Gary Halbert · whole document (49)
zhlk promote website
But, my friend, we ain't done yet. Not by a long shot. Just
because a stock is selling for less than $5.00 and listed on the NASDAQ
doesn't mean it makes the cut. Nope, all we've identified here is the
"preliminary pool" of stocks we are even willing to look at. There
are numerous other hurdles even
these stocks have to overcome before they qualify as a "pick."
The first of the next hurdles is volume. If a stock has a very
thin daily volume, just the fact you invest in that stock will make it
skyrocket in price.
Conversely, if the daily volume is too high, way too
much of a mountain of money has to be moved to effectuate a 50% or more jump
in price.
If you are at all active in the stock market, you are already
aware of the success of a small group of stock market experts (they really
are) who have an informative website and write books on a how a "Motley
Fool" should invest in stocks. I recommend their material since it's very
informative. Here's an eight item checklist they use to select stocks worthy
of further examination:
1.
Sales of 200 million... or
less!'
2.
Daily dollar volume of trading three million dollars... or
less!
3.
Low share price between
$5.00 to $20.00. They maintain stocks priced at less than $5.00 are "junk." I disagree.
4.
Net profit margin of 10%
or more.
5.
Relative Strength (study
Investor's Business Daily to
learn what this means) of 90 or higher.
6.
Earnings or sales growth
must be 25% or greater this year than it was for the same quarter last
year.