Monday, July 18, 2005

 

Chinese penny stock?

My portfolio managed to squeak out a $200 gain today. I also opened a new position in a little Chinese bulletin board company whose shares are trading at only about 35 cents. Yeah yeah, I know what you're thinking: Chinese penny stock.. say goodbye to that money. But the company seems legit so I took a gamble and bought 10,000 shares.

When it comes to penny stocks, there are three thing that I require before I even consider buying the shares. One, the company has to be fully reporting to the SEC. Companies that don't report often have something to hide. Two, the company has to have a history of profitability. The easiest way to discern that is to look at the retained earnings line in the balance sheet. Three, there can't be any significant dilution over the past year. This one is critical. My advice to you is to avoid any penny stock where management is diluting existing shareholders by issuing new shares. Remember, even if a stock is trading at 35 cents, it's still a 100 percent loss if it goes to zero. Finally, please let me remind you to read my disclaimer if you are thinking of replicating my trading and investment decisions (which I strongly discourage and completely disavow).

Comments:
I think your first instinct is correct. Say goodbye to your money. What's the catalyst here?
 
Great job stockcoach! 160 rm. hotel, rated 4 star with 600 seat convention ctr., Las Vegas style nightclub, bowling alley, and lst class restuarant. and its turned a profit every yr. Its worth at least 10 mil.. stockholders own 90%. Plus the co. has generated 14 mil. in free cash flow over last 5 yrs. Clean balance sheet. As long as they dont waste money on worthless acquisitions, I don't see the risks. How do I buy a penny stock? Would a limit bid of 36 cents get the job done?
 
You gotta be patient. I had to wait several days for my limit order for 10000 shares to be filled at 0.36. Don't even think about setting a market order for this stock. You'll get killed.
 
Thanks, stockcoach, I put a limit order in for 6000 shares. By the way, I am Big O, but for some reason the Blog wouldn't take my name so I sent it under anonymous. Again, thanks for the tip. If you have the time, check the sec filings on AXR. Its had quite a runup in the stockprice and I've owned it for about a yr., but its still undervalued and I added to my position yesterday.
 
Speaking of asian stocks. Are you thinking of jumping back in on ASIA? It has been doing very well the last few months. I am tempted...

What do you think of JAKK? Bought a few shares a few days ago. Dont really know why it has such a high short interest.

Scktt
 
Could it be that it spends more money on cap ex. that it takes in every yr. and the only way to finance these cap ex. is by issuing stock and adding debt. It seems as if it spends more money than it makes to beef up the earnings report. I think a better play is KDD. if you have the patience to wait for another Pokeman. Big O
 
Make that KDE. Big O
 
"I just came across your blog about **keyword** and wanted to drop you a note telling you how impressed I was with the information you have posted here. I also have a web site & blog about top penny stock so I know what I'm talking about when I say your site is top-notch! Keep up the great work, you are providing a great resource on the Internet here!"
 
You are welcome to visit my site about penny stocks
 
AN E has been added to the end of YIWA's ticker. This usually means they are behind on their SEC filings. Does anyone know why YIWA has fallen behind?
 
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