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6 Penny Stocks To Watch

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Penny stocks are equity investments that are traded outside major stock exchanges. These stocks are traded at low prices and have a small market cap. As penny stocks are illiquid and highly speculative, they carry a high risk of investment.

The US Securities and Exchange Commission (SEC) defines penny stocks as shares with a value of less than $5. Typically, a penny stock is traded over the counter or by using pink sheets.

Despite the high risks of investment, penny stocks can be a lucrative form of investment because of its low price and higher prospects of return.

Here we look at 5 penny stocks that are very promising.

1. Neptune Technologies & Bioresources Inc [NEPT]

Neptune Technologies and Bioresources Inc is a Canada based wellness solutions provider. It offers nutraceutical products or standardized nutrients of a pharmaceutical grade.

MaxSimil is a patented ingredient and one of the premium products offered by Neptune. Other products include marine oils, seed oils, as well as oil extracted from legal cannabis.

Neptune also offers pet nutritional products.

In 2016, Neptune acquired Biodroga, a privately owned business solution provider for functional ingredients. Since April 2017, Neptune has become a licensed producer of Cannabis and Hemp Oil in Canada.

The monstrous growth in cannabis will hold NEPT in good stead. Analysts expect sales to rise 37% year-over-year to $39M in 2019.

Market Cap: $316M

Year-to-Date Return: 70%

Earnings Growth: 66.7%

2. Glu Mobile Inc. [GLUU]

Gaming has become one of the popular modes of entertainment. Glu Mobile is a game development company targeting mobile phones and smart gadgets.

The brand has already come up with multiple action games as well as mobile versions of console and arcade games. One of the popular role-playing games “Kim Kardashian: Hollywood” released by this company features the life of a reality TV celebrity. Glu Mobile Inc. primarily targets the female audience and over 60% of its games are female-centric.

What’s more, most of the games developed and launched by this company are free and can be downloaded from the Google Play Store [GOOG] or the iOS App Store [AAPL].

The primary source of revenue is from the in-app purchases.

Glu Mobile has benefited immensely from the exponential growth of mobile gaming. With the global gaming industry set to experience robust sales over the next few years, Glu Mobile might be on the radar of several investors and analysts.

Analysts expect the company’s revenue to rise by 18% this year and 12.3% in 2019.

Market Cap: $1B

Year-to-Date Return: 103%

Earnings Growth: 40%

3. Arotech Corporation [ARTX]

Arotech Corporation is a successful mixture of modern technological innovations for federal use. There are two primary divisions of Arotech. One is the Training & Simulation department while the second focuses on Power Systems.

The Training and Simulation Department clubs drone technology and virtual reality for military use and law enforcement. Many of the simulations are used for combat training. Additionally, it also offers security services and weapons simulations for aircraft and missile guidance systems.

FAAC is one of the subsidiaries of Arotech Corporation. It was awarded a contract by the US Marine Corps. FAAC will be responsible for updating the convoy systems and the contract is valued at around USD 29 million.

Headquartered in Ann Arbor, Michigan, this defense and security company has been in existence for more than two and a half decades. Analysts expect revenue to rise by 1.3% to $100M this year and 11.8% to $111.8M in 2019.

Market Cap: $90M

Year-to-Date Return: -3%

Earnings Growth: 127%

4. CAS Medical Systems [CASM]

Medical and Healthcare sectors are seamlessly adopting modern technologies. CAS produces as well as markets products that can be used to monitor a patient’s vitals. Its products can be used to track patients without the use of invasive methods.

MAXNIBP is its traditional product to measure blood pressure. The company also offers a product called FORE-SIGHT which is a Tissue Oximeter with sensors.

Analysts expect CAS’ revenue to rise by 6.8% to $20M this year.

Market Cap: $63.3M

Year-to-Date Return: 196%

Earnings Growth: 15%

5. Dolphin Entertainment [DLPN]

Here’s another content production company — Dolphin Entertainment, Inc. engages in marketing and providing publicity services to major film studios, and many of the independent and digital content providers.

It is, however, flying under investors’ radar as the limelight is focused on content giants such as Netflix [NFLX], Disney [DIS]  and others. It recently acquired 42West that expands its revenue stream into the public relations space.

Analysts expect Dolphin’s revenue to rise by 4.9% to $23.5 million this year, and 19.4% to $28 million in 2019.

Market Cap: $35.36M

Year-to-Date Return: -30%

Earnings Growth: 82.4%

6. Fura Gems [FURA]

Fura Gems is primarily a natural resource company. It engages in the acquisition and exploration of resource properties. The company was founded in 2006 and headquartered in Toronto, Canada.

This penny stock is currently trading at $0.40. The gemstone mining and marketing company is eyeing a share of 8-10% in the global colored stone market over the next three years. The market is estimated to reach$2B in 2021 which translates into annual revenue between $160M and $200M for Fura Gems.

Fura Gems is looking to expand its footprint in Mozambique and recently acquired nine ruby assets in the country.

Market Cap: $48.4M

Year-to-Date Return: -28%

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Early Uber Investor: ‘I’m Happy With Uber’s Poor IPO’

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Lance Armstrong may not have gotten his $3B on his $100K investment, but his $100K still got a proper HGH/steroid boost.

And despite the rough outing, early investor Mitchell Green says he’s happy with the current IPO price—despite falling WAY south of its initially rumored $120B level.

And no, it’s not the Mitch Green, the one who got into a street fight with Mike Tyson.

Image result for mitch green gif

Uber rich Mitch Green looks like this:

Image result for mitchell green lead edge

Anyway. Green says he’s happy with the current pricing. Check out the video to see why.

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Money

‘Going Public’: IPO, Explained

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It’s a buzzword we hear constantly—and one that’s sure to generate tons of headlines. Alibaba had the largest in history (before its billionaire founder decided he wanted to quit to be a grade school teacher.)

Lyft IPO’d recently also, beating arch rival Uber to the proverbial punch.

Other than being a buzzword and a big story, what exactly is an IPO?! Well, let’s break it down.

What is an IPO?!

In technical terms, an Initial Public Offering (IPO) is the first sale of stock issued by a company to the public. In other words, this is the moment when a private company goes “public” by offering its shares for sale to the public.

So when a company does go public, the valuation usually spikes dramatically—and the company can now use the funds from the sale of shares to feed the business. It’s a fabulous funding source for a company.

Before that, what is a company?

Prior to going public, a company is a privately-owned firm. Obviously. The company initially attracts investments or seed capital from the co-founder, friends, and families.

Business investors such as venture capitalists, private equity companies and angel investors pump in money if they are optimistic about long-term prospects and sustainability of the company.

On the flip side of things, you sometimes have companies that decide to go “private,” like Elon Musk said he wanted to do with Tesla. 

Why does a company opt for an IPO?

The biggest advantage for a publicly listed company is access to capital. This capital can be used to purchase machinery, fund research and development or pay off any existing debt.

The firm will then be listed on a public exchange and provides an exit route for business investors and founders.

When Facebook went public, Mark Zuckerberg sold 30M shares worth $1.1B. An IPO is the most common way for investors and VCs to make a significant return on their investment. In fact, it’s considered the ultimate exit for founders.

How much capital do the companies get?

Let’s run down the list.

Alibaba [BABA] raised $25B in an IPO back in Sept. 2014. Facebook [FB] raised $16B in May 2012. Visa [V] raised $7.9B in March 2008.

Top tech unicorns such as Uber, Slack, and Airbnb are on course to file for an IPO over the next 18 months.

The company that is looking to go public hires an investment bank to underwriting the IPO process. Investment banks can either work together or individually in this process.

What do the investment bankers do?

In other words, all the boring admin stuff. In exchange for this, they collect a nice fat fee, usually anywhere from 4-7% of gross proceeds.

Those involved hold several meetings to finalize the IPO process and determine the timing of the filing. Once this is wrapped up, they shift to performing the due diligence to ensure the company’s registration statements are accurate.

The due diligence tasks include market due diligence, legal and IP due diligence, financial and tax due diligence. At the end of this process, the companies then file for an S-1 Registration Statement.

The S-1 is usually what tips off the press and the public that a company is about to go, well, public.

And what’s the S-1?

The S-1 statement includes information about the companies’ historical financial statements, company overview, risk factors, and other critical data.

A pre-IPO analyst meeting is then held post the S-1 Registration Statement to educate analysts and bankers about the company.

Confused yet?

A preliminary prospectus can also be drafted at this stage. The underwriting investment bank conducts pre-marketing to determine the interest of institutional investors and the price they are willing to pay per share.

Now you’re ready to go public

The price range for an IPO is set and the S-1 Registration Statement is amended with the price range.  The company’s management organizes road shows and marketing activities to generate interest for the upcoming IPO.

Based on investor interest, the price range per share can be revised. The investors will apply for company shares and this application window is open for generally 2-4 days. The company shares can be oversubscribed or undersubscribed.

Once the IPO is priced, the investment banks will allocate shares to investors where the stock will now be available for trading in the secondary market.

At this point, a company is now ready to go public. Here’s how people usually look when that happens.

Image result for snap IPO

SNAP executives during happier days.

Congrats. You’re now an IPO expert.

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Money

[VIDEO] Penny Stocks, Explained

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Penny stocks are equity investments that are traded outside major exchanges. These stocks are traded at low prices and have a small market cap. As penny stocks are illiquid and highly speculative, they carry a high risk of investment.

The US Securities and Exchange Commission (or SEC) defines penny stocks as shares with a value of less than $5. Typically, a penny stock is traded over the counter or by using pink sheets.

Despite the high risks of investment, penny stocks can be a lucrative form of investment because of its low price and higher prospects of return.

Suitable for investors with a high-risk tolerance

Investing in equity markets is risky, particularly because it’s driven by price fluctuations and volatility. Investors in penny stocks will generally have a higher threshold of risk tolerance. Penny stocks are far more volatile than blue-chip stocks.

Investors hence need to take precautions while investing in penny stocks. They need to have a stop-loss order prior to entering into a trade. This will minimize the amount of downside potential in case the markets move in the opposite direction.

Penny stocks also provide an opportunity for significant companies. These companies are generally high-growth ones but with limited cash resources.

Why are penny stocks attractive to the average retail investor?

Generally, the average retail investor associates a low price stock as a bargain. But this cannot be farther from the truth. A stock can be overvalued at $1 and can be undervalued at $250.

The average investor fails to understand this due to limited investing knowledge. Penny stocks are trading at lower values for a reason. They might experience a bull run resulting in a significant price appreciation but can also come crashing down in no time. It is far easier to manipulate penny stocks.

The “Caveat Emptor” principle should be applied when investing in penny stocks. Sure, there are success stories even for penny stock investors, but is worth the risk?

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