological (.005) cent level or consolidate near those levels for a few days, the Bulls could be rewarded very nicely on the upside.

(8) SFMI (OTCBB) Sector:  Mining

SFMI — Silver Falcon Mining, Inc.

TSW is always looking for low risk trading opportunities. SFMI presents itself as a low-risk opportunity in our opinion because the stock is trading right at its 200-day moving average. Very simply, if it holds a 200-day moving average you are long. If the stock breaks below the moving average, you should get out. It’s that simple. Major support areas will be .10 and .12 cents.

(9) BDGR (OTC) Sector:  Oil & Natural Gas

BDGR — Black Dragon Resource Companies, Inc.

Commodity stocks are dominating summer trading. Here is another example; BDGR a natural gas stock is looking very attractive, as it is getting ready to break above the 50-day moving average. Traders and investors will be watching this event very closely as the MACD just crossed above the zero line which is an indication momentum is coming into the stock. We could get on a nice run.

(10) SFNL (OTCBB) Sector: Short-Term Business Credit

SFNL — Secured Financial Network, Inc.

SFNL just got a weekly close above its 200-day moving average. This draws a lot of attention to traders and investors when stocks break above this moving average. A breakout above .12 cents could really send the stock higher. SFNL looks very undervalued at a 5 million market cap.

Discloser, Disclaimers: http://thestockwizards.net/about/disclaimer/

Forward-Looking Statement: This press release includes “forward-looking statements” within the meaning of the federal securities laws, commonly identified by such terms as “believes,” “looking ahead,” “anticipates,” “estimates” and other terms with similar meaning. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company’s projections and expectations are disclosed in the Company’s filings with the Securities and Exchange Commission. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. TheStockWizards.net is not a registered investment advisers or broker/dealer. TheStockWizards.net makes no recommendation that the purchase of securities of companies profiled in this website is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market their securities, investing in such securities is highly speculative and carries a high degree of risk.

PLEASE NOTE:

TSW has been previously compensated two hundred fifty thousand (250,000) unrestricted shares of Secured Financial Network (SFNL) for a 3 month market awareness program. Any compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. When compensated by a third party, please be fully aware that the third party may have shares and may liquidate it, which may negatively affect the market. When TheStockWizards.net receives free trading shares as compensation for a profiled company, TheStockWizards.net may sell part or all of any such shares during the period in which TheStockWizards.net is performing such services. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled companies.  In addition, there may be members on this board that receive compensation for particular stock awareness without telling members, so please always use your own buy and sell signals based on your own decisions.  Any recent increase in volume or increase in stock price may be due to The StockWizards.com representatives buying. The Stock Wizards intend to sell shares received as compensation for providing Company Background Information, sending opt-in emails, posting charts, videos, site moderation, consulting etc. We do not give price targets in any of our written or recorded material. TheStockWizards.net will not advise as to when we decide to sell and will not offer any opinion as to when others should sell; each investor must make that decision based on his or her judgment of the market.  Please do your own research and make your own investment decisions. Always remember that TheStockWizards.net is not an analyst and we do not employ or contract any analysts. Investing in securities such as the ones mentioned on our website, in email, or consulted for are for high-risk tolerant individuals only and not the general public.

Release of Liability: Through use of this website viewing or using you agree to hold TheStockWizards.net, its operators owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources, which we believe to be reliable, but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TheStockWizards.net affiliates may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. Any opinions expressed are subject to change without notice. TheStockWizards.net encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TheStockWizards.net makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. Investing in micro-cap and growth securities is highly speculative and carries and extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. In preparing this publication, TheStockWizards.net has relied upon information supplied by its customers, and press releases, which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies.

Three Tips to Make and Protect Penny Stock Gains

Here at Penny Sleuth HQ we’re often asked what we think about Company A, or Stock B, or Product C. Maybe “often” isn’t strong enough of a word – we get these emails by the hundreds! And while we can’t offer individual investment advice, we certainly can give you the tools to analyze these stocks based on the years we’ve spent in the penny stock trenches.

Most investors realize that there’s something very different about penny socks. After all, how can the smallest companies out there offer some of the biggest returns?

But while small-cap profits can be bigger than those you’d see with a company like General Electric or Exxon Mobil, there are still three red flags that you should be watching out for in your penny stock investments right now: lack of liquidity, paper thin margins, and sparse volume. Keep these three items in check, and your chances of investing your way to profits in 2009 will be greatly increased. More on that in a minute…

1. Lack of Liquidity

When fundamental investors (people who invest on stocks based on their business, assets, and growth potential) talk about liquidity, they’re referring to balance sheet liquidity – a company’s ability to convert their assets into cash in a pinch.

That’s a pretty important characteristic right now.

After all, while cash may seem in short supply during this recession, the small-caps we focus on won’t be getting any bailouts from Uncle Sam anytime soon. That’s why it’s so important to make sure that you’re putting your money in companies that have the wherewithal to survive for the long-term.

When looking at a company’s balance sheet (which you can find for free at sites like Google Finance), the first thing to remember is that cash is king during a recession… the more cash a company has in the bank the longer they’ll be able to survive if times get tougher.

Another valuable measure of a company’s staying power is its interest coverage ratio. The interest coverage ratio divides a company’s earnings before interest and taxes (EBIT) by its interest expenses, and gives investors a glimpse at how easily a firm can make its debt payments. A number above 1.5 is generally a good sign.

2. Paper Thin Margins

While larger companies usually keep their margins in line from quarter to quarter and from year to year, smaller companies don’t always have that same consistency. Net margins, which show what percentage of sales translates to profit, give investors a good idea of how susceptible a company is to declining revenues.

When margins are exceptionally small, watch out – it could mean that your company is a quarter or two away from posting a loss.

The most important thing to look for with a company’s margins is the way they behave over time. Slipping margins could be a sign that a company is losing its footing, whereas slow margin growth could mean that the company is becoming more efficient at turning a profit.

3. Sparse Volume

While our first two red flags focused on a company’s financial statements, sparse volume is all about the stock market. A stock’s “volume” is a term used to describe how many shares traded hands during a given period. Average daily trading volume is a pretty common indicator of how frequently a stock trades, and you can find it just by going to any stock’s Google Finance page.

Volume is important for a very good reason – stocks that don’t have a decent amount of trading activity are incredibly unpredictable. That’s because in the stock market, we – the people who buy and sell the stocks – set the prices. When a stock has low volume, it means that a small number of people have control over that stock’s price, and a relatively small number of shares can drastically skew a company’s value.

It also means that other investors aren’t particularly interested in investing in that company. That’s significant because it means that even the best companies can stay undervalued for long periods of time if they don’t have reasonable volume.

Make sure your small-caps trade daily, or you could be locked in a waiting game to make money on your investment.

Building a Better System

Keeping an eye on these three red flags is a good start when you’re trying to analyze a new penny stock. Remember though, all three of these measures are subjective, so it’ll take some experience before you’ll be able to discern the difference between liquidity that’s “good” or just “average”.

But what if you can’t have your eye on the markets all the time? That’s where stop losses come in.

Basically, a stop loss (or stop, or stop order, etc) is an order with your broker to sell your shares in a particular stock automatically when its price hits a specific level. That means if your shares of Stock A are up 30%, you can set a stop loss to trigger when the stock drops to 25%, guaranteeing your minimum profit.

While there are several different types of stop losses, these three flavors are worth knowing about:

Stop Order: Triggers once your stock reaches a specific target price, the stop price. Trailing Stop: Triggers at a specific change in price, measured by either percentage points or dollar value. Stop Limit Order: Similar to the stop order, except for the fact that a limit order is triggered once your stock reaches a specific target price. (i.e. sell high, and re-buy low)

Clearly, the biggest benefit of placing stop losses is the fact that you won’t have to lose sleep over your open positions – if the stocks you own take a big dive, your positions will sell off before any major damage is done. That’s a pretty compelling case for using stops.

Still, that’s not the whole story…

Drawbacks of Stop Losses

The biggest reason that people lose out on stop losses is through short-term fluctuations in stock price. If you have a stop set at 5% below a stock’s current price level, and the stock swings 10% in the week, your stop will trigger and you’ll miss out on the stock’s rebound. As a result setting your stop losses intelligently is essential.

But exactly where to place your stop-losses is another tricky bit of business. It takes even the most skilled traders a good bit of trial and error to learn what works when it comes to setting stop losses.

If you’re a believer in fundamentals, it’s best to think of stop losses as profit keepers. You should place them at the level of gains you’re comfortable walking away with. If one of your positions is up 20%, 15% gains may be the least you’re willing walk away with – if that’s the case, it makes sense to put your stop losses there.

Even if you’re a fundamental investor, stop losses can be most valuable when they’re combined with technical analysis (using chart patterns to determine where a stock’s price is going). After all, technicals are what drag fundamentally sound companies down during a bear market. Unlike with fundamentals, where stop losses can be considered “profit keepers”, you can think of technical stop losses as insurance – a way to ensure that your stock won’t go into freefall.

Stops can be very useful when they’re placed under a stock’s support level (the price level that a stock has trouble falling below). That’s because to a trader, a price level below support generally means that the stock could be breaking out much lower.

Don’t Stop the Stops

Whatever your investing strategy, stop losses can be a valuable part of your investing toolbox. That said, using stop losses and other more complex broker orders can be tricky for beginners – always make sure you understand what you’re doing before you commit money to a trade. Here at the Penny Sleuth, we’ll keep doing our best to provide you with an investing education.

Cheers,
Jonas Elmerraji