The Aleph Blog » Blog Archive » Another Penny Stock to Avoid

Another Penny Stock to Avoid

I received a “newsletter” today from Legendary Stocks.  Now with a name like “Legendary Stocks,” you would think the companies would have a long prior existence.  But the stock mentioned I can’t even find on EDGAR, which is different from all the other penny stocks I have analyzed.

As with all the rest, this doesn’t smell good.  This is a company with small revenues, negative earnings, and negative book value.  Though it trades in the US under the ticker IMNG, I can’t find much data on it.  Even their website has no investor data.  That is abnormal.

Oh, this was a part of Legendary Stocks, 5-point type size  disclaimer:

Legendary stocks has been contracted to receive and manage budget of eight hundred thousand dollars by a third party prime star communications agency for coverage of iMing. In addition, The Legendary stocks expects to receive new subscriber revenue as a result of this advertising effort. [Emphasis mine]

Leaving aside the concept that many Chinese stocks listed in the US are scams, where assets and earnings are misrepresented, there is little independent data to work with here.

But given the 93% decay rate on promoted penny stocks, I predict that by my next birthday, 12/5/2013, IMNG will trade for less than 10 cents a share, adjusted for reverse splits from the present.

I say to all who hear me: avoid promoted stocks.  Buy what you have analyzed: don’t trust what others think, even me.






bloggerbuzzdeliciousdiggfacebookgooglelinkedinmyspacenetvibesnewsvineredditslashdotstumbleupontechnoratitwitteryahoo
Portfolio Management, Quantitative Methods, Speculation, Stocks | RSS 2.0 |

2 Responses to Another Penny Stock to Avoid

  1. Greg says:

    I got the same offer in the mail earlier this week. Did you read the other fine print that the promoter doesn’t actually trade any of his own ideas? Would you eat in a restaurant where the chef announces that he doesn’t eat any of his own slop?

    On a more happy note, at least the penny promoters are offsetting a tiny piece of the Post Office’s on-going losses.

  2. cold.as.ice says:

    > don’t trust what others think, even me.

    The “even me” is reason #28 why I am glad to be a client of yours.

    As to penny stock, “a fool and his money are soon parted”.

Disclaimer


David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.


Also, though David runs Aleph Investments, LLC, this blog is not a part of that business. This blog exists to educate investors, and give something back. It is not intended as advertisement for Aleph Investments; David is not soliciting business through it. When David, or a client of David's has an interest in a security mentioned, full disclosure will be given, as has been past practice for all that David does on the web. Disclosure is the breakfast of champions.


Additionally, David may occasionally write about accounting, actuarial, insurance, and tax topics, but nothing written here, at RealMoney, or anywhere else is meant to be formal "advice" in those areas. Consult a reputable professional in those areas to get personal, tailored advice that meets the specialized needs that David can have no knowledge of.

 Subscribe in a reader

 Subscribe in a reader (comments)

Subscribe to RSS Feed

Enter your Email


Preview | Powered by FeedBlitz

Seeking Alpha Certified

Top markets blogs award

The Aleph Blog

Top markets blogs

InstantBull.com: Bull, Boards & Blogs

Blog Directory - Blogged

IStockAnalyst

Benzinga.com supporter

All Economists Contributor

Business Finance Blogs
OnToplist is optimized by SEO
Add blog to our blog directory.

Page optimized by WP Minify WordPress Plugin