Confirming the value of a penny stock using comparison numbers
71What's the difference
when is a penny stock undervalued?
- When is a penny stock worth more than a penny? APNX as my study
Investing in penny stocks is at best a crapshoot, a risky endeavor. Many penny stocks are hyped by promoters who benefit from the rise and fall of the stock as investors respond to their hype buying...
The gold in penny stocks
Investing for profits in stocks requires understanding the markets and being able to identify when a stock is undervalued. Most often those of us who invest in penny stocks invest in hype. The decision to invest is made as a result of a news release we read or a newsletter from one of the many promoters who are paid to increase the stocks value. We jump in head first before we take the steps to determine if the company is worth our investment. When this occurs, losses are the general result for many.
It is my goal to help increase ones success when investing in penny stocks. An earlier hub discussed the value based on general guidelines I created as a basic beginning to identifying value and a reason to invest.
One of the criteria I use as a basis is a companies annual sales. My guidelines include a general range for a stocks value based on their annual sales. See below:
What is their yearly sales. Most penny stocks (under $1.00) have yet to prove themselves in the market, sales are limited, many are less than $5 million dollars a year. My general rules here get more specific and require number 1 to be true.
a. Sales $1 - $5 million value of a penny stock $.10 to $.20 a share
b. Sales Above $5 million - $10 million, value of a penny stock $.20 to $.30
c. Sales Above $10 million - $20 million, value of a penny stock $.30 to $.40
d. Sales above $20 million to $50 million value of a penny stock $.41 to $.95
e. Sales above $50 million, Value $.95 and up
This hub is located http://hubpages.com/hub/When-is-a-penny-stock-worth-more-than-a-penny-APNX-as-my-study .
To find out how accurate this review is, I screened stocks based on annual sales with the idea to compare APNX, what I believe is an undervalued stock to other companies with similar sales. From my screening I discovered the stocks listed in the table below Like the picture below the only way you will know if it is undervalued is to identify what is the difference. The screening below is the first test to identifying if a stock is undervalued.
Stock I am comparing is
APNX Current value $.11 Sales $20.12 million Profit 9.6%
Stock symbol Current Value Profit Annual sales
CPSH $2.24 7.8% 20.12 M
ATSX .05 -5.8% 20.10 M
JGPK .07 1% 20.36 M
BVII .93 10.4% 20.51 M
EGT .37 -91.2% 20.67 M
TCR 1.10 -27.7 % 20.73 M
SEYE .27 2.2% 20.83 M
CHCR .30 -64.4% 21.10 M
TRNT .10 -7.7% 21.10 M
XLRT .08 -25.1% 21.10 M
ARIS .75 3.3% 21.37 M
INBI .01 -113.5% 21.47 M
TBIO .90 -10.4% 21.47 M
IPMN .40 -78.4% 21.5 M
STTH .10 -4.7% 21.5 M
GAXL .48 12% 21.67 M
EFSI $16.30 21.98 M
IIM $12.96 21.9 M
GCOX $2.70 21.9 M
SOFO $14.90 21.9 M
NGPC $9.20 21.9 M
NEBS $10.00 21.8 M
PNGB $.008 21.82 M
BVSN $12.11 21.82 M
MPAD $6.65 21.78 M
TCCO $10.73 21.55 M
HUSA $16.12 21.36 M
PIP $ 3.31 21.27 M
From Yahoo finance screener, these stocks were from the US exchange closest in sales to the company APNX being analyzed. The question is Whats the difference between the companies whose price varies from a few pennies to several dollars. Based on this review, APNX looks to be undervalued. Further analysis should be done to help determine how accurate this statement is.
Each person has to determine for themselves why the stock is undervalued, just right or overvalued and is an opportunity for profits. What do you see when you look at the stocks. What differences are there and is this stock undervalued as I believe it is? HMMMM, what do you see?
