How To Get Information On Microcap Companies

Investing in Microcap stocks can be rewarding both financially and in time spent especially when using Microcap Millionaires advice. The key to making the most of your investment is research. And it need not be an exhaustive process. By delving deeper  into the background and future of a company you are looking to buy into, you can seriously hedge the odds in your favor. But there has traditionally been a problem with this.

Check The Facts On Microcap Companies

The main one is how the stock is traded. If the company floats its stock on The American Stock Exchange or the NASDAQ then it is a relatively straight forward task. Since all of the publicly traded companies are known well up to a point and most probably have a track record. It isn’t too hard to find the necessary information on these companies.

But what about those stocks held by companies that trade Over The Counter?

These , often those recommended by Microcap Millionaires, companies that don’t file financial information with the SEC can be hard to pin down. It has been known in the past for dubious parties to either inflate the value of these stocks artificially. Or in some circumstances even commit fraudulent activity to artificially sell stocks at a greater value than they are technically worth.

Your first port of call would of course be the Pink Sheets and OTCBB. Here you can check the companies basic information and the price they are asking for shares. If the company has more than $10 million in assets or 2000 investors, they they are required to file financial reports with the SEC. Although once again, “cooking the books” has been seen on a regular basis and is being stamped out across the board.

OTCBB

Once you have the information you require from the financial regulation bodies. Then you can do similar research on your own. In the information age, it is fairly straight forward to hire a researcher or a Virtual assistant. They can perform a series of searches online and compile together a hit list of basic factors that can help you make an informed decision about your potential investment.

Some things you should cover are:

Has the company been in the news? A simple Google News search of the company name or its trading name should flag up any positive/negative press. If the news is negative then why is it? Has the company shut down any of its operations?

What does a Google search say? Just a simple straight forward Google search can flag up anything from the companies head quarters being built. To an employee suing for an accident in the workplace. It can also provide you with location information. And you can check the companies headquarters on Google Maps. To see if the surroundings fit with the financial reports being filed with the SEC.

Research and due diligence is the key.

Where Do Microcap Stocks Trade

Microcap Stocks Graph

Trading stocks and shares has been a major source of wealth creation for hundreds of years. And whilst the methods have changed over the years, the idea of buying shares in growing companies has never changed. Microcap Stocks or Penny Stocks are stocks in companies that are worth between $50 million and $300 million. They are the hundreds of small companies that make up the breadth of the economy and employ thousands of people. These stocks tend to be more lucrative that those bought and sold in nano stock companies. And certainly easier to get started in than the larger corporations.  By trading penny stocks you are securing a foothold in the financial market for a relatively small amount of money. Not only are these companies comparatively low cost options to start trading stocks in, they are some of the most promising and vibrant companies around.

 

So if you are thinking of trading stocks using Microcap Millionaires and need to get started. Where would you find them?

 

OTC or Over The Counter Trading

The stock exchange was design primarily as a form of assurance, liquidity and overall safety when trading stocks. The benefit of this is a uniform way of trading and also transparency since the prices are being quoted openly for all to see. And the trade is being conducted publicly. Over The Counter stocks are a bilateral contract. Meaning that the stock price, quantity and quality is only divulged between the buyer and seller. With the obvious exception of the trader or banker negotiating the trade. Because there is no requirement for transparency. The two parties may agree on an unusual quantity or price. It is a private contract. The prices for these stocks are quoted directly in the Pink Sheets or the OTCBB.

 How OTC Trading Works

NASDAQ or AMEX (American Stock Exchange)

There are some major differences between the Over The counter trade and the exchange trade. For  stock to be entered into the exchange it has to have a certain uniformity. It has to be quantified and priced at a uniform rate to be able to pass through the exchange. Not only this, but the prices are shown publicly so absolute transparency is guaranteed. The stock exchange also creates a reasonable amount of liquidity and security. Should either of the parties trading default, then there are measures put in place to secure the trade. Unlike Over The Counter trading where should either party default, then the trade is over and money could be lost.

 

So as you can see there are a few different ways to trade penny stocks. The most important thing is to find a trader or facilitator to see the process through to fruition. When trading stocks using Microcap Millionaires you will want to execute trades quickly so do your homework to find the best solution for you.

 Microcap Stock Trading