He thinks it is a good buy, and is worth investing in, but I would love a second and third opinion. I do understand it is high risk, but I want to know if there is potential high return in this company? Thanks!!
2006-06-14 13:32:37 · 3 answers · asked by steelyourself 3 in Business & Finance ➔ Investing
penny stocks are typically worth very little, hence the name penny stocks. They also typically have very little movement (number of shares sold) on a typical day so they are VERY easy to manipulate. There can also be a very large spread between the buy (the price someone is willing to sell their shares at) and the sell (the price someone will agree to buy at) prices.
In a nutshell, someone says "this stock will do great" and spreads the word. Very, very easy to do on the Net. The originator of the rumor has already bought some..probably gradually over time to not jack the price up. Then that person starts to buy bigger blocks to create the "false" demand that makes other suckers believe it is really going to go up.
The first few in and out, make money and everyone else gets burned.
Such a stock transaction is NOT investing, it is speculating and gambling. It can be fun and a few make money at it, but VERY few.
Trading on momentum (stock movement) without completely understanding the underlying fundamentals of the company is speculation and those that do so and are successful are trained to spot movement and to get in and out quickly and with a disciplined plan (meaning they know before they buy at what price they will buy AND sell).
Real traders make all their money off the suckers that think it's easy money but don't know what they are doing.
Even if you found a penny stock for a great company, odds are it would be YEARS before it materialized into a solid investment. Think about it - stock represents an ownership interest in a company so..it should aprox double with a double in the value (sales, profits and growth ratio) of the company.
How fast do most companies grow? Very few double even on an annual basis. So...your $2 stock MIGHT be worth $4 next year; or not. Such a young company would be very hard to predict beyond that.
It is very easy to get real research on a legitimate stock. Yahoo Finance has great resources.
Rule of thumbs
- if you don't know how to evaluate a stock, you should not be buying without a qualified broker.
- with or without a broker, you should not be speculating with money you are not willing to lose.
- don't play with margin.
2006-06-14 14:03:55 · answer #1 · answered by Lori A 6 · 1⤊ 0⤋
The stock is currently priced at $0.06 and has been on an exchange since 1997. Unfortunately they have NO revenue and have been trading relatively low for quite some time. They did have a big spike back in 2000, but came right back down (as did most other stocks at the time). They also have only a single product in the pipelines, AVR118 and only 9 employees. So their sole survival currently relates to this product. Now, I'm a medical student (with a finance degree) and can't quite figure out what their product is since they don't give an exact description of it, but could it work, maybe. Could it work and also get approved by the FDA, another maybe. Do they have enough funding or someone that is willing to back them with the approximately $250 million (or more) that it takes to bring a drug to market? I'm not sure. Just some questions to consider when making your decision. One more thing to keep in mind, over the counter stocks are known to be easy to manipulate and riddled with fraud.
2006-06-15 00:54:41 · answer #2 · answered by Ferdi 2 · 0⤊ 0⤋
Well, its on the bulletin board, which is what the OB means, so it is very unlikely to be worth much. Probably 99% of bulletin board stocks are nearly worthless, and your chance of losing money on these is quite high.
That said, it's always possible that these companies can come back, and when they do, its a big deal.
Advanced Viral Research is, at least, a company that is doing something productive. But at this stage, it is purely research. The company has no profits, and worse yet, no revenues. Surely, it can't continue forever in this direction.
I'm not optimistic about it, but if they come across a great new find, sure, it could be a big deal. I just think there are better places to put your money, with higher chances of success.
2006-06-14 20:36:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋