Trading Penny Stocks – The Three M’s of investing: Management, Market and Manufacturing
The three most important tips for trading penny stocks are M, M and M: management, market and manufacturing. According to Franchise Holdings International, there are very good situations in this market. Sophisticated investors owe it to themselves to consider these companies.
Even sophisticated investors often don’t understand the opportunities for growth inherent in ‘trading penny stocks’ when searching for companies to invest in. They almost back away. They think there couldn’t be anything of value in microcap issues. But those who look down on these stocks often miss special situations. They can have every bit as much promise as much bigger and more established companies. What’s missing of course is a way to look at these stocks. There is a way to find the most promising ones. Companies that were successful later sometimes spent time with share prices under a dollar. A prominent example is Dollar Thrifty Automotive. It once traded at 60 cents. Yet Hertz’s acquired it (NYSE:HTZ), with major returns to investors.
Here are three tips to consider. They are based on Franchise Holdings International’s own experience (OTCQB:FNHI) now that we have been elevated to this exchange.
#1. Management is the first point to consider in trading penny stocks
Companies are a reflection of their management. Ask yourself: is management visible and what is it like? Does it have its heart and soul in the company? Is it up front and transparent? For example, our CEO, Steven Rossi recently retired 100,000,000 of his own shares. This was approximately 45 per cent of shares outstanding. It added greatly to shareholder value. You don’t see this too often. Mr. Rossi, too, (@thehonest_ceo) is very visible on social media. He is open to answer questions about trading penny stocks day and night. In fact, he is holding a Second investment conference call in Q2 . He is dedicated to full financial disclosure.
#2 The company’s Market is its opportunity
What market is the company in? How big is it? Do others succeed it? Are there barriers to entry or is there still a market opportunity? Will the company become one of the fastest growing companies? Worksport, our subsidiary, for example, is in the light truck market. It provides tonneau covers for the millions of these vehicles. In North America 2,500 covers are sold every day. This translates into $638 million a year in annual sales. The market potential is $2.2 billion per year! It’s that kind of acid test that one must apply to every company. What is the market and how big is it? And does any one company dominate it? If the market is small or a little niche, beware. Maybe that company won’t be a candidate for trading penny stocks.
#3 When trading penny stocks, ask questions about manufacturing and technology
Does the company have a vision for its production? Does it focus on an up-and-coming technology? Solar power, for example, is changing – and improving – rapidly.
The Helios tonneau cover, made by FNHI’s wholly owned subsidiary, Worksport LTD for example, is in the prototyping stage. It converts sunlight into storable energy. It can be used to power electrical tools. It also extends a hybrid or fully electric light duty truck’s driving range. This product could be a true game changer in the truck accessory market.
Trading penny stocks can be high risk for individual investors. Or they can contain extraordinary individual rewards. Our overall goal is to be the company investors talk about. When they boast about their best ever investments, we want it to be OTCQB:FNHI.
This document may contain forward-looking statements, relating to Franchise Holdings International Inc. operations or to the environment in which it operates, which are based on Franchise Holdings International Inc. operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and/or are beyond Franchise Holdings Internationals Inc.’s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. Franchise Holdings International Inc. disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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