There is a much more profitable and much more honorable way to make money that flogging worse than worthless stocks. Flogging worse than worthless stocks is very common. Just one example on InvestorsHub.com there is a BB's Stock Haven that gets over 200 posts a day.
I copied the newest 10 posts there, and looked at the financial results on Yahoo for them, culling it to 7 stocks as one poster posted 5 in a row, so just took his first 3. Every one, 100% of them were worth less than worthless. A dog turd is worthless but you are better off owning a dog turd than these companies because each one of them would bankrupt you if you did own them. First the stocks, then the #s: BB's Stock Haven
LBAS https://ca.finance.yahoo.com/q/ks?s=LBAS $2 million loss a year, 250k cash, $12 million debt, does have $2 million sales, huge negative book value
MFST https://ca.finance.yahoo.com/q/ks?s=mfst&ql=1 $195k cash, lost $624k in last year and 444k debt, AND ZERO SALES
EQLB https://ca.finance.yahoo.com/q/ks?s=EQLB&ql=1 $57K revenue (worse than a failed hot dog stand), $560k debt, losing $411k in cash flow a year.
I will not pick more than first 3 companies of any poster so jump ahead to
FREEF https://ca.finance.yahoo.com/q/ks?s=FREEF Lost $52 million last year has $20K cash!! Need we look further? BTW has $18 million debt and $2 million revenue.
FDBL https://ca.finance.yahoo.com/q/ks?s=fdbl&ql=1 This actually has a market cap of $1.5 million, and $84k revenue and lost $4.5 MILLION! And 113k cash and 1.7 million debt, yikes.
PHOT https://ca.finance.yahoo.com/q/is?s=PHOT&annual its lost $110 million in last 3 years
IDGC https://ca.finance.yahoo.com/q/ks?s=IDGC this company actually has $513K that is real revenue, but the company has a market cap of $449.00 so you can buy the whole shebang for less than 500 bucks. Lost 2.4 million last year and has 114k cash!
See how if someone gave them to you for free each one would bankrupt you as they are losing much more money than they have left? Pretty simple isn't it?
So why are they being flogged (promoted) endlessly? It is the “Greater Fool” method, buy something worse than worthless and sell it for more to a greater fool. The buyer may be another greater fool operator or a real fool. If the buyer than gets conned into buy these worse than dog turd stocks is a real fool who believes the hype, it could ruin their retirement. In fact no doubt some people have been made homeless by believing the hype on worse than worthless stocks and investing their life savings in them. That makes the hypers and floggers of these stocks who know they are worthless, not very honorable. What a waste of human effort and capital.
What is the better solution? Hyping and promoting real companies that are worth more than the current value. First it is honorable, second they will not disappear in months or years AND they will tend to go up a lot more. Why not promote real profitable companies? It has worked for me. My long term investment record without using margin in my IRA is over 20% CAGR (Compounded Annual Growth Rate) over 14 years, that is about 3 times better than Warren Buffet's track record (8.28ÊGR) for the same 14 years in terms of CAGR%, and Buffet uses heavy margin. And CAGR% is not linear in terms of results so end results are way better than 3 times better than Buffet's.
How did I do it? Similar to Buffet am a value investor but unlike Buffet I do not shy away from low priced stocks. A big myth is low price means its a scam, and 2ndly I go after stocks that can go up 5 or 10 times or even better than that, and been blessed to have that happen several times.
There can be stocks under a penny that are profitable and have more cash than market cap (the total value of stock if you bot it all, read on as will tell you about two of them). So why do the floggers on Ihub's BB Stock Haven and countless similar stock flogging sites not promote real profitable stocks with value that can run so much more than worthless stocks can? Good question. Maybe they do not know how to find them, nor even thought of doing such a thing.
One reason is that maybe 60% of people who invest are not capable of understanding financials or quarterly reports. Instead they go for the 2 most dangerous words on Wall Street “Concept Stocks”. Remember Pets.com and myriad other internet stocks in 1999 that had $100 million+ mkt caps? Those stocks are worthless today beyond being used as toilet paper, and they were worthless in 1999 too, just their investors did not know it. They never made profits.
There are always new worthless “concept stocks” with huge valuations that the big brokerage houses promote and give top ratings to like $billion+ Sun Edison (SUNE, gee the sun is free so solar energy must be free too) http://www.stockgumshoe.com/reviews/energy-advantage/the-greatest-leap-of-mankind-unlimited-free-energy-dr-kent-moors-picks-revealed/ , check out that chart, dropped like 99% in last year and is in bankruptcy.
So the solution is never investing in worthless stocks even if Wall Street says they are wonderful, but how do you do that? It is not all that hard. If you can read financials go after profitable companies that are not in debt trouble and buy the most extremely undervalued ones.
If you are like most investors that do not understand what EBITDA is or what FCF (Free Cash Flow) is, you can still do better than 80% of mutual finds. Two ways, one just buy the SPY (SP500 the biggest 500 companies in USA), how easy is that? And it beats about 80% of mutual funds and has tiny fees.
If you want outsized returns, like 15%, 20% or more per year as I have been fortunate to get, and you can not read financial reports and truly understand them (most investors, be honest with yourself) then you still can do it. By using stock screeners that do the math for you. I have used a few and have settled on UncleStock.com. The single most effective metric is EV/EBITDA according to academic studies.http://www.wallstreetdaily.com/2014/06/06/ev-ebitda-valuation-metric/ andhttp://www.valuewalk.com/2011/12/evebitda-is-best-valuation-metric-according-to-new-study/ Why it is better than P/E ratio is that EV/EBITDA pays attention to debt and cash and both are super important to the health of a company, P/E does not.
EV = Market Cap + Total Debt + Preferred Stock + Minority Interest – Cash
EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
In a nutshell roughly a 5 EV/EBITDA means in 5 years the company will pay you back for the cost of buying it, quite good. A 1.5 EBITDA means it will pay you back in 1.5 years and in the next 1.5 years it will pay you back again, and so forth. The lower the better. 1.5 is sensational, but they do exist. My biggest position in 2014 and 2015 was CLGRF a 1.2 EV/EBITDA stock that went up over 25 times (2400%) in 2.5 years.
I have used EV/EBITDA a lot but most stock screeners have a flaw, if EBITDA is negative, it is losing money. The formula gives negative ratio just as if only the EV was negative ( negative EV is a good thing it has more cash than mkt cap, the company is for free, it happens read on) and if Both EV and EBITDA are negative it gets a positive rating. So 90% of the stocks with the lowest EV/EBITDA in screeners were actual poor value stocks that had to discard which required time reading the financials. Then found that UncleStock.com has a new version called Allen EV/EBITDA that fixes the problem. It is named after an investor Dana Allen that was selected as one of the best in the book “Millionaire Traders” by Boris Sclossberg and Kathy Lien.
In fact UncleStock has a screen in the public area that is simply an Allen EV/EBITDA < 1.8, and it is labeled as that, and it has a compounded annual return of 36% over the last 5 years!! That is way better than almost every hedgefund there is over same period. It looks like it finds about 10 stocks a year. And see it has 3 stocks I have or have had this year, FPRX, NTIP and MAH.AX. Whole lot less work than I did to find those. What does 36% do? In 15 years $10,000 becomes over $1,000,000 and in 20 years it becomes $4,685,000 or 46 times more.http://ncalculators.com/investment/cagr-compound-annual-growth-rate-calculator.htm
And it made money every year, and is up 47% so far in 2016, wow. And so simple. So I suggest finding a screen like that, then select the stocks you like the most on the list. That is why I use UncleStock, they have back-testing built in.
Then if you want to promote them you are promoting something likely to make you and others money, instead of ruining people with worse than worthless stocks.
I “promoted” CLGRF when it was under 0.15 just using the facts and it went to near $3.00 after rising then being bot by SSRI then SSRI rising, sold out in August the last of it for over 25 times my low buy of 0.12. A friend of mine just bought a near $1 million dollar home and land with most of the money coming from profits from that one investment. CLGRF had a EV/EBITDA of 1.2 at one point when it was low.
Now for two specific stocks, one on the Allen EV/EBITDA < 1.8 list above, NTIP. Here are the numbers: https://ca.finance.yahoo.com/q/ks?s=ntip&ql=1 NTIP just came out with a Q that was sensational. They made a big sale to Apple and Dell and just in last 3 months (Q) their cash went from $35 million (shown on link) to about $58 million and a few days ago it had a market cap of about $60 million. https://ca.finance.yahoo.com/q/bs?s=NTIP
And Net Income was $2.4 million in 12-31-2015Q and $10.8 million in last Q (9-30-2016) So their EV/EBITDA today is about 0.3!! and NTIP had the best EV/EBITDA in USA according to that UncleStock Screen for a company that was profitable in last Q, when it was 1.5!! (lower is better) This means With NTIP's now $10 million Enterprise Value and $11 million profit in the last Q it pays you back over 100% for owning it every Q, 4 times a year if you owned all the stock. It has an current EV/EBITDA of about 0.3 by my calculations.That is truly amazing.And should show up as such on Yahoo soon. Note they did have a great Q and thenext one may not be as good, BUT $10 million EV and $11 million profit in last Q is fantastic even if not repeated.
They are getting patent fees from big NASDAQ 100 firms and will get more. Read their last few PRs.
NETWORK 1 TECHNOLOGIES INC FinancialsEDGAR Online Financials(Sat Nov 19)
If you are going to promote a stock, why not a stock that is for free? Last week it had as much cash as the value of the stock! And it has gone up some since their results are out, made new multi-year high on Friday.
And such stocks exist in the sub penny world. The best sub penny one know of is BWMG, Brownies, is not on the list only because it has less than $60,000 a day trading volume. The stock price was sub penny last week. So there are super value sub penny stocks too.
That is understandable (< $60K Volume) being the whole company was worth less than $300,000 on Wednesday. They came out with good numbers in their Q too, but the numbers were already spectacular before that. They now have over $300,000 cash and made over $300,000 profit in last year and the market cap was think $260,000 on Wednesday. And it is a famous 40 year old company, Brownies. They sell scuba diving systems that just use a hose (hookah) not a tank. http://www.browniesmarinegroup.com/ Their sales are about $2 million a year so it had a .13 Price/Sales ratio and the normal ratio is 1.8 in the industry. So going up 15 times would not be unusual, that would be just an average value if it did go up 15 times.
There is is more, the stock price? It was 0.005 a share even after the Q came out. On Friday it was .0077 as buying did come in. Here are the numbers https://ca.finance.yahoo.com/q/ks?s=bwmg&ql=1
Remember the last Q is not updated in those numbers, that takes about 2 weeks at Yahoo. Here are the new SEC numbers showing the huge improvement in cash and book value http://ih.advfn.com/p.php?pid=nmona&article=72903979 It also has great detail on the condition of the company.
The market cap is now $450K because of price rise, The float (stock owned by public not insiders) is half of that, about $225k!!! And that is after it went up. It was $150K early in week. I own about 4.5% of company, most of it bought this week. Other people who are unlikely to sell and have posted about it likely have another 8% of company, so that means about 24% of the float is gone, so maybe $140K of float is left to buy. On a stock that days ago had 7 times more sales than stock value, more profits per year than stock value and more cash than stock value! Are you kidding me, and almost no float dollar wise.
Why are the full time promoters of worse than worthless stocks not promoting BWMG? Its less than a penny, right up their alley except its profitable and if it just went to normal values would go up about 15 times to $.10 a share. If it went to triple average value (common with momentum) it would go up 45 times! My experience is the biggest gainers, and I have had several 20+ baggers, are undervalued profitable companies like BWMG
I am truly curious as why penny stock promoters are not on BWMG, it could move so easy with some promotion, it has virtually no $float and is on a profits and sales basis worth about 15 times more than current value.
All my 10 bagger of better stocks were undervalued profitable stocks. As the title stated Floggers Of Worse Than Worthless Stocks, There Is A Better Way, Flog Real Companies