Penny stock investors have been taking a closer look at shares of Sears Hometown and Outlet Stores, Inc. (NASDAQ:SHOS) after the price moved 2.70% following the conclusion of a recent trading day, reaching a price of $1.90 in the process.
Sears Hometown and Outlet Stores, Inc. (NASDAQ:SHOS)‘s stock has performed at -60.64%. Breaking that down further, it has performed -17.78% for the week, -17.78% for the month, -21.28% over the last quarter, -45.59% for the past half-year and -63.00% for this last year.
A big advantage of investing in small-cap stocks is that there is an opportunity to beat the institutional investors. Mutual funds have restrictions limiting their power to buy up large portions of any one company’s outstanding shares. The stock is -18.32% away from the 20-Day Simple Moving Average. Their 50-Day Simple Moving Average is a difference of -10.92% from current levels. Further back, their 200-Day Simple Moving Average is -36.28% difference from today’s price. As we stand today, the stock is -26.92% from its 50-Day High and 8.57% from the 50-day low.
Due to the lack of information regarding OTC stocks, caution and care should be taken before purchasing these securities. Only brokers that own and specialize in OTC stocks should be utilized, as they are more familiar with the differences between OTC stocks and the major listed securities. Investors must evaluate the companies behind the OTC stock and learn how fundamentally sound they are and if they and have addressed or overcome any problems. Investors should check the critical financial data, specifically their cash flow, capital, earnings per share (EPS), recent sales, and book value.
Any newcomers to OTC stocks should practice trading securities first, due to the volatile and unpredictable nature of the commodities market. A number of online virtual trading programs allow you to trade stocks, futures and options without any actual financial risk.
Over-the-counter (OTC) stocks are not listed on the major stock exchanges like the New York Stock Exchange (NYSE). These securities are typically acquired online through a discount broker, due to the lack of a major exchange listing.
OTC stocks are considered to be a riskier investment than other securities due to the fact that they have been removed (de-listed) from a major exchange, or otherwise do not qualify for any of the major exchanges. Bid and ask prices can be found on the OTC Bulletin Board (OTCBB) and/or the “Pink Sheets”. Ask prices are simply the amount that the stockholder wants to receive. Bid prices, on the other hand, are the offered price of investors. OTC sellers can accept, refuse or suggest a new ask price.
Another challenge facing investors is that OTC stocks can be difficult to research, as much less statistical data is usually published. These companies are typically smaller in size or have experienced some recent issues or problems. Cautious investors will need to research using valid reference tools, such as the OTC Research Corporation to find projections, operational results, and expert opinions on the stability and reliability of OTC stocks and the companies that are behind them.
OTC stocks can be purchased online, but caution and care should be exercised. Many brokers who offer OTC stocks follow the pricing and operating results with less diligence than they do for big ticket stock exchange-listed securities. OTC stocks are referred to as “thinly traded” securities due to the sheer lack the volume compared to the NYSE or some other major exchange stocks. However, they can still be bought online.
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