Investors have been buzzing over shares of Gold Reserve Inc. (:GDRZF) as its price hit $4.2 at the end of the most recent trading day. The stock is traded on OTC in the Basic Materials sector and Mining – Gold industry.
Average Volume is the amount of securities traded in a day on average over a specific time period. Trading activity relates to the liquidity of a security. When average volume is high, the stock has high liquidity and can be therefore easily traded, while conversely, when the trading volume is low, the commodity will be less expensive as traders are not as willing to purchase it. Average volume has an effect on the price of the security. Gold Reserve Inc. (:GDRZF) has seen 11420.9 shares trade hands on an average basis.
Gold Reserve Inc. (:GDRZF)’s 52-Week High-Low Range Price % is 85.17. Countless factors affect a security’s price and, therefore, its range. Macroeconomic factors such as interest rates and the economic cycle significantly impact the price of securities over lengthy periods of time. A big recession, for example, can dramatically widen the price range equities as they plummet in price.
Considering that price volatility is equivalent to risk, a commodity’s trading range is a great indicator of risk. Conservative investors will gravitate towards securities with smaller price fluctuations as compared to securities with larger price swings, preferring to invest in relatively stable sectors such as health care, utilities, and telecommunications and avoiding high-beta sectors like commodities, technology, and financials.
The mathematical calculation that represents the degree of change over time is known as “percentage change”. In finance, it serves many purposes, and is often used to represent the price change of a commodity.
Gold Reserve Inc. (:GDRZF)’s Price Change % over the last week is 7.64%. It’s % Price Change over the previous month is 12.14% and previous three months is 9.38%. Finally, looking back over the past year-to-date, Gold Reserve Inc. (:GDRZF)’s Price Change % is 0.68%.
Percentage change can be applied to any quantity that is measured over time any given time period. Say you are tracking the price of a stock. If the price increased, the formula [(New Price – Old Price)/Old Price] is applied and then take that number and multiply it by 100. If the price of a stock decreased, the formula [(Old Price – New Price)/Old Price] is applied then multiplied by 100. The formula can be used to track the prices of both individual commodities and large market listings, and also used to compare the values of different currencies. Balance sheets with comparative financial statements often will include prices of specific stocks at different time periods alongside the percentage change over the same periods of time.
A 52-week high/low is the highest and lowest share price that a stock has traded at during the previous year. Investors and traders consider the 52-week high or low as a crucial factor in determining a given stock’s current value while also predicting future price movements. When a commodity trades within its 52-week price range (the range that exists between the 52-week low and the 52-week high), investors usually show more interest as the price nears either the high or the low.
One of the more popular strategies used by traders is to buy when the price eclipses its 52-week high or to sell when the price drops below its 52-week low. The rationale involved with this strategy says that if the price breaks out either above or below the 52-week range, there is momentum enough to continue the price fluctuation in a positive direction. Gold Reserve Inc. (:GDRZF)’s high over the last year was $4.58 while its low was $2.02.
Beta measures the volatility of a security in comparison to the market as a whole. The tendency of a security’s returns is to respond to swings in the market. For example, a beta of 1 means that the security’s price will move in lockstep with the market. A beta of less than 1 indicates that the security will be less volatile relative to the market. A beta of greater than 1 tells us that the security’s price will be more volatile than the market. Beta is an expression of the tradeoff between maximizing return and minimizing risk. Gold Reserve Inc. (:GDRZF)’s Beta number is 0.38.
Outstanding Shares refers to all stocks currently held by all shareholders, including blocks held by institutional and insider investors, of a given company. Outstanding shares are shown on a company’s balance sheet as “Capital Stock.” The number of shares outstanding is used to calculate key metrics such as a company’s earnings per share (EPS), cash flow per share (CFPS) and its market cap. The number of outstanding shares is not static, as it can fluctuate greatly over time. Gold Reserve Inc. (:GDRZF)’s number of shares outstanding is 95.38m.
The three things that investors will want to look for when picking a penny stock are the underlying business, the financials, and the footnotes.
A company’s underlying business is even more important than it is in exchange-traded stocks because the penny stock world is home to shell companies that are legally incorporated, but lack any business operations. Investors should look for companies with real, sustainable business operations when considering penny stocks.
As with any stock, any given penny stock’s financials are essential for investors. With penny stocks, however, the question is really more about the quality of the financials. If an investor can answer “yes” to the following questions: Do the financials look healthy? Does the company file on time? Who was the auditing firm? Then it’s time to browse the footnotes.
Footnotes are an oft-overlooked part of a company’s filings, yet prove to be extremely important. While it’s possible to get by without reading a large company’s footnotes, if an investor misses the footnotes for a penny stock, it could be damaging. Penny stocks are small companies and, as such, are more prone to things such as related-party transactions and non-GAAP accounting oddities, so the footnotes for penny stock companies should not be overlooked.
Penny stocks are risky and fodder for scammers. Penny stocks can also make you a lot of money. Many investors find that the potential windfalls for penny stocks are worth the inherent risks involved. Penny stocks can deliver an impressive return.
A concern for investors regarding penny stocks is the lack of reporting standards for companies whose stocks trade in the Pink Sheets or on OTCBB. Though OTCBB does require that registered companies stay current with SEC filings, those filings are the bare minimum and below what an exchange-traded company would have to file.
Unfortunately, since companies that are delinquent in submitting their filings to the SEC are still accessible to individual investors, penny stocks can be a treasure trove for dishonest people, which is one of the reasons that the SEC has taken an active role in making sure that the public is protected from dishonest individuals and companies in the penny stock arena. To even sell you a penny stock, brokers are legally required to send out documents outlining the risks of penny stock trading.
Disclaimer: Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.