Why Avoiding Penny Stocks Or Low Single Digit Stocks That Have A Long History Of Large Loses Is Such A Good Idea

Now here is one excellent piece of advice for investors  investing in penny stocks and low single digit stocks. Watch out for companies that have reported very large losses quarter after quarter this is usually a very bad sign.check out the news releasees on the company on yahoo finance  or google finance. If a company is losing huge amounts of money quarter after  quarter theirs bound to be major turmoil at the company. If the news release reads like this jmp reports a huge loss in forth quarter on sharply declining same store sales. jmp plans a major restructuring closing up to ten percent of their stores. jmp also plans on closing two distribution centers will take major charge in first quarter. jmp is out of compliance with listing requirements on the new york stock exchange. Chief financial officer resigns. jmp is out of compliance with loan covenants on revolving line of credit with  z bank. jmp attempting loan modifications to come back into compliance with loan covenant violations with z bank so far unsuccessful. z bank reduces loan available on revolving line of credit with jmp . from fifty million to twentyfive million dollars. jmp stock plunges from 2 dollars to 1 dollar  after Standard and poors downgrades jmp credit rating on ten years notes from B- to -C. jmp suspends dividend.. {jmp exploring strategic alternatives}This could mean the company is planning to file bankruptcy or selling the company if  it can find a buyer. Not a pretty picture As you can see from reading the news releases on the company their in very serious trouble to say the least. You can get the feeling that this company could go out of business or file bankruptcy. Always read the news releases on a company you plan on buying stock in before you buy the stock. Do not be alarmed if theirs some negative news releases on a stock most stocks trading below 5 dollars or under 1 dollar will have some negative news releases from time to time what your really looking for or really want to watch out for are signs that the company is in very serious trouble.


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