|Moderated By: Ted M -- (Moderated) -- Started: 6/6/2008 11:28:03 AM Revision History|
Hi. Welcome to the Microcap Potential Homeruns--Credible and Reporting site.
This site is for discovering legitimate microcap companies whose stocks could be "homeruns" anytime over the next 6-12 months, and if not then--over the next few years. By "homerun" we mean multiple-bagger, not just a 20-30% move. Usually this will be a company that is or likely will be addressing a significant market need, although sometimes it may be one that has a steady business but is just ridiculously underpriced. At the same time, we don't want a bunch of a hundred-to-one shots, or short term momo plays based only on charts and floats. We want stocks that have a good risk/reward ratio for legitimate business reasons, so in case it doesn't take off in the time period we expect, we will still be in a winner for the longer term! To encourage these goals and boost our return/risk ratio the following criteria should be met:
1. Must be fully reporting with the SEC. No pink sheets or companies just on foreign exchanges.
2. Must have a real product or technology. Credibility is critical. No shells or scams.
3. Cannot have significant floorless or other toxic financing. Watch that dilution!
4. A reasonable pathway to profitability within a year or two. Pay attention to overall debt, market potential, gross margin potential, and operating cash flow.
5. Market cap under $50 million. This limit is substantially lower than on the Kitchen, which can go up to $500 million.
6. Avoid generic sector plays without demonstrable revenue growth.
7. Avoid stocks highly dependant on factors outside of their control or a long ways off from commercialization--ie early phase biotechs, mining and exploration companies, unless they have REAL evidence which makes you expect results fairly soon.
We will start with these criteria and see how it goes. Subject to your input, the criteria may be modified in the future. Note that there are no restrictions on price or outstanding shares. Both can be true warning signs but they point to PAST financial health, not necessarily FUTURE. More important is the current financial health, future earnings potential, and current market capitilization.
When you first introduce a stock, please be sure to indicate the name, ticker, a current bid-ask, and the shares outstanding (found in 10Q or 10K at sec.gov--a free site).
Tell us why you like the stock, and remember that we are all trying to make money. Give your reasons you think the company is credible. State your concerns too! We believe that there are legitimate bargains to be found. This is the place. As such, this need not be a "pump only" site. We want to be CONFIDENT in the picks here by encouraging well-rounded analysis.
Let's keep it respectful and on topic. Any violators, spammers or bashers will be not be tolerated here. For those that share our purpose, let's make this a true democracy--spread the posting around and let's let EVERYONE feel welcome to contribute or simply ask questions. We all can learn more from each other's experiences.
Remember of course that NO INSIDER information is to be presented here. If you aren't sure--don't post it! Information should be based on legitimate due diligence anyone can do.
Posts made here should be considered opinions, and not investment advice. Posts will contain mistakes as well as mistakes in judgement. Posts should be considered as suggestions for individuals to do their own research and no more. Your decision to buy or sell is your decision and yours alone.
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