Tuesday Stocks To Watch - SDIR, PRMO, NCST, POWN

SDIR this $.0004 stock looks like its starting to awaken. I could see SDIR posting a short term 300%+ gain from current prices.

PRMO some may view today's action as a disappointment as the stock did not soar 100% or better. I, on the other hand, think today's trading action gives PRMO a better chance at big gains down the road. The stock is under accumulation and these triple zero stocks can take days, even weeks to develop. If making 100%+ trades was that easy you wouldn't be here reading my blog. These things can take time, and more often than not, most people will sell without ever profiting from the big breakout.

NCST I had this stock on my list for this weekend. It did not disappoint soaring over 200%. This remains a stock to watch tomorrow.
POWN at $.30 I think this stock could double and then triple in the medium term. There are a lot of good things going on with POWN and ultimately I think the shareholders will be the prime beneficiary.

Global Giants Hiding on the Pink Sheets

By DAN BURROWS

With few exceptions, investors should run screaming from any stock quoted on the Pink Sheets. This over-the-counter electronic quotation system (which used to print share prices on pink sheets of paper) has no listing or regulatory requirements. That's helped make it a haven for companies that are thinly traded or closely held, perhaps in bankruptcy, and, of course, penny-stock pump-and-dump frauds.

And that's being charitable. The Securities and Exchange Commission, which has no oversight of Pink Sheets stocks, warns investors that companies listed there can be "among the most risky investments." So it comes as something of a surprise that some of the biggest, best-known foreign firms chose to list on the Pink Sheets exclusively in the the U.S.

Take Nestle (NSRGY), for example, the world's largest food and beverage company. Sure, you could buy shares on Nestle's home exchange, but then you'd be subject to currency risk converting dollars to Swiss francs. So that leaves you with Nestle American Depositary Receipts (or ADRs, a vehicle foreign companies use to trade in the U.S.). Nestle purposely eschews listing its ADR on a major exchange such as the Nasdaq because it would have to prepare two sets of financial statements -- one in accordance with international standards and another adhering to U.S. standards.

The bottom line is that the absence of regulatory requirements in the over-the-counter market makes life easier and cheaper for Nestle and scores of other legitimate companies -- even as that lack of oversight provides a breeding ground for some seriously sketchy equities.

Using data from Capital IQ and Thomson Reuters, we screened for well-known, large-cap foreign companies (minimum market cap of $50 billion) listed only on the Pink Sheets in the U.S. that are outperforming the S&P 500 so far this year. We also looked at trailing price-earnings ratios to see whether these stocks look cheap or expensive relative to the broader market.

Here, then, are ten blue chips on the Pink Sheets that may be worth further scrutiny for your portfolio.

Industrial and Commercial Bank of China (IDCBY)
Market Cap: $282 billion
2010 Price Performance: +17% (since Jan. 20)
+/- S&P 500: +8%
Shares in the world's biggest bank by market cap offer a 30% discount to the broader market on a trailing earnings basis.

China Construction Bank (CICHY)
Market Cap: $249 billion
2010 Price Performance: +24%
+/- S&P 500: +15
Shares in the world's second biggest bank by market cap trade at a 25% discount to the broader market by trailing earnings.

Nestle (NSRGY)
Market Cap: $192 billion
2010 Price Performance: +21%
+/- S&P 500: +12
Trading in-line with the S&P 500 on a trailing earnings basis, shares in the world's biggest food and beverage company don't look like a deep bargain, but they hardly look pricey, either.

LVMH Moet Hennessy Louis Vuitton (LVMHF)
Market Cap: $78 billion
2010 Price Performance: +36%
+/- S&P 500: +27%
Shares in the French luxury powerhouse look richly priced, trading at a sevenfold premium to the S&P 500, but then the recovery in high-end discretionary spending appears to be accelerating.

Daimler (DDAIF)
Market Cap: $74 billion
2010 Price Performance: +28%
+/- S&P 500: +19%
Best-known for manufacturing the Mercedes-Benz, shares in the German automaker offer a modest 6% discount to the broader market.

BASF (BASFY)
Market Cap: $71 billion
2010 Price Performance: +29%
+/- S&P 500: +20%
Shares in the Germany's answer to DuPont offers a compelling 26% discount to the broader market on a trailing earnings basis.

Xstrata (XSRAY)
Market Cap: $63 billion
2010 Price Performance: +16% (since Jan. 5)
+/- S&P 500: +7%
Shares in the Swiss mining giant trade at nearly a 50% premium to the broader market by trailing earnings, but then the global commodities boom shows no signs of slowing down.

Anglo American (AAUKY)
Market Cap: $57 billion
2010 Price Performance: +11%
+/- S&P 500: +2%
Another play on the global commodities boom, the British mining company's stock trades at a whopping 100% premium to the S&P 500 on a trailing earnings basis.

Hennes & Mauritz (HNNMY)
Market Cap: $56 billion
2010 Price Performance: +25%
+/- S&P 500: +16%
The Swedish fashion retailer's shares look marked down, sporting a discount of more than 100% to the broader market by trailing earnings.

SABMiller (SBMRY)
Market Cap: $51 billion
2010 Price Performance: +13%
+/- S&P 500: +4%
Shares in the British beer company fetch a pricey 53% premium to the broader market by trailing earnings.

See full article from DailyFinance: http://srph.it/agly5h

Stocks To Research This Weekend - PRMO, NSCT, UWRL, STAU

PRMO investors are starting to digest the annual report from earlier this week and realize the true potential of this stock. Gold is trading near all-time highs and I suspect PRMO is ready to trade near and through its highs as well. The accumulation is evident and the potential for price gains, at this point, is great. Just as the price of gold has no limit, PRMO has no set target. All we know is that this stock is just starting to get going. It could turn into one of those memorable stocks people will be talking about in the years ahead.

NSCT an 8k filing mid-day vaulted this stock up several thousand percent. I am curious to see if the gains can continue on monday. This stock should be a fun one to trade going forward.

UWRL We are nearing the rumored skull and bones removal date. It seems investors are front-running this rumour and rightfully so.  As I have said all along, if UWRL gets its act together, finalizes all the mergers it has said it was going to do, then this is a $.006 or better stock. Right now its nothing more than a momentum traders stock.

STAU market maker RAFF has been hammering the bid since appearing on the ask when STAU was at $.0016. Its pretty easy to see that RAFF is PENA's little brother. RAFF and PENA have no problem dumping shares on what was a healthy and promising rally. Dilution in this market can be frustrating, but it is tradeable. When RAFF leaves the ask and joins his brother at $1 a share, then STAU will resume its ascent. Until that time, I would just watch.

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OTC 101 — Part 4 - Advanced Concepts

Liquidity
From a trading perspective, liquidity is the ability of a security to be bought or sold without causing a significant movement in the price of the security. Liquid securities may be bought and sold in large numbers without a dramatic movement in the price of the security. The opposite is true for illiquid securities. Liquidity depends on a number of forces including supply and demand, price transparency, trading history, market venue, market participants and freely tradeable shares (public float).
The Spread
“The Spread” is a term that applies to all markets and represents the difference between the highest bid price and the lowest ask price. For example if “the bid” is $10.00 and “the ask” is $11.00, then the spread is $1.00. The spread is one of the ways that broker-dealers, specifically market makers (a type of broker-dealer that provides liquidity by quoting and trading both sides of the market), make money. In an ideal world, market makers want to buy at the bid price and sell at the ask price. This scenario allows them to have very little risk and make “the spread” on each share transacted. Unfortunately for market makers, this scenario is not extremely common due to price volatility – movements in the price of a security.
Volatility makes it possible for market makers to lose money providing liquidity to both sides of the market. Security purchases at the bid price can become unprofitable if the price quickly or significantly moves lower. Therefore, spreads tend to be wider (larger) in very volatile or illiquid (not easily tradeable) securities.
Spreads are often the result of the amount of information available on a security. This information may come in the form of past trading data, news or company financials. If very little information is available on a security, spreads may be very large because the market maker does not want to be caught off guard by a better-informed investor. Conversely, active securities with current disclosure tend to have tighter spreads because market makers believe they have sufficient knowledge of the company and the security to buy and sell with confidence.
OTC investors are wise to pay attention to the spread in OTC securities.
Arbitrage
Arbitrage is the trading strategy that takes advantage of the price differential between two or more markets for the same underlying asset. Investors and traders profit from the price differential by buying at the cheaper price and selling at the higher price or vice versa. In liquid markets, arbitrage is a short-term strategy because traders quickly recognize the imbalance and correct their prices.
The large number of American Depositary Receipts (ADRs) and Foreign Ordinaries that trade in the OTC market (e.g., Roche – RHHBY, adidas – ADDYY) make price imbalance a concern for OTC traders and investors. ADRs represent a set ratio of home market shares; thus, movement in the home market price and foreign exchange considerations will directly affect the price of the ADR. Foreign Ordinaries should theoretically mirror home market trading once currency rates are considered.
ADR and Foreign Ordinary investors should be aware of the home market symbol, venue, and trading patterns, as well as current foreign exchange considerations.
Short Selling
Short selling is a trading strategy where an investor, believing that a security is over-valued, borrows (from a broker-dealer or institutional investor) and sells a security and then repurchases and returns (to the broker-dealer or institutional investor) the security at a lower price. The difference between the sale price and the purchase price is the investor’s profit.
Short selling is a valid trading strategy; however, there are two important points that investors must remember:
Short selling carries with it unlimited risk because the purchase price of a security can rise to any price point. Conversely, long investors (buyers) may only lose the amount invested – if, for example, the security price drops to zero.
Short sellers are subject to price manipulation schemes – or short squeezes. In a short squeeze, traders believing that there are a lot of short sellers begin buying shares to force the price and the short sellers losses higher. These traders hope that the short sellers will be forced to buy pushing the price even higher at which point they can sell their shares at a profit. Short squeezes are easier to execute in illiquid securities.
Some brokerage houses do not allow the shorting of OTC securities due to the lack of liquidity or low market prices in many issues. If short selling is allowed, investors must be very careful when employing this strategy.

http://www.otcmarkets.com/learn/advanced-concepts

Friday's Stocks To Watch - PRMO, WAMUQ, UWRL, LKEN

PRMO this stock is getting ever so close to breaking out higher. This gold stock is starting to gain interest and could see a rapid ascent as the accumulation continues.

WAMUQ we know this stock over the last few years has rewarded investors big nice gains. We could be looking at a little run right here.

UWRL for those of you who think I have given up on UWRL, I have not. Actually it's UWRL that has given up on us by prolonging their promises. However I remain confident that when/if the company gets things straightened out, this stock will post a significant run.

LKEN those of you who saw my twitter yesterday were sitting on 100% gains today, before LKEN pulled back to $.001. I think tomorrow is a big day for this stock. I'd like to see it close higher to confirm that a new rally has begun.

Chart of The Day - SAEI