Value Stock Picks

Value stocks can pay off if you pick carefully.  For the average investor hunting for low-priced value stocks can require exhaustive research and countless hours of investigative work. And buyer beware: You could wind up in some dimly lit trading room staring down at a stock that’s deader than last call at a southern baptist ministry convention. Just to define our terms, a low-priced stock is one that sells for $10 or less. We’re not talking about penny stocks, which sell for $1 or less and can be deadlier than the kool-aid at Jonestown.

One attraction of low-priced stocks, of course, is that they are inexpensive. You can pick up 100 shares of a $5 stock for just $500. If you wanted to buy 100 shares of Google, you’d need about $50,000.

But the main allure of low-priced stocks is that they usually aren’t followed by the average Wall Street mope, which means you can sometimes pick up overlooked bargains. Many big institutional investors, for example, won’t touch a stock that sells for less than $10, on the assumption that it’s on its way to zero. And stocks that sell below $5 aren’t marginable, which means you can’t borrow to buy them — and that rule eliminates some investors as well.

Your first job is to get some protection. A stock that sells for $3 can go to zero faster than a drummer can get to a pawnshop. One way to get some muscle: Look for stocks of companies with low or no debt and plenty of cash. High debt is one of the biggest killers of small companies: If rates go up or business goes down, the bank will own your company, and your stock will become toilet paper.

Value investors follow a different path. They believe that the broader stock market always overreacts to news about a company. The Stocknod neural network uses a proprietary software scan that seeks out value stock picks of formerly hot stocks that have stumbled and whose share prices are at bargain levels. Value stock picks with eye popping fundamentals and low price to book ratios.

Value investing has proven to be a successful investment strategy for faithful investors: Buying low PE ratio stocks, low price-to-cash-flow ratio stocks, or low price-to-book ratio stocks that insure positive gains regardless of what the rest of the market is doing. Stocknod’s value stock picks scan consistently uncovers the value stocks poised to outperform. Value stock’s have a conservative risk profile with low portfolio turnover and steady sure fire gains.

If you are looking for value stocks that pay dividends then try the StockNnod neural network scanned stock picks ned st that pinpoints value stocks poised to outperform.