本文发表在 rolia.net 枫下论坛Penny stocks - those that sell for less than $5 over the counter - are the slot machines of the equity market. Care to risk a couple of quarters?It's tempting, with the established exchanges now brimming with household names like Corning in the penny-stock range. The fiber-optic-equipment maker was once a 100$ stock.Now it trades near a buck fifty. Wireless-phone compay Sprint is at $9.25;computer retailer Gateway,$3.58; Sun microsystems,$3.66. How can you lose? But as anyone who has been cleaned out by a 25c slot can tell you,this is risky territory.
The trick is to separate the fallen angels from the real sinners. "If a stock is trading at $1 and it was trading at $50,it is telling you that unless a rabbit is pulled out of a hat, it is going bankrupt," says Jason Selch,analyst with Wanger Assett Management, based in Chicago,which manages the Liberty Acorn Funds. Selch looks for orphans,stocks that have fallen so far out of favor that even brokers aren't paying attention th them.One orphan he owns is Navigant Consulting,which traded as high as $50 in 1999 and is now less than $6, a casualty of serveral class actions. Selch thinks the firm's current focus,financial-claims consulting,has promise.After initially misfiring by buying shares at $10,he bought shares at $2, a price that was equal to just the company's net cash.
Selch advises induvidual investors to wait for a stock to stablize in a price band for serveral months."When things are going down rapidly,there is a good chance they won't come back", he says. "If they were trading at $50 and came down to $2 and stabilized,changed management,then most likely they will recover. Maybe they won't recover to $50,but they will recover to something."
Share price doesn't tell the whole story. A company can control, to some extent, the price range of its shares by executing a "reverse split." Thchnology companies in particular are using reverse splits - reducing the number of shares at the same market value so each share is worth more - to keey their share prices above $1. Any lower,and they will get kicked off the major exchanges.
Pay particular attention to debt. Stan Majcher warns that if a company trades below $2 and carries a heavy debt load, the chances of long-term suvival fade. With plenty of cash and a sensible strategy, the odds are better.That's why Majcher likes Gateway.更多精彩文章及讨论，请光临枫下论坛 rolia.net
The trick is to separate the fallen angels from the real sinners. "If a stock is trading at $1 and it was trading at $50,it is telling you that unless a rabbit is pulled out of a hat, it is going bankrupt," says Jason Selch,analyst with Wanger Assett Management, based in Chicago,which manages the Liberty Acorn Funds. Selch looks for orphans,stocks that have fallen so far out of favor that even brokers aren't paying attention th them.One orphan he owns is Navigant Consulting,which traded as high as $50 in 1999 and is now less than $6, a casualty of serveral class actions. Selch thinks the firm's current focus,financial-claims consulting,has promise.After initially misfiring by buying shares at $10,he bought shares at $2, a price that was equal to just the company's net cash.
Selch advises induvidual investors to wait for a stock to stablize in a price band for serveral months."When things are going down rapidly,there is a good chance they won't come back", he says. "If they were trading at $50 and came down to $2 and stabilized,changed management,then most likely they will recover. Maybe they won't recover to $50,but they will recover to something."
Share price doesn't tell the whole story. A company can control, to some extent, the price range of its shares by executing a "reverse split." Thchnology companies in particular are using reverse splits - reducing the number of shares at the same market value so each share is worth more - to keey their share prices above $1. Any lower,and they will get kicked off the major exchanges.
Pay particular attention to debt. Stan Majcher warns that if a company trades below $2 and carries a heavy debt load, the chances of long-term suvival fade. With plenty of cash and a sensible strategy, the odds are better.That's why Majcher likes Gateway.更多精彩文章及讨论，请光临枫下论坛 rolia.net