How to Evaluate Over the Counter Stocks

Investing in the stock market is a lot of fun but it also takes a lot of skill. Investing in the over-the-counter stock market is another beast entirely! Over-the-counter stocks are generally companies that are much much smaller than a regular publicly traded company on the NASDAQ or the New York Stock Exchange. These companies are very thinly traded, meaning you may not be able to buy or sell the quantity you want on any given day.

Because of this, large sways in prices, both up and down can be completely normal and if you aren't willing or able to handle the psychological effect this may have on you, you've got to seriously reconsider investing in this market. But if you think this is the place for you, I've got a few tips to help you evaluate over-the-counter stocks and I'm going to share them with you in this article today.

First of all, the growth potential of the company is the most important consideration you will ever have, single-handedly. The earnings increases for the company should be at least 10% a year on average for the past six years or else you should stay away from the issue.

Next look at the cash, investments, and accounts receivable as well as the materials and inventories for the company. These things should normally be at least twice the size of the liabilities that are due within the next year for the company. This is because smaller companies need a larger cushion to weather all storms.

Next take a look at working capital per share. For over-the-counter companies the working capital per share should be larger than the market value of the stock. For instance, a $12 stock should be backed by a good solid $14 per share in working capital; at least.

Next, the company should be owned by a least 10 institutional investors as reported in the S&P Stock guide. This may be hard for many OTC stocks but it is important nonetheless.

Next look at the balance sheet for the company. It shouldn't show any deferred operating expenses at all.

Next look at who also owns the stock. You want to look for public ownership that is between 500,000 and 1 million shares of stock. A good indicator is that no more than 10% of the company is controlled by a single individual or institution.

Next look at recent dividends or at recent stock splits. What happened after the dividends were issued? Did the price of the stock continued to increase or did it drop? Increase suggests that the company is financially solid and it's investors feel strongly about it. A decrease suggests that insiders are cashing out and running away... which is a horrible sign and a clear indicator to stay away.

Finding a good over-the-counter stock can be a lot of work but at the same time it can be incredibly rewarding because all it takes is a few of these gems to be uncovered in order to make you a lot of money very quickly!

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Mac vs PC Part 1- The Big Difference?

I often get asked the question... What's so special about a Mac, why should I Switch to a Mac, what makes a Mac different?

In this Mac vs PC segment, lets take a look at what's involved in making the "Total Computer Package".

Here is how it's done on a PC:

-Microsoft makes Windows along with select programs, most notoriously MS Office.

-A bunch of other companies design and make the Computers while attempting to conform to Microsoft's current system requirements and hopefully future system requirements so your machine won't be too obsolete.

-Another bunch of companies make up the majority of the rest of the programs for Windows that yet again have to conform to not only Microsoft's requirements but also an ever evolving sea of hardware configurations produced by the same PC Computer companies trying to make Windows compatible PC's.

Here is how Apple does it:

-Apple designs the computer including all hand picked internal hardware.

-The Mac Operating System is built from the ground up by Apple, for Apple computers factoring in current system/sotware requirements and future system/software requirements.

-The majority of pre-installed Applications are Apple's very own, all integrating one with the other, all sharing similarities making the end user experience stable, predictable fun and efficient.

A fitting analogy:
If you where buying a new vehicle, would you prefer that vehicle to be designed top to bottom inside and out with all components tested and retested delivering a finished product that is not only stylish but has performance and reliability to match? Or perhaps you may choose to go with a vehicle that is a conglomeration of miscellaneous bodies, frames, interiors, drive trains, and wiring spliced together producing a product that is not always predictable, stylish or reliable.

I think most reasonable people would choose the vehicle that is well designed and manufactured over the franken-vehicle.

Is it any wonder why so many people are frustrated with their PC computers and are now Switching to Mac or at least taking a long hard look at Switching to Mac? Ad the fact that a Mac makes a great Windows PC to Boot and you have to wonder what's stopping you from getting a Mac?

Maybe the real Big Difference is that people are finally now so much more open to the Mac...

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