Posts Tagged ‘Earnings’
How to Value a Penny Stock.market Cap !
Written by troy on Tuesday, May 12, 2009 | No Comments
Categories: Uncategorized Tags: Earnings, Pennies, penny stock, penny stocks, Small Caps
So, you want to know how to VALUE a penny stock do you?… Ok then class, we’re about to begin:
Penny shares
The term ” Penny Stocks” ( or Micro’s )simply implies JUST THAT….stocks that trade under $1.00. Now, without getting too technical… from time-to-time certain stocks that once traded in pennies, can breakthrough that IRON CLAD ceiling of $1.00. From here ( $1.00 )….to “usually” the $5.00 level…. you are now dealing with SMALL CAPS ( Small Capitalization ). So… with a PLETHERA of penny stocks to choose from…..how does one PROPERLY place a value upon it’s shares?…..I mean, the VERY reason they’re trading under $1.00 tells us all something….. do you wanna know what that is? Oh….you do?…..GOOD!!! ’cause i’m telling you anyways…..lol…
THEY HAVE NO EARNINGS!!!! NO INCOME!!!! (usually)
So, with that said…. how do “we” compare one to the next to determine whether or not “we’re” getting ripped off? SIMPLE!!!!
MARKET CAP / MARKET CAP / MARKET CAP!!!! ( Market Capitalization )
Once you’ve set your sights on a JUICY penny play….you need to do 3 VERY simple things:
1) Find out the TOTAL ( very important ) number of shares issued and o/s ( outstanding )
2) Take the current price ( the price you see TODAY in the market )
3) Multiply the TOTAL # of shares o/s by the current price.
TADA!!!! You’re done!!!! ( how hard was that?!?! )
example:
ABC Company ( lets say they looking for GOLD…have a property or 2 )
6 million shares o/s
0.30 ( Current Price )
6,000,000 x 0.30 = $1,800,000
Now… the trick is to find another company that does the very same thing ( looking for GOLD ). Apply the same multiple to that company now. Compare the two.
So, with that said… let’s compare ABC Company to:
DEF Company ( also looking for GOLD )
20 million shares o/s
0.55 ( Current Price )
20,000,000 x 0.55 = $11,000,000
UUUMMMM DUH…..Which one is a BETTER VALUE?!?!?!?
YOU’RE RIGHT!!! ABC Company gets my money!!!!!
You see people….
This idea behind the advocacy of penny shares is that low priced shares have more potential to rise, and therefore investors should do their stock-picking by selecting from among penny shares.
The idea is fundamentally flawed. Looking at price alone, without any indication of what value a share has is not meaningful. A share price can only be said to be too high or low relative to earnings per share, assets per share, or some such similar measure.
It is not possible to say what a share ought to be worth without properly valuing it. Once a real valuation technique has been used, the fact that it is a penny share is irrelevant.
The falsity of the idea that penny share are in some way special is evident if one considers that a company can decide whether its shares are penny shares are not by consolidating or splitting its shares.
What little value techniques based on the penny share idea have is attributable to the fact that penny shares tend to be those of small companies and those whose price has fallen from more conventional levels. The former are more likely than large companies to have good growth prospects. The latter are more likely to be recovery stocks
Investors are better off using the more precise technique of screening by market cap to find small companies, and looking at historical data to find recovery stocks.
( now apply what you’ve learned to my previous postings!!! )
Let’s make $$$$ together!!!!
This article was written by placer_foot of Stockhideout.com
Penny Stocks, Stock Picks – SHO
By: rob rens
About the Author:
Penny shares
The term ” Penny Stocks” ( or Micro’s )simply implies JUST THAT….stocks that trade under $1.00. Now, without getting too technical… from time-to-time certain stocks that once traded in pennies, can breakthrough that IRON CLAD ceiling of $1.00. From here ( $1.00 )….to “usually” the $5.00 level…. you are now dealing with SMALL CAPS ( Small Capitalization ). So… with a PLETHERA of penny stocks to choose from…..how does one PROPERLY place a value upon it’s shares?…..I mean, the VERY reason they’re trading under $1.00 tells us all something….. do you wanna know what that is? Oh….you do?…..GOOD!!! ’cause i’m telling you anyways…..lol…
THEY HAVE NO EARNINGS!!!! NO INCOME!!!! (usually)
So, with that said…. how do “we” compare one to the next to determine whether or not “we’re” getting ripped off? SIMPLE!!!!
MARKET CAP / MARKET CAP / MARKET CAP!!!! ( Market Capitalization )
Once you’ve set your sights on a JUICY penny play….you need to do 3 VERY simple things:
1) Find out the TOTAL ( very important ) number of shares issued and o/s ( outstanding )
2) Take the current price ( the price you see TODAY in the market )
3) Multiply the TOTAL # of shares o/s by the current price.
TADA!!!! You’re done!!!! ( how hard was that?!?! )
example:
ABC Company ( lets say they looking for GOLD…have a property or 2 )
6 million shares o/s
0.30 ( Current Price )
6,000,000 x 0.30 = $1,800,000
Now… the trick is to find another company that does the very same thing ( looking for GOLD ). Apply the same multiple to that company now. Compare the two.
So, with that said… let’s compare ABC Company to:
DEF Company ( also looking for GOLD )
20 million shares o/s
0.55 ( Current Price )
20,000,000 x 0.55 = $11,000,000
UUUMMMM DUH…..Which one is a BETTER VALUE?!?!?!?
YOU’RE RIGHT!!! ABC Company gets my money!!!!!
You see people….
This idea behind the advocacy of penny shares is that low priced shares have more potential to rise, and therefore investors should do their stock-picking by selecting from among penny shares.
The idea is fundamentally flawed. Looking at price alone, without any indication of what value a share has is not meaningful. A share price can only be said to be too high or low relative to earnings per share, assets per share, or some such similar measure.
It is not possible to say what a share ought to be worth without properly valuing it. Once a real valuation technique has been used, the fact that it is a penny share is irrelevant.
The falsity of the idea that penny share are in some way special is evident if one considers that a company can decide whether its shares are penny shares are not by consolidating or splitting its shares.
What little value techniques based on the penny share idea have is attributable to the fact that penny shares tend to be those of small companies and those whose price has fallen from more conventional levels. The former are more likely than large companies to have good growth prospects. The latter are more likely to be recovery stocks
Investors are better off using the more precise technique of screening by market cap to find small companies, and looking at historical data to find recovery stocks.
( now apply what you’ve learned to my previous postings!!! )
Let’s make $$$$ together!!!!
This article was written by placer_foot of Stockhideout.com
Penny Stocks, Stock Picks – SHO
By: rob rens
About the Author:
Placer_foot member of StockHidoeut.com Penny Stocks, Stock Picks and Stock Bulletin
Penny Stock Brokers – The Secret They Hide From You
Written by troy on Sunday, April 26, 2009 | 1 Comment
Categories: Uncategorized Tags: Earnings, penny stocks, Stock Broker
Many people think penny stock brokers are a sure way to make a killing day trading. The truth is, they are not the solution at all. Think about it, why should penny stock brokers care if you make a ton of money. As long as they get paid, they are happy. The only person that wants you to make it big enough to help you is you yourself. That is why only you can trade penny stocks in a way that can make you a ton of money.
Penny stock brokers are paid a commission of your buy and sell price, plus a flat fee for there services. It really makes no difference to them if you make a million dollars or lose a hundred dollars. They are still going to get paid more than they deserve. It is so sad to see so many people fall into these penny stock brokers tricks. It is so easy to be you own penny stock broker these days.
There are many online businesses that you can trade though without the help of penny stock brokers. All of them are far less expensive and put the control back into your hands. I have been trading penny stocks on my own for nearly three years now, and have experienced great success. I make much more money then when I used penny stock brokers. This saves me countless dollars that would have been lost on penny stock brokers commissions.
There are a ton of techniques one can use to trade penny stocks just as well as any penny stock broker. Many of my techniques I picked up on my own. After I did, my earnings sky rocketed! I quickly earned my financial freedom and was able to quit my day job and become a full time day trader! Every time I hear someone talk about penny stock brokers it makes me think back when I used to waste my time and money on them. Do not fall for their tricks. They are completely unnecessary and really are probably not that good at trading penny stocks anyway.
I used to call my old penny stock broker to ask her about a stock. No matter which stock I asked about, she told me to go for it. She did not care if I succeeded or not. Heck, sometimes she would buy into a stock I would recommend! Where is my commission!
Do not waste your time on penny stock brokers. Learn the ropes and do it yourself. You will be surprised how good you can be!
By: Michael Pergrem
About the Author:
Penny stock brokers are paid a commission of your buy and sell price, plus a flat fee for there services. It really makes no difference to them if you make a million dollars or lose a hundred dollars. They are still going to get paid more than they deserve. It is so sad to see so many people fall into these penny stock brokers tricks. It is so easy to be you own penny stock broker these days.
There are many online businesses that you can trade though without the help of penny stock brokers. All of them are far less expensive and put the control back into your hands. I have been trading penny stocks on my own for nearly three years now, and have experienced great success. I make much more money then when I used penny stock brokers. This saves me countless dollars that would have been lost on penny stock brokers commissions.
There are a ton of techniques one can use to trade penny stocks just as well as any penny stock broker. Many of my techniques I picked up on my own. After I did, my earnings sky rocketed! I quickly earned my financial freedom and was able to quit my day job and become a full time day trader! Every time I hear someone talk about penny stock brokers it makes me think back when I used to waste my time and money on them. Do not fall for their tricks. They are completely unnecessary and really are probably not that good at trading penny stocks anyway.
I used to call my old penny stock broker to ask her about a stock. No matter which stock I asked about, she told me to go for it. She did not care if I succeeded or not. Heck, sometimes she would buy into a stock I would recommend! Where is my commission!
Do not waste your time on penny stock brokers. Learn the ropes and do it yourself. You will be surprised how good you can be!
By: Michael Pergrem
About the Author:
If you want to take matters into your own hands and be your own penny stock broker, good for you! You can find out great techniques and several tools that will help you day trade for a living here: http://www.squidoo.com/daytrading-for-a-living. Thank you for reading and good luck!