A common feature of some, but not all, micro-cap stocks is low liquidity. This is extremely common for stocks not trading on a major exchange, such as the OTC or OTCQB. But what does low liquidity mean exactly? And how do investors deal with the liquidity premium in valuing a particular company? Liquidity – The … Read more
There are many misconceptions floating around the internet on stock buybacks and their implications. Presidents, congress, and political commentators have scorned them for years as corporate greed, corporate mismanagement, or just down-right immoral! But what exactly is a stock buyback? And how do they differ from a cash dividend? Let’s try and cut through the … Read more
Occasionally as you’re flipping through the droves of companies on your screener, getting a migraine from seeing negative shareholder equity and negative 10,000% net margins, you find an easter egg. A profitable company in the wild! You flip over to Twitter and type in the ticker…nothing! Just a bunch of tweets from three months ago … Read more
A company has three general buckets of ownership stakes, traditional debt such as a loan, a preferred share, and common stock/equity. When a company is liquidated, each of the investment stakeholders have different priority rights to the remaining company assets. They are traditional debt, preferred shares, and then common equity in that order. Preferred Shares … Read more
So you’re new to pennies, you’ve seen the rocket ship emojis and want to go along for the ride. You type your favorite ticker into Twitter and are immediately blasted with 50 tweets in five minutes of the same press release a company made 4 months ago. You come to realize pretty quickly that the … Read more
