The Next Home Run Stock

I assume that you, like everyone and his Aunt Audrey, would love to find the next Wal-Mart (NYSE: WMT  ) -- to dig out the market's most precious small companies. Back in October 1977, Wal-Mart traded at a split- and dividend-adjusted price of $0.05 per share. Today, it trades for around $56. In a little more than 30 years, Wal-Mart has turned a $5,000 investment into more than $5 million.

Of course you'd love to buy the next Wal-Mart.

But you'd prefer not to take on extreme risk, right?

I think you're smart to think that way. So do a host of great money managers -- from Peter Lynch to Seth Klarman, Bill Miller to Charles Royce. They've all searched for small companies with a mixture of sales and free cash flow growth, superior returns on invested capital, heavy insider ownership, and healthy assets -- all at a reasonable price.

Forever great
But remember, companies like Wal-Mart typically exhibit excellent financials from the day they hit the public markets. Wal-Mart was never a penny stock (again, that share price of $0.05 back in October 1977 is split- and dividend-adjusted; the stock traded at $17 back then).

Wal-Mart didn't hype itself in press releases, nor did management make outlandish promises to its investors. As it turns out, if you want to find monster long-term winners, you shouldn't throw money at shaky, speculative companies.

Wal-Mart founder Sam Walton, who owned a massive stake in the enterprise, ran his company conservatively for decades. And just four years after its IPO as a tiny public company, Wal-Mart began paying a dividend. This business was run to sustain yearly profit growth indefinitely.

If you're going to invest in small-cap rocket stocks, as our team does at Motley Fool Hidden Gems, please avoid the whisper-stock party tips and hype jobs. They destroy wealth over time. Wal-Mart wasn't getting hyped. No one was following it!

Contrary to popular perception, you need not assume great risk to invest in the best small caps. You only need to train yourself to look for disciplined, conservatively run small businesses.

Finding these stocks doesn't involve a hopeless search through barn-sized haystacks for a lone platinum needle. The stock market features plenty of promising smaller companies, run successfully by founders with large personal stakes in the enterprise.

In fact, they thrive in every industry -- electrical, education, medicine, retail, and beyond. Take a look at these six great investments from 1996 to 2008, all of which were small caps in the mid-'90s.

 

Dec. 18, 1996

Dec. 18, 2008

Return on Investment

Adobe Systems (Nasdaq: ADBE  )

$4.95

$21.38

332%

Apache (NYSE: APA  )

$14.43

$69.81

384%

Cliffs Natural Resources (NYSE: CLF  )

$3.88

$27.10

598%

Express Scripts (Nasdaq: ESRX  )

$2.12

$59.35

2,700%

Frontier Oil (NYSE: FTO  )

$0.76

$12.29

1,517%

Terex (NYSE: TEX  )

$4.44

$16.48

271%

All prices adjusted for splits and dividends. Data from Yahoo! Finance.

Note, again, that this group hails from a broad variety of sectors. A few are familiar faces, while the others remain largely unknown on Main Street. But each was a small cap 12 years ago. And not only were they not industry stalwarts, but they were also flying below most consumers' and investors' radar. They had yet to attract a cadre of Wall Street analysts and big institutional investors.

Their stock prices reflected it. They were cheap because they were irrelevant! And these sorts of opportunities still exist today. 

The next big thing
The 20- to 700-baggers of the next 12 years are out there right now, with their fuses lit and a wide-open sky above them. But they aren't Apache, valued at $25 billion today. They're also not companies like Wal-Mart, valued at $219 billion and covered by more than 20 Wall Street analysts.

They're small companies with strong founders and executive ownership north of 10%. Companies without debt concerns. Companies that generate excess cash from their operations, some of which already pay dividends. Companies that function without any real reliance on Wall Street for financing or table-pounding "strong buy" ratings.

I know it sounds contrary, but I want you to see that many of these small businesses offer low risk and high rewards for their long-term owners. How could a small company be less risky than a giant? Ask the former owners of WorldCom. That company wasn't just overfollowed -- it was fraudulently run!

The exact opposite exists with great small caps. They're well-run and underfollowed on Wall Street, creating price inefficiencies that strongly favor long-term investors.

Does that sound possible? Does it sound logical? It's certainly contrary.

What you should look for
Our team at Hidden Gems advises you to track down the following:

  • Founders with large personal stakes.
  • Financial statements that are easy to read.
  • A solid asset base with little or no debt.
  • Price ratios that significantly undershoot growth rates of free cash flow.
  • Dominant positioning in a profitable niche.
  • Plenty of room to grow.

If you're inclined to think that every small-cap stock is doomed to have a larger competitor stomp it out, I ask you to return to my list of strong performers above. Each rose from obscurity because of sound financial management and shareholder-friendly practices. The free markets gave them plenty of maneuvering room.

But not every small company is poised for enduring success. Of the thousands of stocks in the small-cap universe, I find that 90% are too richly valued or too speculative, given the underlying business. That remaining 10%, however, contains hundreds of small caps that will beat the market, and dozens that will rise more than 30 times in value over the next 10 to 15 years.

You can read about this, and all of our Hidden Gems recommendations, right now, by signing up for a 30-day free trial. There is no obligation to subscribe.

This article was first published Sept. 24, 2003. It has been updated.

Tom Gardner is co-founder of The Motley Fool. He does not own shares of any company mentioned in this article. Wal-Mart Stores is a Motley Fool Inside Value recommendation. The Motley Fool owns shares of Terex. The Fool has a disclosure policy.


Read/Post Comments (43) | Recommend This Article (237)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 20, 2008, at 10:32 AM, madmilker wrote:

    People in America need to realize jus what got America in this shape..."cheap" yes so-call cheap items from a foreign land.

    quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!

    Now! if there be 182 country's making items for the world to buy and they have only 5% of the pie in China...duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there.... but with the "yuan" going up in value and the US dollar going down...all the foreign items that the American consumer buys thinking it is cheap has went up in price.

    People...its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the "we the people" have to turn to the "second" largest employer in America(Uncle Sam) to sell "we the people" debt in order to get all them dollars back!

    50 years ago a foreigner would had given their left nut for a US dollar or a Hershey's chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think "MADE IN AMERICA."

  • Report this Comment On January 27, 2009, at 9:33 PM, microdolx wrote:

    Milker - there isn't anything of substance MADE in the USA anymore except cars.

    Go look at ALL of your clothes, your computer, the monitor you are staring at right now, that new, digital TV the American FCC MANDATED (find me an affordable TV made in the USA - you can't).

    I fully blame the gov't for allowing anything coming into our borders - even if made overseas by an american-owned company.

    And I fully blame Clinton for NAFTA - made everyone rich BUT WE, THE PEOPLE.

  • Report this Comment On February 21, 2009, at 9:21 PM, sciguy77 wrote:

    Sometimes investing takes patience. You never know where you will be 10 years from now, but I certainly don't want to be looking back wondering why I didn't buy that stock. :)

  • Report this Comment On March 08, 2009, at 3:30 PM, bdpatty2 wrote:

    Patience is a wonderful virtue and people who try virtue are likely to obtain the wrath of patient people. today I have spent over 2 hours trying to determine a straight Answer from your report as to what the "cloud" development is and to determine if I can research out the history and background of the developers. You shuffle your clients (I subscribe to three of your reports)

    from one report to another and make the journey so

    annoying that Gorilla news letter is looking better and better all the time. If I understand your report that I can read, Goggle is one of the two companies on the ground floor but who is the other one.

    I have been following your recommendations for over a year and I am down 43% from Nov 2007. I have followed Gorilla Trades and am down 36% for their recommendations. I have pulled $1,000.000.00 out of the market an parked part of it at 3.3 percent for short term.

    Do you guys have a simple one-tw0-three investment method or do you cover your tracks with multiple recommendations.

    Truly, I am confused quite often when I try to determine what course I should take after reading all there reports.

    I am only one of your clients, but I have spoken with others who are having the same difficutly as I and who also are looking for better and more straight forward repoting than we believe we are getting.

    Perhaps what we thought we were buying in information is for sale at a higher price and unless we give you more money we will continue to find

    confusion is recommendations.

    I;m sorry if I sound callous, but I am only trying to find some way to invest with good sense and in good companies.

    Yes I still have dolby, netflix, intuitive surgical, chubb, marvel and netgear which I purchases shares in from your recommendations. Selling the other recommendations cost me over $800,000.00 in about one year.

    Thank you for listening to me.

    Bill Patty

  • Report this Comment On April 13, 2009, at 5:44 PM, dojaburner wrote:

    I have had very bad luck following your advice on Hidden Gems. HPY, AOB, LNDC, MIDD, PSTA. There have been many more but these are just the ones off the top of my head. Paying $100 a year to lose 65% doesn't sound like a good idea to me. I'll have to pass. About the only stock that I made money on with your recomendation was TSRA. I'll admit I have made mistakes that cost me money in the market. The biggest mistake so far has been to listen to you.

  • Report this Comment On May 03, 2009, at 6:06 PM, AhabQuarterdeck wrote:

    Your customers tell a sad story. A "little lower the mark." This service is a tease, a paper mask.

  • Report this Comment On May 05, 2009, at 2:47 PM, MarionBainbridge wrote:

    Lost 6 figures on Fools GG's last year.

    BRKA shares lost over 50% too so everything in

    perspective. I'm back again though sorry Mann is

    no longer here.

  • Report this Comment On May 05, 2009, at 3:11 PM, catoismymotor wrote:

    Dojaburner,

    I'll assume you sold most of those positions. Had you kept them you would have recouped most of your losses by this point.

    Cato

  • Report this Comment On June 19, 2009, at 9:05 PM, tshk1221 wrote:

    Dear Bill,

    I'm sorry for the losses you got. Why don't you apply the following method for your future investments rather than blindly following recommendations from Motley Fool? I don't think the five companies Motley just listed in this article are high-quality companies because we don't know what they are doing! I excluded things like fundamentals.

    For example, Kraft Foods (KFT):

    - Enterprise value as of today is $57 billion. Enterprise value is very similar, though not exact, to the intrinsic value of a company.

    - Market cap as of today is $37.4 billion.

    - Market cap is about 34% lower than the enterprise value today. It is still a good buy significantly undervalued. Could have been the best buy when the difference was about 50% - 60% back in March.

    - Dividend yield is strong at 4.7%.

    - Food industry leader / brand leader (so many famous small and large brands / small revenue drivers

    - One of the Oracle's core holdings

    - We know what KFT does. We can always buy, taste and test their products and their qualities at grocery stores and Wal Mart.

    - To me, KFT is one of the most undervalued, high-quality companies you can find now.

    Buy KFT now at 34% discount, hold KFT long-term while reinvesting dividends and sell KFT (if you want to. I don't want to.) when its market cap exceeds its enterprise value by at least 50% or more. It could be 5 years later or 10 years later or when a bull is at its peak.

    I hope this method could help you a little.

  • Report this Comment On June 29, 2009, at 12:03 PM, msfitts wrote:

    Again , the article seemed little more than a 'tease".

  • Report this Comment On August 26, 2009, at 11:01 AM, readhead7561 wrote:

    Thank you tshk1221 for this objective explanation of a good measure we beginners can use to our advantage; the kind of information I had hoped to find on this website. Every little bit helps.

  • Report this Comment On September 07, 2009, at 6:28 AM, ozzfan1317 wrote:

    You shouldnt blindly follow reccomendations to those above that have lost money. Look over a companys balance sheet before you invest. If you cant handle big price movements or are unable to regulary check your portfolio avoid speculative plays or companies that dont have rock solid fundamentals. It is your best bet to buy a great company at a reasonable price and be patient. Also never stop trying to learn you can never know too much.

  • Report this Comment On September 27, 2009, at 12:45 AM, wrldtrvlr wrote:

    Motley Fool has some solid stock ideas, but you have to make the "buy" decision yourself without putting it on autopilot and buying because an analyst and some discussion board gurus think it's a great stock.

    As a starting point and to help educate yourself on the stock market I think there's some wisdom to be found with TMF.

    However, as you become able to properly value the companies yourself and have an investing methodology that suits you, it can be used more as a place to garner some ideas for future investments.

  • Report this Comment On January 13, 2010, at 11:27 PM, ombowstring999 wrote:

    So, what is the name of the next home run stock?

  • Report this Comment On January 13, 2010, at 11:37 PM, Tacomatight wrote:

    Hey guys,

    My sympathy for you that took such a drubbing. Pains me just to read it. Keep up the fight you'll get it back!

    Sincerely,

    Tacomatight

  • Report this Comment On January 19, 2010, at 5:49 PM, Fool wrote:

    It's impossible to get rich on other peoples advice

    do your own homework

    also after doing your home work you still may not do well

    that's where skill comes in, maybe you are not good enough to play in a NO MOAT game of stock market

    Just like football only a few make the NFL

    lol

  • Report this Comment On January 27, 2010, at 10:41 AM, belihe wrote:

    so as a beginner I thought well I don't have time to study companies and I don't know what I see after I study so if I take knowledgeable advice or invest with those who have invested their money beside me and have that knowledge then I should do much better than trying to go up against a daunting amount of information coupled with the lack of understanding of a stock market and all its nooks and crannies which the more I learn about the more I believe no one could actually have a grasp on. It reminds, exactly, me of studying astrology. In fact, I am sure it is the same thing we simply replaced the plants with Nasdaq, S&P....

    and after I pay for that study and knowledge it is suggested that I do the work myself so what would I be paying for? something to read?

  • Report this Comment On February 19, 2010, at 9:39 AM, patientsequalspr wrote:

    I'm new on here and not sure if this is the right place to post this so forgive me if it's not. I'm a Huge fan of " Green Companies" this is one that has been suggested to me by a friend. TGGI........Does anyone here follow this one? Thanks and sorry if I'm in the wrong area.

    Trans Global Group, Inc., (?TGGI?) - is in the business of acquiring GREEN related technologies or partnering with companies that have unique products within the GREEN industry. TGGI recently acquired Ecosafe, Inc. and its wholly owned subsidiary Ecosafe Insulation of Florida, LLC. Ecosafe is a distributer and installer of Ecosafe Premium Foam? a product of American Green Group traded under the symbol ?(AMNE)?

    Ecosafe entered into an agreement for 5 territories in the State of Florida and the exclusive rights to so sell Infinite R within the State of Florida. Ecosafe and AMNE have entered into a joint venture giving Ecosafe the exclusive right to sell and install Ecosafe Premium Foam? and the right to market Infinite R in these states as well.

    TGGI is currently looking at several other companies that could complement the joint venture with AMNE.

    About Ecosafe Premium Foam?

    ECOSAFE Premium Foam® Insulation is a foam-in-place insulation that outperforms the other retrofit insulation products. ECOSAFE Premium Foam® is a semi-permeable foam that provides superior thermal & acoustical insulation. This environmentally friendly foam emits no CFCs and does not contain any petroleum. Unlike blown in insulation products, ECOSAFE Premium Foam® is injected as a liquid and is able to fill every void, thereby creating a highly effective thermal envelope preventing air infiltration. Ecosafe Premium Foam Insulation does not settle over time as can fiber based insulations. ECOSAFE Premium Foam® is an excellent choice for retrofitting homes even where old, ineffective insulation materials may already exists.

  • Report this Comment On March 29, 2010, at 6:34 PM, tleach10 wrote:

    What is presented here is often more advertising for other newsletters. Where is the info we were promised?

    Tom

  • Report this Comment On May 10, 2010, at 11:35 PM, Dwayne56 wrote:

    Today just made my very first stock purchase. (BDX) 10 shares. Now should i hold the shares long or short term ?

  • Report this Comment On May 17, 2010, at 8:13 PM, RWMonty wrote:

    There seems to be some dislike of Nafta.

    Free trade is not the problem. Americans can out compete anyone in an even match. The problem is that we have a bad tax system. We get cut out of Europe. Boat loads of foreign stuff is cheeper than smaller quantities of local stuff. And, you will be taxed extra if you try to save any money. The Government is the problem.

  • Report this Comment On June 29, 2010, at 3:57 AM, christywestwood wrote:

    I definitely agree on doing our homework rather than listening to other people's advice. As you become able to get your knowledge on it yourself and have an investing methodology that suits you, it can be used more as a place to garner some ideas for future investments.

  • Report this Comment On November 12, 2010, at 7:46 PM, Stimulant wrote:

    This article reads to me as:

    "Sign up for our 30-day free trial, to find what to invest in, or you'll lose on wrong investments and on missed opportunities"

    This kind of message seems to me to appear too requently on your online articles and on email-messages you are sending me.

    I would have liked to get some of these "hidden gems" articles, for free, in my mailbox, and be asked to sign up for you non-free-trial services.

    I hope that you understand the context of this commment here.

    Thanks.

  • Report this Comment On January 07, 2011, at 10:23 AM, Solumex wrote:

    I dont know why someone doesnt want to do their own homework if is about THEIR save and increase their own money.

    The more that I learn the more that I will be on safe zone. If I have time to play xbox, go fishing, and some other issues, I will have plenty of time to study and protect my money.

    As far as I learn it is important to have a plan, to study the finance lingo, to fully understand what info to look and finally to be able to put all the info together to know what to do. I have no rush to lost my money, so I prefer to learn first and do it step by step...

    Thanks for your patience with this Newbie

  • Report this Comment On January 11, 2011, at 6:54 PM, JASYD wrote:

    I have used several of The Fools newsletters in the past and have invested in some of the companies, but not all, and have made money on the ones I have selected to invest in. What I have slowly figured out for myself (over the course of 15 years) of investing can be summarized as:

    1. FIRE YOUR STOCK BROKER

    They are out for numero uno (and you are not it)! They get paid on commissions when you buy and sell, not on a percentage of your gains. They often try to sell you into a stocks their companies underwrite as they pay higher commissions. I have yet to meet one that wants my business that will provide me with references and any sort of a track record for how they have done for their clients. I learned this my first couple of years of trading.

    2. PULL YOUR MONEY OUT OF MUTUAL FUNDS AND COMPANY MANAGED 401ks (if you can)

    Mutual funds historically have had the lowest rates of returns. Company managed 401ks are nearly as bad because many of them invest in mutual funds. Think I'm lying? Take a look at your statements! Diversify your money into stocks, bonds, exchange traded funds and cash. Later, when you are more experienced, add currencies and options.

    3. OPEN AN ON-LINE TRADING ACCOUNT

    I went into my stock brokers office (after I figured out what they were all about) and had them write a check payable to my online brokerage account "for benefit of" my Individual Retirement Account. This way I didn't get penalized for an early withdrawel. Online accounts give you control over the price you pay for a stock and the price you sell the stock at. For newbies these are called 'limit orders'. My fired 'stock broker' didn't bother to tell me about these. Essentially, if ABC company has traded between $35-$38 over the last 3 weeks, wouldn't it make sense to buy it at $35 instead of $38? With a limit order you can specify the price you want to buy/sell the stock at and you order isn't filled unless your price hits. There are many, many more beneits of an online trading account including tools to help you select investments.

    4. RESEARCH, RESEARCH, RESEARCH AND AVOID THE HYPE

    There are many free market commentary type e-newletters and e-mail reports you can subscribe to. I subscribe to many for different reasons. One reason is to keep up on what is happening in the market. The other reason is to get a handle on what many 'advisors' are trying to sell the masses on. I will also use some of them for stock ideas. Don't go out and buy ABC company because some newletter states they will be the next big thing. Research it. Find other stocks for other companies that do similar things, find the under-valued ones, the ones that haven't caughten the attention of the 'pump and dumpers'. If you want to subscribe to newsletters there is a great web site to help you screen the ones you are interested in: http://www.stockgumshoe.com

    This web site is great because it gives non-biased, user-rated reviews.

    5. BUY/SELL WITH A PLAN, NOT EMOTION

    You must, must, must eliminate the emotion in trading. The only way to do this is to have a pre-determined game plan, i.e., 'I will only buy ABC company if earnings increase next quarter. I will only buy ABC company if it's stock price pulls back to within it's 200 day moving average price with no apparent reason/bad news, I will sell ABC company if the stock price drops 5% below recent support levels', etc.

    Your plan should include stop-losses. For newbies, 'stop-losses' are a way to sell a stock if it hits a pre-determined price. You can enter stop-loss' orders on most on-line trading accounts. These will protect you in most instances if a stock price starts to drop and you are not setting at your computer to enter a sell order. You can also enter 'trailing stop-loss' orders. Trailing stop-loss orders allow you to set the 'stop' price as a percentage of the previous days closing price of the stock. I used one of these recently when a stock I bought jumped up 16% in a day. Good news came out on the stock and it shot up like a rocket. I entered a trailing stop-loss at 5% below the closing price that evening (thereby protecting an 11% gain: 16% (day's closing price) minus 5% (possible drop in stock price to hit stop) equals 11%). I didn't want to sell it if it was going to continue to run up, but I wanted to protect the gain I had made. The next day the stock shot up another 24% on sheer volume and my 'trailing stop-loss' moved up (trailed) to within 5% of that days close. The next day some news came out that questioned the same news that triggered the buying frenzie and the stock plummeted down back to the same price it was prior to the news that started the upward frenzie. I locked in a $26,000 profit because of that trailing stop-loss! Another thing I have learned about buying stocks is that you can control the research into the company, but you cannot control the news, the rumors and the market makers!

    You should also have a much larger plan to include how you are going to diversify your money. This will depend on your age and risk tolerance/ability. Your plan should include not having more than 2%-3% of your total porfolio value in any one given investment. Keep some in cash for great buying opportunities and don't sit idle. The stock market of yesterday was a buy-and-hold market. Today, with the availibility of computers, on-line trading and on-line news driving the markets, you need to pro-actively managing your investments. Let your winners run (protecting your gains with stop-losses) and sell your loosers with minimal loss (like no more than 10%-12%). If your winners stall out and you see the stock price not moving much, move the money into something else.

    A NOTE ON STOCK SELECTION

    I tend to be a value investor, looking for stocks that appear to be undervalued. I look at PE ratios, intrinsic and book values, debt ratios and I look at future earnings projections. I like stocks that have a high inside ownership percentage if it meets my criteria for above and if they have a high inside ownership and pay a nice dividend than all the better! If you want more insight or some stock suggestions you can email me at bassangling@gmail.com

    Happy Investing!

  • Report this Comment On March 04, 2011, at 4:17 AM, winters253 wrote:

    some of you are writing a plamplet... how come no-one mentions past history like viewing the charting max looking at past history of a company ?

  • Report this Comment On March 04, 2011, at 3:28 PM, LohnRanger wrote:

    If it were as simple as reading a motley fool article and buying the stock, membership would be to the millions and we would all be rich. Use common sense, do you homework and research with several different sites before making a purchase. I don't like hidden gems, but stock advisor and rule breakers have provided nice returns. I'm up 8% this year already and we're in March. Find users on here with great ideas- TMFBabo, BravoBevo, and TMFUltralong have all given me great ideas that have in turn made me a lot of money. Take a little responsibility for your decisions, this is a service that makes recommendations, but do your due diligence and you will probably stop making dumb decisions..

  • Report this Comment On June 05, 2011, at 11:48 PM, mstephenson2000 wrote:

    I agree, people should be doing their own research/homework. Makes you wonder why the ppl providing the research aren't off making enough $ that they don't have to provide.

  • Report this Comment On June 05, 2011, at 11:48 PM, mstephenson2000 wrote:

    I agree, people should be doing their own research/homework. Makes you wonder why the ppl providing the research aren't off making enough $ that they don't have to provide. www.investmentresearchcenter.com

  • Report this Comment On September 17, 2011, at 1:00 AM, investmentyour wrote:

    COP is a strong company.. I have been looking into that company for awhile and i see a pontential growth for it.. Companies start using energing as never before, so I think there will be a boom in the energy sector as year to come..

    CHK is also another great company with 12% payout ratio and a outstanding dividend payment.. Check it out and tell me what you think on my website:

    http://investmentyour.com

  • Report this Comment On November 27, 2011, at 9:28 PM, shirlhinkle wrote:

    My plan is to get ahead of the game for once!

    I have more mortgage than house value.

    A large number of people lost jobs and houses in 2008 and 2009.

    Many had to declare bankruptcy.

    A portion of these people have been back to work for at least 1 year.

    They are in a good position to purchase a new home at discount prices.

    They will start qualifying for new mortgages 3 yrs after bankruptcy.

    That means these homes can get financed in 2012 and 2013.

    I'm getting on board with FNMA while it is a sleeper.

    It’s only going for 20¢!

    I don’t think the government will let it’s own property fail, do you?

    It jumped up to $1.00 last Feb 2011, so it has potential now.

    I think it is going to go far past this level - to $35 within 10 years.

    By betting $200 for 1000 shares I could lose my little investment.

    But, when it goes to $2 I make 10x my money, or $10,000.

    It was at $70 in 2008.

    When it goes to 10% of that amount or $7 that's 35x gain.

    For 1000 shares that's $35,000.

    I will use this benefit from FNMA to pay my mortgage down.

    Then I will have more house value than mortgage.

    That is the way life should be.

    It is definitely worth risking $200.

    Shirl

  • Report this Comment On December 01, 2011, at 9:09 AM, AimHighProfits wrote:

    FNMA is a good one to take a shot on Shirl. I have them on my watch list right now. I had the same issue; getting ahead for once and found the path by signing up to some free stock alerts and found many were nothing more than typical pump and dump schemes. However, when I really wanted to learn more about penny stocks and monitor their performances, I found the guys at AimHighProfits.com. Last 2 months they turned me on to INHX, PEIX and ANDS, all 100+% penny stock winners.

    http://www.aimhighprofits.com/about-penny-stocks

  • Report this Comment On May 01, 2012, at 5:57 PM, BlkZ06 wrote:

    I look for stock buy opportunities like BP when they had their accident a couple years ago. I bought them in the high 20s and when things settled down, they went back to around 40 and I dumped them. It was an opportunity buy. When the Japan disaster happened, I bought into some uranium stocks because they were hit, but they haven't recovered yet but I think longer term they will. Energy stocks look good in the future such as natural gas, and others in my opinion especially after the election if Obama is dumped.

  • Report this Comment On June 12, 2012, at 2:30 PM, tedwarrenlives wrote:

    I don't blame INVESTORS cashing out and hiding in the side lines.

    IT IS A RIGGED GAME, NO DOUBT ABOUT IT.

    Ex;

    1. Government insider trading loop holes.

    2. Senator/Governor Corozine and his crazy $1.2B SNAFU

    3. Cogwell Spencer Inc. CEO selling his company after he loads up on cheap shares of his own company to bag the premium.

    4. Funds like CFP with huge dividends with huger nose dives in pps- a leagalize ponzi scheme.

    5. Funds who buy or sell out of stocks drive the pps up and down easily 15% over that period.

    6. Market Makers playing games. LEVEL II is complete B.S. we never see the actualy BID AND ASK SIZES, what ever they present to us is it.

    7. Goldman Sachs and the muppet crusaders

    I would tell anyone this GAME is built to rip you off and MILLIONS think that also which can be verified with the volume being half of it what it was in the peak years.

    TELL YOUR F'N WALL ST. peers to STOP RIPPING retail investors off because this MIS-TRUST is going to be passed down through GENERATIONS.

    Without many buyers and sellers you better hope the corporations pay FAT DIVIDENDS to you thats going to be the lion's share of your ROC.

    They are total DB for letting their greed destroy the greatest wealth making machine in the world.

    TRULY FOOLS.

  • Report this Comment On October 11, 2012, at 1:25 PM, ScPhD wrote:

    All are very well written comments, and there is a common thread of raw truth running throough all of them. Everyone can not be an expert on everything and should not ever try to be one. If you look at several of histories best money managers, they all had and knew their limitations. Here are a few ways to improve your odds at being on the positive side of investing. Ready here they are in no specific order: 1) Invest in things tht interest you and you understand them. 2) Read the balance sheet for three years on the investment, and wait a few days then read it again.3) Never invest more than 25% for your invest dollars in any one business, or 10% in three businesses in the same industry. All last but not least have an exit target for each investment. Simple guidelines but not easily followed, try and be honest with yourself. Best wishes and prosper.

  • Report this Comment On November 21, 2012, at 8:38 PM, justinmaxwell86 wrote:

    Bill, its a cut-throat world out there... Dog eat dog. Just remember no1 is out there to help you. People are self-serving. Just be wary when heeding to other ppls advice, even mine. Im going to take you back (im assuming you were born before video games)... Do you remember playing Monopoly? For some reason everybody had a favorite "property type" to buy, whether it was the boardwalk, or utilities... i can remember playing, passing up certain properties just so that id have the dough to buy the ones i wanted. I often lost, having a jewish stepfather with the name of Goldstein didn't help my chances, using my method. My stepfather would always say "you're too picky." I often reflected at his tactics from a business standpoint... the answer to stocks i guess is in the name of the game. Find a company with as close a thing to a monopoly that you can find (an example here, in my humble opinion would be: Waste Management). Then make sure the company is a NEED (again i refer to WM, reason being: no1 has invented a magic trash disappearing machine, and i, frankly, wouldnt want months worth of trash in front of my house). Then, value it vs the opportunity to use your cash for another investment. Lastly, the p/e ratio (i am a believer of 6-12 p/e as good value, and anything above that is 'expensive'). Anyways, im only 26, and have been investing for 5 yrs, so my logic, if u will, may be flawed. To each his own, i just figured to give u my perspective. Best of luck! (oh and btw, im not trying to pump up wm as the gem stock here, it was just the first company i could think of that fit what i was trying to express).

  • Report this Comment On February 06, 2013, at 12:53 PM, EquityDigest wrote:

    Sigma Labs, Inc. (OTCBB: SGLB) announced today that it has filed a new provisional patent application that will enable rapid process qualification and part certification for 3D Printing of critical metal parts.

    $SGLB

  • Report this Comment On March 11, 2013, at 4:42 PM, BobHGlassLT wrote:

    This article is from 2008. Motley's needs to do a little house cleaning.

  • Report this Comment On April 07, 2013, at 7:44 PM, wheattjim wrote:

    The dividend on ERS (empire res) will probably be going up.

  • Report this Comment On August 08, 2013, at 3:38 PM, jargonific wrote:

    Watching Nuvilex these days for profit on investments made recently. NVLX

  • Report this Comment On August 30, 2013, at 7:40 PM, Drean wrote:

    PUMP n dump baby

  • Report this Comment On February 09, 2014, at 12:03 PM, desertjohn61 wrote:

    Hi i just signed up and am looking for a good penny stock. any suggestions

  • Report this Comment On July 17, 2014, at 12:54 PM, DavidDavis wrote:

    It's good to invest in mmj stocks. ALPHALA, for example.

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