March 22nd, 2010 — Market Commentary, Trading
Many individual investors and mutual fund managers choose not to invest or trade stocks selling less than $5/share. Many of these stocks, often referred to as penny stocks, will go to zero but what about the ones that don’t? Many mutual funds place limits on stocks they buy; penny stocks are often forbidden by mutual funds. Once these stocks reach the $5/share mark, mutual fund may jump in and push them higher.
Citigroup (C)
Citigroup is in a turn-around phase and once it pays back the government, this stock has the potential to move much higher. This stock is a longer-term trade or more like an investment, which could see a double in price action over the next few years.
SciClone Pharmaceuticals (SCLN)
SciClone is a Chinese pharmaceutical company that operates mostly in Asia but sells its primary drug ZADAXIN in 30 different countries. SciClone Pharmaceuticals recently had a big upgrade, which has driven up the price. SciClone Pharmaceuticals has many products in testing phase which once completed could drive the stock higher, easily reaching the $5/share mark.
Conexant Systems (CNXT)
Conexant Systems is a semiconductor company that recently reported a less than expected earnings loss. The stock currently has a PEG ratio of 0.33. Conexant closed today at $3.64. Although the trend is down, the stock may find support at around $3.00 as the 200 DMA will support the price. This stock is a trade and not an investment: place stop losses and be prepared to take profits quick.
Xinyuan Real Estate Co (XIN)
Xinyuan Real Estate is a Chinese property management company that also engages in residential real estate development. This stock trades at less 3.86 times forward P/E and at a PEG ratio of 0.14. If you believe in the Chinese real estate bubble, stay away from this stock or take it for a quick trade. The stock is currently selling at a discount to book value and presents a promising trade for a couple points.
Global Ship Lease (GSL)
Global Ship Lease leases container ships to various container-shipping companies with long-term contracts at fixed rates. The company is selling at less than book value with the current price/book ratio of 0.66 and a P/E ratio of 3.22. Global Ship Lease has 17 ships currently on the water with two more coming at the end of 2010.
Trading penny stocks significantly increases your risk. Most of the companies listed are microcap companies that can also increase risk. Please research these stocks before making any purchases. Consider penny stocks speculation and allocate the appropriate funds to them.
DISCLAIMER: I do own shares of SciClone Pharmaceutical.
Other Articles You Might Find Interesting:
- Tags: Investing, Stocks, Trading
March 17th, 2010 — Economy
Is the United States starting a trade war against the Chinese with the Currency Bill? Could the actions taken by the US government force the economy to double-dip rather than to recover? Who wins in this trade war, China or US? Is China really manipulating its currency?
Exports and Imports
China exports a flood of goods to the US and has for many years. The trade deficit has been in China’s favor since at least 1985 according to the US Census and has significantly increased over the years. Both countries need each other but who needs need whom more?
China Is The Largest Holder of Debt
China is the largest holder of US debt account for almost $900 billion in January. Not only are they making the products that the US buys, but they are also financing our government’s day-to-day activities. If China were to pull out of US treasuries and start investing elsewhere (which has begun), how does the US government finance it activities because they can only raise taxes so much on an already suffering consumer?
Who’s Manipulating Currencies?
Some of our elected officials claim that China is manipulating its currency and keeping it undervalued. The Chinese Yuan, which is pegged to the US Dollar, may be undervalued or could the US Dollar overvalued? What is in it for the US if the Yuan is undervalued? Yuan higher, US Dollar lower…China would have more money to buy discounted treasuries?
“It is the single biggest step we can take to promote U.S. job creation, particularly in the manufacturing sector. We plan to move forward with revamped legislation on this issue in the coming days,” said Senator Schumer.
Unless the currency is undervalued to the point that it would revalue the currency at 300 times what it’s currently at, I really don’t see it bringing jobs back to the US but rather inflating the prices on most of the (made in China) products we buy (look around, your probably staring at one now).
If the US government is starting a trade war over currency manipulation then maybe we should rethink some of the roles of the Federal Reserves. Coincidentally, this same organization manipulates the US Dollar through interest rates and the print more button.
Other Articles You Might Find Interesting:
- Tags: Economy
February 23rd, 2010 — Brokers
Looking for a broker geared toward the active trader? Lightspeed may be the answer. Lightspeed is a direct access broker that offers everything you need to analyze a variety of investment products in their trading platform. With ultra-low commissions and a great trading platform, Lightspeed might be your next broker.
The Trading Platform
Lightspeed’s trading platform is an all in one package. Lightspeed is one of the few brokers to offering a great charting package within their platform. Their platform is not for beginners, strictly for the experienced active trader. You can see a basic layout of their platform below.
If you do not understand or have problems with the desktop trading platform, they also have a web trader platform that will seem familiar to anyone who has ever used any online broker. Their web trader platform also provides a good amount of fundamental analysis.
Pricing and Commissions
Stocks – $0.00395 per share plus market center fees.
OTC BB and Pink sheets – $10 per order.
Options – $0.50 per contract, no minimum order.
Futures – $0.50 per order plus exchange fees.
Minimum Account Opening Funds – $2,000
For a full list of fees listed here.
Overall, Lightspeed is a solid broker with cheap commission and a great platform to trade from. If you are looking for a new broker, I would advise you to get Lightspeed a try.
Other Articles You Might Find Interesting:
- Tags: Brokers, Investing, Trading
February 22nd, 2010 — Brokers, Trading
If you are an active trader looking for a way to save on commissions then Interactive Brokers is probably the best choice for you. With their low commissions, many buy and hold investors have started using Interactive Brokers. So what does Interactive Brokers have to offer and at what price?
Investing/Trading Products Available
Stocks, ETFs, options, futures, bonds, warrants, mutual funds…and so on (click here for full list). Interactive Brokers offers everything that a retail investor can trade. With Interactive Brokers, you are not limited to just U.S. investments as Interactive Brokers allows trading in 80 different markets.
Trading Platform
Interactive Brokers has a variety of trading platforms to trade from whether using their desktop platform, web trader platform, or their mobile platform, you will always have a way to get out of a trade whether at your computer or not. As for their software, executions are great allowing you to enter orders on charts or order tickets. Their charting software offers very basic technical analysis tools, so a charting program (QuoteTracker, which is free, or a paid program like eSignal) is almost mandatory when using Interactive Brokers for technical trading. Interactive Brokers is geared toward the active trader so fundamental investors will have to do their research somewhere else.
Fees
Interactive Brokers is one of, if not the, lowest cost brokers. There is a minimum of $10,000 to open an account. Depending on what you products you trade, some additional fees may apply for data feeds. See a full list of fees here.
Overall, Interactive Brokers is the best broker for active traders and is quickly becoming a favorite among passive investors.
Other Articles You Might Find Interesting:
- Tags: Brokers, Trading
February 22nd, 2010 — Brokers
MB Trading is a direct access broker. They offer cheap commissions with a variety of trading platforms (desktop, web, mobile, and MetaTrader 4). MB Trading also has a wide range of investment products (stocks, ETFs, options, futures, mutual funds, bonds, Forex, and pink sheets and OTC BB stocks) to choose from.
Commissions
Stocks and ETFs -$4.95 per trade (10,0000 share limit) or $0.0075 per share with a $4.95 minimum.
Options – $0.95 per contract no minimum.
Futures – $0.95 per contract plus exchange fees.
Mutual Funds – $12.95 per transaction.
Bonds – $12.95 per transaction.
Forex – $2.95 per $100,000 traded.
Pink Sheets and OTC BB – $8.95 per trade with no share limit.
Software
As for their trading platforms…well you do not get much. MB Trading Desktop is nice if you like looking at numbers but do not expect any charts unless you are trading Forex. The only charting software will get with MB Trading comes with the MetaTrader 4 platform used for Forex. If you need charts, QuoteTracker is free charting software that works well with MB Trading. Otherwise, you will have to get a paid charting program like eSignal. Although the MB Trading platform is free, some data feeds fees will apply. These fees are waived after a specified amount of trades. See data fees here.
Overall
The commissions are cheaper than discount brokers are but they lack in software. If you already have research tools for fundamental analysis and willing to use free or paid charting software for technical analysis then MB Trading might be worth a look.
Other Articles You Might Find Interesting:
- Tags: Brokers
