Time to buy a penny stocks IPO?
To buy IPO stock is a much debated and controversial subject. The vast majority of investors have little or no knowledge of how to lock in an allocation. Many people think you can basically call any brokerage firm, full service or discount, place an order and then, get filled on their desired amount of shares.
These people don’t understand that their is an art to acquiring these IPO stock deals. It isn’t the same as placing and order on Cisco Systems (CSCO:NASDAQ) or buying penny stocks when the market opens. Investors don’t quite grasp that there is a limited supply of stocks. To put it in simpler terms, on some deals, it would compare to eleven people trying to buy one pizza.
Now, as scarce as that supply gets, the amount of brokerage firms involved dwindles it even further. Most IPO buys only have four to six underwriters. This means that if you don’t have an account at one of these firms, your chances of acquiring the deal are slim and none. Trying to get one a few days before the deal doesn’t work very well either. It only breeds disappointment.
The most common mistake that investors make while hunting IPO’s is to call their discount broker. Discount houses are involved in very few deals. It doesn’t matter how big your account is and it doesn’t matter how many trades you do. It’s a losing battle. So don’t waste your time.
The best way to buy an IPO stock game is to open an account at a firm that actually does deals. Just remember that major like Goldman Sachs, Barclays and Deutsche Bank are out of reach for most investors. They all require extremely high account minimums. In my opinion, the easiest route is to establish relationships at firms like Merril Lynch/BAC, Morgan Stanley or UBS. These three firms all have a huge retail presence.
Now here is the hard part to understand. Let’s say, for arguments sake, Morgan Stanley is the sole underwriter of a decent, but not super hot IPO. Even without a monster demand for the particular IPO, Morgan Stanley’s institutional side would still take a considerable piece of the deal. The institutional shares go to mutual funds, money managers, and hedge funds. All of these clients ring up monster commissions for the brokerage firm.
Now how should you play it ? Let’s use the firm XYZ for instance. They are a mid-size firm that does some quality investment banking. The easiest way to buy IPO stock from this firm or any other full service retail house is to find a broker who is a large producer. Like in any firm, in any sector, management will accommodate it’s top employees. Funding the account is another issue. Having 283k at a discount firm does not make you a big shot at any half decent full service firm. Here is where you have to sell the broker with one of three things. The first is assets. If you deposit seven figures in and show some activity, you will probably get some access to deals. The second way is a little easier. If you have smaller assets, try to ring up commissions for the brokers. And I am not talking about the $7 per trade type. If you have a good, honest broker and you pay him, he will pay you back. The last way is a little tougher. If you have a smaller account, but can refer multiple clients to the broker, you might be taken care of.
I hope this article helped clear up some of the myths of buying IPO stock. Investors seemed very upset after the General Motors IPO (GM:NYSE). They were blaming everyone from Bush to Obama because they didn’t get shares. In reality it was neither ones fault. Just remember that any successful businessman is going to take care of his top cllients or those who open doors to new clients. Put yourself in the broker’s shoes when you inquire about these deals. And if you can fill one of the three roles listed above, you may see some shares. Just be patient when you start.
This summer was an interesting one for crude prices. We didn’t see the usual summer price surge in gasoline prices that we often see during the vacation months. Think about it. Have you really heard anyone going crazy about gas prices recently ? Probably not, and you may not since many people have become accustomed to paying under $3 a gallon for gas.
Well, the market has a different agenda. Within the last year we have often seen a correlation between crude futures and the S&P 500. On Wednesday crude dipped below $75 on news that U.S supplies had risen. Gas inventories also rose. Both declines point to a lack of demand which raises questions about the future of the U.S economy.
The economics of the recent falling gas prices are simple. People are not driving as much. It could be from unemployment or the lack of taking a vacation. Both bode poorly for exchanges. From the NYSE to the OTCBB, energy related stocks seem to be stuck in a trading range. Many of you have heard this on the news or maybe even read about it in large cap or penny stock newsletters. penny stocks 10
Now here are two questions. Would you rather pay a few more cents at the pump and have you stock portfolio and 401K go up in value. Or, would you rather pay $2 a gallon for gas and have your portfolio decline. I know most would chose the first. This is why longs need cruse to stay above $80.
The good news is this negative sentiment can change on a dime. A world event, an economic report or simply some short covering in oil futures can move the commodity sharply higher within a few days. My sense is that we will see some rally back to $80.
Now how can we take advantage of a short term bottom in oil. On the large cap side you can play it safe you can buy Exxon Mobile (NYSE:XOM). If you want to be a little more aggressive take a peek at some of the drillers. But be careful. The drillers sometimes are almost as volatile penny stocks.
Now how does a penny stock traders and investors play this. My advice is to look at the AMEX for these drilling penny stocks. There are tons of microcap energy stocks trading on this exchange. Some of these former hot penny stocks have decent liquidity too. So do your research now and compile your penny stock list. Also, remember that if your wrong take your losses quickly. Preservation of capital is the key.
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Legend Oil and Gas Ltd (LOGL) Is Showing Very Smooth Rise
Legend Oil and Gas Ltd (OTC:LOGL) has been showing very smooth rise over the past one week with the stock jumped about 16% in the past five trading sessions driven by latest developments.
Late Monday, Legend Oil said that it has reached a non-binding letter of intent (LOI) agreement with international Sovereign Energy Corp.,w here it would buy all of ISR’s interests in land and production in Canada and valued the deal at $17 million , payable in cash. The property has potential to produce at least 300 barrels of oil equivalent per day, of which thirty percent contains crude oil.
Last week on July 06, 2011, LOGL updated its investor’s about its drilling activities in the first two wells of a three well program in Piqua, Kansas. The results were impressive and has potential to produce high quality of Oil.
LOGL also said that it will begin drilling activities on the third well in the coming few weeks and may do some additional drilling as well.
Shares of LOGL are now up 3.03% at day’s high of $2.38 with more than 309K shares traded hands, compared to its average volume of 156K shares.
LOGL is trading well above its 50-Day Moving Average and 200-Day Moving Average of $2.12 and $2.01 respectively. The company had total outstanding shares of 62.91 million, of which 38.89 million shares were floating. The company has a market capitalization of $149.72 million.
***************Original LOGL Post Below***************
Legend Oil and Gas – LOGL
4 cent penny stocks com/wordpress/wp-content/uploads/2011/05/logl-legend-oil.jpg” alt=”logl legend oil LOGL Legend Oil”>Oil & Gas penny stocks have always been pretty consistent favorites for day traders. There are hundreds of the out there on both the OTCBB and Pink Sheets. Mining Penny Stocks are a favorite for both longer term investors and day traders because they are often news driven. The right news announcement can send any given company skyrocketing in a matter of minutes.
Legend Oil & Gas (OTCBB:LOGL). LOGL is a junior minor who operates in the Bakken Shale Oil Field in North Dakota. This is the new hotspot for drilling in America. It is estimated that the Bakken holds between 3 and 5 billion barrels of recoverable oil. Geologists have known about the Bakken for a long time but it wasn’t even on the radar until oil prices pushed above $140. Then the Bakken became an economically feasible place to explore for oil as shale is extremely expensive to mine from.
The question is, does LOGL have quality properties in the Bakken and are the able to pull oil out of the ground at a cost affective price. There is no doubt that LOGL is in the right area of the world. Companies like Marathon, Hess, Chesapeake, Continental, EOG, Burlington and Whiting produced an astonishing 42.5 million barrels of oil from only 1,541 wells. At least 10 companies have doubled or even tripled since they started producing oil out of the Bakken.
I will be keeping an eye on Legend Oil and gas LOGL over the next few months. The company just started trading in March and we have seen it creep up slowly with some days having decent volume. LOGL could turn into a hot penny stock with the right news announcement but it is still unproven. I will keep watching for news on this one.
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While oil rose in today’s trading gold closed basically flat, after a five day run. Last week the dollar fell, and as we all know, has been weak for some time. Many have called the long gold/short dollar trade the most crowded trade in recent history. As a result, we have seen blue chip gold stocks like Newmont Mining (NEM:NYSE) double since 2009. Newmont has been one of the gold stocks to watch for sometime. Certain gold penny stocks have also provided huge returns, and silver penny stocks have also benefited greatly from the widespread interest in the yellow metal.
As many know, there are very smart people on both sides of the gold trade. Both sides are extremely passionate in their beliefs that gold will either drastically go up or down. One thing that seems evident, is that gold is no longer solely used as an inflationary hedge. Factors like QE3 will always influence the price of gold and will lift the rising tide of gold large caps, ETF’s and gold penny stocks. level 2 penny stocks However, much of the move we have seen in this precious metal can be attributed to the most basic economic principal. It’s called supply and demand.
Sheer buying interest and short covering is always a part of any prolonged rally. It happens every day, and the sharp moves in physical commodities are often as sharp as those seen in a rising gold penny stock. The percentage of gold related investments has risen dramatically in relationship to portfolios asset allocation ratio. Financial pundits talking of a return to the gold standard has even added more fuel to the fire. Does this signal a top ? I’m not sure. However, I do know that it probably won’t hurt to do some research on the names in the gold space. Just in case the gold bugs are correct. Forming a list of gold stocks to watch is certainly prudent. Especially with what’s going on in Japan, North Africa and the Middle East. If you decide to act hold some of the large cap names for the long haul and speculate with a smaller dollar amount in a few well thought out gold penny stocks.
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After a gold prices dropped from records high in the previous sessions, now gold prices in 2011 bounced back to a high again on Wednesday. This came about following the announcement by the Federal Reserve that the rates of interest would hang around zero for no less than two years and as fears over the euro zone and US debt tarried.
Gold Prices in 2011 at $1,778.29/ounce
This precious metal was at less than the unsurpassed optimum of $1,778.29 per ounce that it struck on Tuesday. The price remained high even as equities tried to recover from the weighty losses that they had incurred earlier on in the week. On early Wednesday, the price of an ounce of sport gold was up by 0.6%, going at $1,754.54.
This week, gold prices in 2011 had recovered by nearly six percent. Following the Friday relegation of the U.S credit rating, the simmering uncertainties over the economic outlook of the U. S and the euro zone debt have made battered assets seem as a high risk venture.
David Jollie, an analyst from Mitsui Precious Metals, said that it is quite hard not to be optimistic in an environment where a metal holds 3 or 4 reasons why its price will be higher. He went on to say that the move might seem a little bit overstretched but in a market where people are concerned about risk, gold had strongly gained from its status of refuge.
On Tuesday, the Fed pledged to keep the interest rates close to zero for another two years. It also stated that there would be considerations towards taking further steps that will help promote growth. penny stocks market watch These comments will affect gold prices 2011 negatively as well as positively. On the brighter side, this boosted equity taking the heat off gold as a substitute to the higher risk assets.
On Wednesday, the world shares pulled through despite the fact that European stocks recuperated from a low of two years. Although links between the dollar and gold has destabilized in the past few years, this news will greatly weigh on the dollar, making it a positive for gold.
On Tuesday, the Global ETF holdings fell by 7.2 tons (the first decline in thirteen sessions) as was computed by Reuters. On Tuesday, the NY SPDR Gold Trust (world’s largest gold-backed ETF) announced its major one day outflow since January 25 of slightly above thirteen tons.
The iShares Silver Trust also showed a large outflow earlier on this week. On Monday, the company’s holdings had dropped by almost 120 tops. This was the most the holdings had dropped in one day since mid of June. On Tuesday, the outflow was still unchanged. The ratio of silver to gold prices reached a record level in that particular session since February, as gold climbed when silver was embroiled in an extensive trading of commodities.
The highest level of the ratio of silver prices to gold prices was hit since early February in that sitting, as silver was involved in wider commodity selling as gold prices 2011 escalated. Currently, it is almost at 46, (from a hit of 31 in April) which is an up from the twenty-eight year low.
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Many of you witnessed the company Lithium Corp. (LEXG.OB) make a monster run in April only to be smashed by short sellers, profit takers, and so called momentum players. We pointed LEXG out as a penny stock to watch on it’s way up but also pointed out that it was primarily a trading vehicle.
Will after a miserable May and two pieces of fairly negative news (One about a filing/stock sale, and another piece from Seeking Alpha regarding paid mailers.) this week, shares of Lithium Corp are down roughly 20% at the time of this entry.
Does this mean the run is completely over or does this present a buying opportunity for a quick day or swing trade? We are not sure. However, there is some chatter on the internet that shares of Lithium Corp could bounce from here. Let me explain how this can happen. First of all, there are groups of penny stock day traders who look for situations like this and they are not looking at fundamentals. penny stocks how to trade Most know that Lithium Corp is not a value play based on earnings, revenues etc. These short term minded traders are hoping for one thing and one thing only. This is known as short covering. It would be naive to say that short selling hasn’t played at least a minor roll in Lithium Corp’s decline. Keep in mind that some of these short sale orders may have been placed on a naked basis and have to be covered in a shorter time frame than in a traditional short sale. Lithium Corp is very risky to play from here, but it should still be added to your penny stock list on a just in case basis and can be used as a learning opportunity for future trades.
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Tuesday was just another typical Venezuelan day for Hugo Chavez and it might be a positive event for certain gold mining stocks. Chavez is now nationalizing the gold mining sector and is also planning to repatriate gold held at the Bank of England
Now how does that affect gold mining stocks ? Well the answer is tricky. It’s common knowledge that penny stocks are news driven. Higher stock prices are not always a given just because a particular bulletin board gold mining stock might have a quality management team and proven reserves.
But this time could be different. Many of you still remember the dot com days. Back then it wasn’t unusual for some obscure, illiquid internet penny stock to triple in a week based on a NASDAQ rally or positive news coming out of a Yahoo (YHOO:NASDAQ) or Amazon (AMZN:NASDAQ). Parabolic moves in speculative names caused informed skeptics to call for an internet bubble. penny stocks trading Now while, the timing may have been off, the bubble theory proved to be right.
Could Gold Mining Stocks Take a Hit
Right now, their are several gold bears who feel the short dollar/long gold trade is too crowded. There are others who feel there are too many retail investors flocking to the precious metal at all time highs. These two factors usually signal a top, but as the saying goes, “The market can remain irrational longer than you can remain solvent”. And as we know shorting gold recently has been a recipe for margin calls and disaster.
Now gold prices declined on Tuesday and have traded opposite the broader markets during this decline. However, gold often moves on political instability, and we all know that Chavez can provide this element.
In addition to nationalizing the gold industry, Chavez is planning to repatriate 211.35 tons of gold. Now while it’s legal, this move is far more controversial and newsworthy than your typical Chavez land seizure, and if other left leaning countries do the same, the gold bugs could get aggressive again and cause another short squeeze that only drastic changes in margin requirements could slow down. A squeeze would obviously impact gold futures, but massive percentage gains might be found in gold mining stocks as well, and a legitimate bubble could be created at much higher prices.
Now we are currently researching some different gold mining stocks, and if the Chavez move causes an international event, you can count on us for color and ideas.
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There is little doubt that lithium could be the “mineral of the future.” The demand for lithium is already high because of its use in cell phone batteries, laptops and most importantly car batteries for hybrids.
So how will this effect lithium penny stocks?
It is projected by the National Highway Traffic Safety Administration that hybrid cars will be 20% of the U.S. auto market by 2015 (keep in mind this is just the U.S.).
Deutsche Bank estimates that the lithium-ion battery market will hit $15 billion this year and $40 billion in the upcoming years. This is all due to a surge in electric cars.
A123 Systems plans to spend $2.4 billion to build factories to make enough lithium-ion batteries for approximately five million hybrid vehicles by 2013.
LG Chemicalwill build 10,000 400 pound lithium-ion battery packs for the Chevy Volt in the first 12 months of production. The plant will eventually bang out 60,000 annually. penny stocks good
These are just a few car stories. Mercedes, Nissan, Chrysler, BMW, Ford, Jeep and Chinese auto giant Hafei are all pumping out hybrids. In total over 75 new hybrid makes will be available in the next year.
The demand for lithium is surging!!
“Going Green” seems to be trendy now. Not only that, but people are getting turned off by high oil prices… especially in the summer driving season. Economically hybrid cars are a no brainer.
Lithium made the news in a big way last month when there was a huge discovery by U.S. geologists in Afghanistan that could equal about $3 Trillion worth of what is being called the “new oil.”
The gas engine made petroleum the most in-demand commodity in the world. Although it is going to be tough, the electric car definitely has the potential to do the same for Lithium.
Demand for Lithium is expected to grow 16 times with this surge in electric cars. World Governments are investing billions into lithium production.
There are a few companies that are going to benefit from this boom. We have profiled a few lithium penny stocks before and have seen decent gains. Penny stocks are predominantly news driven. Any one of these small cap companies has the potential to sign a huge contract that could potentially increase revenues by millions. That could turn any junior miner into a force over night.
We are definitely going to see some speculative money going into small cap lithium companies. We have seen penny stocks surge on huge contract signings.
Definitely keep lithium on your radar and watch for small cap companies that could benefit.
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Traders who were long the Ag space woke up Tuesday morning to a pleasant surprise. Potash Corp. (NYSE:POT) rejected a bid that was slightly less than $39billion from BHP Billiton (NYSE:BHP). Potash has traded over $145 in the pre-market, which is significantly higher than the $130 bid from BHP. It seems that Wall St. agrees with Potash’s opinion that the bid was far too low.
Other Ag stocks like Monsanto (NYSE:MON), Intrepid Potash (NYSE:IPI) and The Mosiac Company (NYSE:MOS) are also trading up sharply in the pre-market in anticipation of coming takeover speculation in the group.
Ag stocks can be very volatile, much like penny stocks. They are also one of the few large cap groups that can provide the same type of high percentage gains that a rising microcap stock can. However, even though stocks like Potash have substantial earnings and revenues, they are generally traded by aggressive investors.
Today you will surely hear takeover rumors in other Ag space names on television and read them on the internet. penny stocks robinhood 2017 You will surely be told about Cargill’s majority stake in Mosiac. Others will say play it safe and buy Market Vectors Agribusiness ETF (NYSE:MOO). Our advice is to be careful and not jump in right at the open. In other previous blogs we highlighted not buying gap ups on or near the open. Mainly because most times those gaps see some sort of retracement.
You may also see some limited impact on the OTCBB because of the massive Potash story and the sympathy in the group. Penny stock newsletters will surely write some reports on some Ag related hot penny stock.
Once again make sure you do some homework. While Ag valuations should be reset to the upside, it doesn’t necessarily mean that these premiums will apply to the stock that you own. Remember, good ideas on the long side happen on a daily basis. So if you miss one, it isn’t the end of the world. So for now I would form a penny stock list and a large cap list of potential Ag stock candidates. And that list should be researched and reviewed thoroughly before acting.
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Biotech company Genzyme (NASDAQ:GENZ) was the subject of takeover rumors. CNBC’s David Faber broke the story on a possible hostile takeover bid from Sanofi-Aventis (SNY-NYSE). Shares of Genzyme rallied sharply and are up roughly 17% at the time of this entry.
As many of you know, the vast majority of takeover rumors don’t happen. However these rumors offer both traders and investors the opportunity to make fast, short term profits on both the long and short side. Sometimes the best way to play hot stocks like GENZ is through an ETF. For instance,there is a biotech ETF run by Merril Lynch (AMEX:BBH). Shares of BBH represent ownership in several different biotech companies, including GENZ. Genzyme accounts for roughly 7% of BBH’s holdings.
When a stock like GENZ gets hot, volatility increases too. While shares of takeover stocks often offer more liquidity than penny stocks, they are just as risky. penny stocks trading app If an investor is right, he can attain returns that are only usually seen in hot IPO’s or hot penny stocks. If wrong, 20-30% intraday pullbacks happen frequently. In other words, the wishy-washy trader is usually shaken out.
This is why ETF’s are attractive, and keep in mind this doesn’t only apply to BBH. Buying shares of an ETF in lieu of buying a takeover stock offers less upside, but it also offers a less risky way to trade. The rationale is very simple. Many investors are afraid to jump is a stock that has moved up in a short period of time. Even if they think the equity will continue to move higher. So many times, the investor just passes on the idea and kicks them self later for being on the sideline. Now, by buying the ETF that contains the same equity, they still get to participate. Not fully, but they are represented. This strategy isn’t for everyone, but it decreases risk and small gains add up. So get familiar with a few different ETF’S and their symbols. Remember, when stocks that are in an ETF moves, the ETF sometimes lags behind. The rules of supply and demand still apply, but you have to be quick and prepared. SO add in addition to your large cap and penny stock lists, throw a few ETF’s on your stocks watchlist too.