They're usually small companies, which are largely ignored by the big money investors…
Yet they demonstrate huge growth potential, generate consistent profits and in many cases, pay attractive income.
I call them “Below-the-Radar” stocks.
And when investors finally take notice of them, their share prices can soar 50%, 100%, even 200% in a short period.
Here's one below-the-ra... ››› more
Right now the South African repo rate sits at a rock bottom 3.5% interest.
The interest I'm getting on cash in my brokerage account right now is a mere 2.18%.
Simply put - with interest rates this low you HAVE to look elsewhere for yield.
And it so happens that there are a handful of JSE listed penny stocks that are paying dividends up to double and even TRIPLE the current interest rat... ››› more
Small caps and penny stocks have soared in the past year.
The JSE's Small Cap Index is up 58.61% in the past 12 months alone!
A lot of investors are asking me about great small companies to buy and hold for great returns like these in the coming year, and beyond.
But it's important not to throw darts at a wall and pick a lottery ticket. To capitalize on the strength and upside of small... ››› more
Like the tourism and hospitality sectors, construction has been hard hit by the Covid-19 pandemic.
As a result, the construction sector saw a 30% collapse in the second quarter of 2020.
But it looks like the construction sector has started to see a recovery at last. In 2020, the Afrimat Construction Index dropped to below 70 - from a 2019 average of just above 120. Indicating a huge drop i... ››› more
Following last year's lockdowns, and the protracted economic pressure on businesses due to the Covid-19 pandemic - South Africa's economy is in recession.
Unemployment is up.
And there's a lot of suffering around.
But with every crisis comes opportunity…
And for astute stock pickers the opportunity has never been better…
Why, just yesterday one of my favourite stocks fo... ››› more
Small cap stocks have had a tough time in recent years. While the underlying businesses in many cases did really well - their share prices didn't.
Between March 2016 and March 2020 the Small Cap Index was down 44%.
In the last 6 months though, the Small Cap Index is up 25%, erasing a great portion of its past losses.
And thus far 2021 looks like a scorcher for small companies.
In t... ››› more
Between May 2015 and May 2018, the JSE Small Cap Index went nowhere. And between May 2018 and May 2020 it dropped 44.68%.
Since then however the Small Cap Index is up 29%.
That's a huge rally in just six months.
But here's the thing. It's not over yet. The small companies in this index aren't even back to the levels they traded, at the start of 2020. Never mind their 2018 highs…
... ››› more
Have you ever wanted to kick yourself because you sold a stock that just kept going up and up?
It happens to the best of us…
Earlier this year, at Red Hot Penny Shares it happened with DRD Gold.
We bought the stock at 265c in June 2019 and sold it at 1577c in May 2020.
Adding in the dividends we received I was very happy with a 519.62% gain.
A mere 2 months later the stock hi... ››› more
Property stocks on the JSE have had an atrocious year.
Right now, they're still around 46% lower than they were one year ago.
We all know that many landlords, especially in the retail space, had empty shops and tenants that couldn't pay during the hard lockdown…
But the property index has started a turnaround. Since 1 November 2020 the SA Listed Property Index (SAPY) is up 15.81%.
... ››› more
Financial advisors hate penny stocks… Fund managers barely ever invest in them.
But if there's one thing that these tiny shares have shown over the years it's that they've got huge upside potential.
In 2020 alone Red Hot Penny Shares reader have banked a 274% gain on Pan African Resources, 519% on DRD Gold and 111% on Quantum Food Holdings…
Most investors can only dream of these kind ... ››› more
Benjamin Graham' value investing strategy is widely believed to be the most successful of all time.
And while many of you may not know much about Ben Graham, I'm sure all of you have heard of Warren Buffett and are keenly aware of his success as an investor.
What you may not realise is Warren Buffett was a student of Benjamin Graham and he bases his success as a stock picker on what he l... ››› more
Early on in the COVID-19 pandemic there was a ‘nerdy' accounting joke doing the rounds saying that soon we'd see EBITDAC - Earnings before interest, tax, depreciation, amortisation and corona.
While there's no ‘official' accounting term like that - companies results do show the effects, the pandemic has had on them. And many are opting to call it ‘once-off expenses.
Suddenly the ner... ››› more
Almost everything sold off big earlier this year. But after that, one US sector was the first to hit new highs again.
And it did so in April.
Since then, this sector's uptrend has been accelerating.
In fact, stocks in this sector continue to shatter old "new high" records almost daily. They've been on an impressive rally - up more than 45% since bottoming in March.
Despite this… ... ››› more
2020 has been one hell of a year. Coronavirus has ravaged most markets and yet certain stock markets have hit record highs.
Unbelievable!
Whatever the reason for the run up, the obvious divergence of share prices from the underlying reality seems to be all too apparent to professional investors.
So, is it time for you to hit the big red button? Is now the time to sell everything?
... ››› more
The global stock market indices continue to rally, with a handful of companies contributing to the positive performance since the march lows.
And while the anecdote says, “a rising tide lifts all boats”, this isn't the case. Many sectors in the market are just bobbing up and down and not moving decidedly higher. These overlooked companies offer value, still 20% or more below their pre Covi... ››› more
Everyone has favourites. A favourite food. A favourite colour. A favourite vacation spot. And, even though you'll never admit it, some people even have a favourite child.
For me, this pertains to the world of stocks too.
So, what is that one stock? The one I just have to hold no matter what anyone says?
Well, it's a company that, for the longest time, operated in the shadows of its mai... ››› more
While there have been epidemics in our lifetime, none have had the level of response from government's that we're now seeing.
And while it's now become clear that we'll have to deal with lockdown measures for longer than many initially thought - we're also far enough through this crisis to start looking ahead.
How will our economy recover, will it be quick or slow? Will we see inflatio... ››› more
Mark Twain wasn't wrong when he said:
“History doesn't repeat itself, but it often rhymes.”
The more things change, the more they stay the same - this is true when it comes to the fear, greed and herd mentality in the markets... If you've been investing long enough you will see the same patterns on repeat.
Just think back to the 2007/2008 financial crisis…
I remember buying ... ››› more
When do you sell a dividend stock?
Some investors love dividend stocks so much they will never sell.
But if your goal is to generate a consistent growing income, knowing when to sell can be tricky.
After all dividend stock prices can fall and dividends can get cut… so what then?
Here are three warning signs to look out for to know when to sell.
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Happy New Year and welcome to 2020.
The last time we entered a new decade, the world was recovering from the 08/09 Financial Crisis.
Since then, the US stock market has repeatedly hit new all-time highs (despite some bumps in the road).
And while we know the turning point in the cycle could be around the corner… we have to remember…
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