I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
—
FURTHER READING ON PENNY STOCKS
1. Bruce McWilliams. Penny Stocks: How the Small Investor Can Make Large Profits in the Penny Market. Warner Books, 1982.*
2. Ira Cobleigh, and Peter DeAngelis, CFA. The $2 Window on Wall Street: How to Win Big in Low-Priced Stocks. Macmillan, 1986.**
3. Robert Frick. Keys to Risks and Rewards of Penny Stocks. Barron’s Educational Series, 1990.
4. F. Philip Rice. Getting Rich with Low-Priced Stocks. Prentice-Hall, 1984.
5. Hilary Kramer. The Little Book of Big Profits from Small Stocks. Wiley, 2011.
6. Peter Leeds. Penny Stocks for Dummies. 3rd ed. Wiley, 2021.
—
* My wife saw a white angel sparkle on this book while I was explaining something to her.
** I saw a white angel sparkle beside this book title as I was building this book list.
—
I only have 50 stocks so far, but my objective is to grow my Schwab “StreetSmart Edge” Watchlist to 100, and then to 500, and then finally to 1000 (cp. the NASDAQ 100, the S&P 500, and the Russell 1000). The idea is, the more stocks I can monitor in real time, over say a 5 day period, the more I can track 5-day gainers (green % Change stocks). These are like “needle in the haystack” stocks to me that I can use to multiply money in a 5 day period.
I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
The fool says in his heart, “There is no God.” –Psalm 14:1
COME NEAR AND AGREE: ASSEMBLIES OF GOD IS ANTI-EVOLUTION (CONSERVATIVE EVANGELICAL PENTECOSTALS)
Both Adam and Eve, male and female, are declared to be made in the “image” and “likeness” of God. These carefully delineated creative acts indicate that humans are distinct from animals. God did not form Adam from some previously existing creature (1 Corinthians 15:39). Any evolutionary theory, including theistic evolution/evolutionary creationism, that claims all forms of life arose from a common ancestry is thereby ruled out. –ag.org, The Doctrine of Creation
AVOID AND RESIST: UNITED METHODISTS ARE PRO-EVOLUTION (MAINLINE LIBERAL WESLEYANS)
We recognize science as a legitimate interpretation of God’s natural world. We affirm the validity of the claims of science in describing the natural world and in determining what is scientific. We preclude science from making authoritative claims about theological issues and theology from making authoritative claims about scientific issues. We find that science’s descriptions of cosmological, geological, and biological evolution are not in conflict with theology. –The United Methodist Church, Book of Discipline
—
BOOKS I RECOMMEND
1. James Ussher’s Annals of the World – Puritan bishop writes a 6,000 year world history.
2. Adams Chronological Chart – 6,000 year world history timeline based on Ussher.
3. Norman Geisler’s When Critics Ask – best anti-Bible-contradictions book I’ve seen.
4. Augustin Poulain’s The Graces of Interior Prayer – Catholic supernaturalism.
5. Jonathan Wells’ Icons of Evolution – best anti-evolution book I’ve seen.
Observing the factors, or common denominators of successful penny stocks, or properly microcap stocks, if plugged into Finviz, could probably increase your chances of hitting one some day. The Finviz Elite custom screener can help you to narrow down the penny stock list and increase your odds of smacking a big gainer some day.
UNCOVERING THE MYSTERY OF PENNY STOCK FACTORS…
It seems to me, at least at this point, that the most useful penny stock screen, which could only be done by Finviz Elite, would be something like this. Although this is hard to confirm without Finviz Elite just yet:
1. VOLATILITY: MONTH – OVER 9% (TOP 25 ANNUAL TOP GAINERS RETAINED WITH 779 STOCKS LEFT IN THE PENNY STOCK LIST).
2. AVG. VOLUME: UNDER 31 MILLION – THIS WOULD LIKELY RETAIN THE TOP 25 GAINERS WHILE WINNOWING THE LIST DOWN TO SOMETHING MUCH SMALLER, THUS INCREASING THE ODDS OF A HIT).
3. RELATIVE VOLUME: UNDER 24 – THIS WOULD RETAIN THE TOP 25 GAINERS AND MAKE THE STOCK LIST EVEN SMALLER.
4. PRICE: UNDER $30 – THIS WOULD HAVE TO BE THE FINAL FACTOR. NO MORE NARROWING COULD BE POSSIBLE. NOT MARKET CAP OR ANYTHING ELSE WOULD BE ALLOWABLE. NOT BY EXCHANGE: ALTHOUGH 95% OF THE WINNING PENNY STOCKS WOULD BE ON NASDAQ. NOT EVEN SALES GROWTH. REMEMBER: THESE ARE NOT “GROWTH” STOCKS. THEY ARE UNPREDICTABLE PENNY STOCKS THAT CAN HAVE ONE-TIME GAIN EXPLOSIONS IN A SINGLE DAY. THE TRICK SEEMS TO BE, TO OWN AS MANY AS YOU NEED, IN ORDER TO ROTATE THEM, WITHOUT HAVING TO BUY AN EXCESSIVE AMOUNT OF PENNY STOCKS. THE VOLATILITY, VOLUME, AND PRICE RANGE FACTORS SEEM TO BE THE BIGGEST DEAL.
If these four factors were applied in the ALL tab on Finviz Elite, then I’d have to say the penny stock list might be in the 200s. If you bought all of them, then that would be pretty good odds of striking it rich with one of them over the course of the next year. But you need to monitor their real-time price changes every day in Schwab, Finviz Elite, or the TipRanks Smart Portfolio.
THEN AGAIN, THERE’S ALWAYS THE DRAMATIC GAINER PINK SHEET PENNY STOCKS ON “OTC MARKETS“. BUT I DEFINITELY WOULDN’T PUT A LOT OF MONEY INTO ANY OF THESE; AND CERTAINLY NOT UNLESS THE TIPRANKS SMART PORTFOLIO INDICATED A DRAMATICALLY GAINING PRICE CHANGE
UPDATE: 3/2/23 –
Investopedia says, “Despite the inherent risks, the opportunity to turn a small investment into a potential fortune continues to attract traders to the OTC market.” This is what happens when you try to plug today’s top 100 advancers from OTC Markets and today’s top 100 price change gainers from Finviz into the TipRanks Smart Portfolio: Today I went on the OTC Markets website just out of curiosity. I populated the top 100 penny stocks on the Current Market: Advancers page. I tried to plug all of them into my TipRanks Smart Portfolio for monitoring, but it only accepted some of them. But even so, this approach has got me excited about making some gains by this method. As Wesley said, “Gain all you can”:
I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
—
This historical sketch is taken from The Penny Stock Reform Act of 1990, pp. 9-10.
—
BOOKS ON 3-YEAR GROWTH STOCKS
1. T. Rowe Price’s Picking Growth Stocks (Barron’s, 1939)
2. Philip Fisher’s Common Stocks and Uncommon Profits (Harper & Brothers, 1958)
3. Peter Lynch’s One Up on Wall Street (Simon & Schuster, 1989)
2. Robert Frick and Mary Vellenga’s Keys to Risks and Rewards of Penny Stocks (Barron’s, 1990)
3. Peter Leeds’ Penny Stocks for Dummies, 2nd ed (Wiley, 2016)
UPDATE: 2/22/23
MORNINGSTAR HAS BEATEN VALUE LINE AS THE LEADING STOCK RESEARCH COMPANY
Not only as a stock, but likely also as a stock screening service. Public libraries, Glassdoor, Wikipedia, and just frustrated Value Line customers like myself can tell you that Value Line is no longer the line to pursue value in. Its Morningstar. Its been this way since 2009, ever since Value Line’s SEC fraud scandal…
—Investing for Dummies, p. 378
—Value Investing for Dummies, pp. 94-5
—
UPDATE: 2/24/23 – Penny stocks are defined as all stocks under $5.oo and sometimes as stocks under $1.00. I think these barchart.com lists might be a good way to screen for strong performing penny stocks:
I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
—
FINVIZ SCREEN: BENJAMIN GRAHAM’S RULES APPLIED AS MUCH AS POSSIBLE
FINVIZ SCREEN: PHILIP FISHER’S RULES APPLIED AS MUCH AS POSSIBLE
FINVIZ SCREEN: PETER LYNCH’S RULES APPLIED AS MUCH AS POSSIBLE
BENJAMIN GRAHAM SCREEN: STOCK COMPARISONS WITH S&P GLOBAL (SPGI)
PHILIP FISHER SCREEN: STOCK COMPARISONS WITH S&P GLOBAL (SPGI)
PETER LYNCH SCREEN: STOCK COMPARISONS WITH S&P GLOBAL (SPGI)
GRAHAM-FISHER-LYNCH TOP PICKS: STOCK COMPARISONS WITH S&P GLOBAL (SPGI)
1. Euroseas (ESEA)
2. ArcBest (ARCB)
3. Encore Wire (WIRE)
4. Bit Digital (BTBT)
Since the above is supposed to be a successful screen for 5-year growth stocks according to my application of Benjamin Graham, Philip Fisher, and Peter Lynch to Finviz as much as I could. (No income statements or balance sheets were involved this time,) I’ve decided to show the 5-year Google charts for each of them:
In review, I have to view ArcBest Corp (ARCB) and Encore Wire Corp (WIRE) as the winners of the 5-year growth stock comparison. Seeing that they are currently priced at $102.18 and $199.61 and were 5-year twobaggers, I’m now forced to go back to what Michele Cagan’s Investing 101 said about growth stocks:
Growth stocks, as you can probably guess from the name, include companies that have strong growth potential. Many companies in this category have sales, earnings, and market share that are growing faster than the overall economy. Such stocks usually represent companies that are big on research and development; for example, pioneers in new technologies are often growth-stock companies. Earnings in these companies are usually put right back into the business, rather than paid out to shareholders as dividends. Growth stocks may be riskier than their blue-chip counterparts, but in many cases you may also reap greater rewards.
Cagan then quotes T. Rowe Price saying that investors should be buying growth stocks and “retaining them until it becomes obvious that they no longer meet the definition of a growth stock” (pp. 43-44).
Larry Burkett’s Investing for the Future echoed the words of Fisher and Cagan when he said:
Growth stocks are usually associated with newer companies, or emerging technologies. IBM was considered a growth stock in the early fifties. Xerox was a growth company in the sixties. Texas Instruments was a growth company in the seventies. Apple Computers became a growth company in the eighties…This does not mean that once a company has been a “growth company” that the stock does not appreciate. IBM is a good example of a company that has seen a steady growth pattern for more than three decades. But compared to the company’s early days it would now be considered a stable income company (pp. 201-202).
Fisher, Cagan, Burkett, and T. Rowe Price are all agreed about these aspects of a growth stock:
1. The sales and earnings (EPS) growth is faster than the S&P Global 500 (SPGI, 12% annual sales growth on the MarketWatch: Financials: Income Statement).
2. There’s a big budget for research and development in the income statement.
3. It’s pioneering a new technology: usually with electrical engineering and manufacturing.
4. The first few years after the company’s IPO date have the most profitable growth spurts, but old stocks will stagnate in their growth eventually.
Don Underwood’s Grow Rich Slowly: The Merrill Lynch Guide to Retirement Planning also has this to say about the aggressive growth stock trader:
You want to move a bit faster. Not only are you trying to outperform the market, over a two-to-three-year period (DJIA, S&P 500), but you are willing to move among asset classes–stocks, bonds, cash–on a regular basis in order to do it. Again, because you are looking for growth, much of your assets–maybe two-thirds–will be in stocks. But you’ll own a higher percentage of small cap stocks than the people who are searching for growth and income, and you may own a few speculative issues as well (microcap stocks)…No risk, no reward, that’s your motto. You want to increase your capital, and do it quickly. When you talk about making a “long-term” investment, you’re probably talking about having your money tied up from one to two years. Why the shortening of time horizons? Because aggressive investors want to take immediate advantage of the changes in the relative values of different kinds of assets…they’ll put their money in investments with far greater growth opportunities…One way of being aggressive–possibly the most dangerous way–is to commit a lot of your money to just one issue…You’re going for broke. You’ll pass up the relative safety that comes through diversification for the potentially high appreciation you can receive by owning a substantial number of shares of one stock…Also, aggressive investors are usually far more interested in growth than they are in dividends…They figure the capital gains produced by these stocks will be greater than any dividends they might receive…You’re trying to make volatility work in your favor…Aggressive investors seldom hedge their bets. They’re willing to put all their eggs in one basket (and then they–or their money managers–watch that basket very carefully)…The real problem can be summed up in three words: risk, risk, risk. However, the possible rewards can also be described in three words: gain, gain, gain (pp. 241-244).
This leaves us with a few additional guidelines:
5. Small cap stocks and microcap stocks (in that order).
6. Outperforming the S&P 500 over a 2-year time projection (TipRanks Stock Comparison).
7. Own one share of hundreds of small caps and microcaps and watch them every day. Add hundreds of dollars or even thousands of dollars to stocks that have a gainful day in the area of 200% to 1,000%, and see what happens. Sell 99% of the shares when it becomes obvious that the rally is over so you can cut your losses.
Lastly these words from Amy Domini’s Ethical Investing can cast more light on growth stocks:
INC. tracks the fastest-growing public companies in America…When I discuss investing in small companies, I am not boosting penny stocks. These are stocks (usually priced below $5 a share) of companies which have little more than an idea for making money. These companies are rank speculations, nothing more. During every market rally, I hear stories about fortunes being made on the Denver Exchange, where penny stocks are sold…Always look for companies that can finance most of their growth internally. If a company has to issue more stock, the new shares will dilute earnings. If it has to issue debt, the balance sheet picture weakens considerably…The small company often has one basic product or service area. It usually has one one type of customer. And it offers an enormous potential for growth or income…Over the last decade small companies have offered enormous returns to investors who previously only dreamt of such rewards…The larger, more established companies present less risk. However, they do not offer the same chance for spectacular growth. It is considerably easier for an emerging company with [sales] revenues of $5 million ($14m in 2023) to double them for a larger company to double $2 billion ($6b in 2023)…Growth stocks are relatively expensive…However, all growth-oriented investors share one characteristic: patience. They do not sell at the first sign of a profit so long as there is still a good reason to continue to buy the stock. They stick with an investment for the long haul, selling only when the vehicle’s growth stalls….By investing in the stocks of companies which are growing quickly, George and Julie give themselves an opportunity to meet their future cash needs more easily…the capital gains they should realize will put their children through college…Where do you look for growth among traditional investments? Common stocks…The alternatives will not produce the growth you are looking for…The best play for growth is to find fast-growing industries and identify the best companies in them, to buy their stocks, and to hold them until the moment comes to sell…What you need is a realistic view of the company’s growth potential. The most important data are earnings projections. These projections can have a drastic effect on a company’s stock…Your local library may carry Standard & Poor’s Earnings Digest or Value Line, which lists the projections of many companies’ earnings…At this point you have all the information you need to make a decision…Armed with this information, you are ready to place an order (pp. 83-86, 88-89, 92, 96-97, 99, 106).
She restated and confirmed some of the things that were said above already, but in terms of some additional guidelines on growth stocks, she says:
8. Penny stocks priced under $5 a share are not the same thing as growth stocks. Penny stocks should be considered as get-rich-quick speculations. The main difference seems to be in the price of the stock.
9. Balance sheets should say that earnings are increasing and debt is decreasing (use Value Line).
10. Growth stocks center around one fast-selling product.
11. Nanocap stocks (under $50m) are what Domini means by growth stocks. ARCB does not qualify as a growth stock here because Value Line says the revenues are $3.9b which is slightly over the Market Cap of $2.5b. WIRE does not qualify as a growth stock here because Value Line says the revenues are $2.5b which is slightly under the Market Cap of $3.66b.
12. Growth stocks are expensive (points to ARCB and WIRE are because of their $100+ prices, but away from them in terms of their Market Cap). According to Domini, “expensive” is relative: but we do know that the price is far above the penny stock price of $1 to $5. In her view a true-blue growth stock might be defined as a stock from the INC. 5000 or just IPO lists on inc.com that have a moderate to high price with a Market Cap in the Nanocap category.
13. Growth investors have to be patient for the day when their stocks will rally into profitable gains.
14. Most parents put their kids through college from the capital gains of growth stocks.
FINVIZ SCREEN: AMY DOMINI’S RULES APPLIED AS MUCH AS POSSIBLE
AMY DOMINI SCREEN: STOCK COMPARISONS WITH S&P GLOBAL (SPGI)
THE FINAL RESULT OF ALL THE SCREENS: 5 STOCKS POSITIONED TO BEAT THE S&P 500:
BELOW IS THE MOST PROFIT-POTENTIAL LIST OF GROWTH STOCKS I HAVE EVER POPULATED. IT RANKS ALL THE GROWTH STOCKS BASED ON 3-YEAR PERFORMANCE. IT IS 2 PAGES LONG AND CONTAINS THE FIVE STOCKS ABOVE: ESEA, CMT, ARCB, WIRE, BTBT: – HERE’S THE LINK TO IT:
UPDATE: 2/19/23– After hours of study and analysis, after the above video was posted, I found what I believe comes to be the closest things to 3-year and 5-year short lists of growth stocks in the Benjamin Graham, Philip Fisher, and Amy Domini sense (see The Intelligent Investor, p. 389; Common Stocks and Uncommon Profits, pp. 47, 98-101, 131; Ethical Investing, p. 97). Of course, BRI screening and fundamental stock valuation in terms of balance sheets and income statements, increasing cash assets, increasing yearly sales growth, and decreasing yearly long-term debt, need to be applied to all of them as further filters, but still this is the best thing I got. These are the types of stocks that Domini says young parents use to put their kids through college:
I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
—
UPDATE: 2/10/23 – With this Finviz screen, I think you’d be pretty lucky. It appears that if you bought all 19 of these stocks, then there would be around at least 7 chances through a 12-month period where you might be pleasantly surprised by a twobagger and be able to double your money.
UPDATE: 2/10/23 – Although it seems logical that a table of odds like this, akin to a scratch-off lottery ticket in which all of the prizes have been exposed, would be the best way to screen for profitable stocks. In this case, if all 20 of the stocks on this page were bought, then there would be about 8 opportunities of doubling and tripling your money in 90 days. And 16 opportunities of the same over a 12 month period…
But taken from this “table of odds” approach, I’d have to say this is my best screen so far…
1. Market Cap: -Micro (under $300m).
2. Performance: Quarter +50%.
3. EPS Growth qtr over qtr: Over 5%.
In this case, if all 20 of these stocks were purchased, then you would have 18 chances to double, triple, quadruple, or even gain a fivefold or tenfold return over the course of 12 months! But since fast growing microcap stocks are better to be held for short-term periods, it might be better to measure them on a quarterly basis (90 day periods). In this case, you would still have a sporting chance at doubling, tripling, or even quadrupling your money in a 90 day time period: about 16 chances to do this with only 20 stocks being purchased….theoretically. However, the proof is in the pudding. You would need to buy one share of all 20 stocks, and monitor them daily on schwab.com to see if any “pleasant surprises,” with twobaggers (200% gainers) and threebaggers (300% gainers), might pop up along the way. If so, then simply buy more shares for those stocks as they pleasantly surprise you: and then sell 99% of their shares when that particular stock starts to decline, so you can cut your losses and cash in what’s left of your capital gains.
I did the above screen one more time and apparently got a better result. Then I plugged the top ten quarterly performers into the Barchart Comparison Tool…
But if I were to be completely transparent, out of these “top 5 gainers,” the only stock that is “fundamentally sound” is Cuentas (CUEN), which MarketWatch indicates on the Financials: Balance Sheet, that the cash position is increasing and the long-term debt has been completely paid off. Sales are growing. The same just simply can’t be said for the other 4 stocks.
UPDATE – 2/14/23 – Choosy moms choose JIF, but choosy investors will pick the strongest microcap stocks with the best quarterly sales growth and monthly and quarterly performance records. The only thing that remains after that, is to check for increasing cash, and decreasing long-term debt, on the stock’s Financials: Balance Sheet. Out of these four stocks, one is a China stock (CJJD, communist), one is gambling (LTRY), and one has only a very gradually increasing cash position and a very gradual long-term debt reduction (IVDA). As mentioned before, Cuentas (CUEN) passes all these tests with flying colors. But I suppose if you wanted to take a chance on Iveda Solutions (IVDA) you could.
UPDATE – 2/17/23 – Value Line‘s 200%+ “Total Return” Screen
When looking for a long-term growth stock, it seems that the Finviz screener was more accurate than Value Line‘s “Total Return” screen: TMDX, TH, and ASC all double your money over a 3 year time frame. If the financials are fundamentally sound, then these might be the kind of growth stocks that Philip Fisher and Peter Lynch would hunt for. These were uncovered by the Finviz Performance: Year +200% screen and compared on the TipRanks Stock Comparison Tool.
WesleyGospel Ministries 