This is a channel to outline the types of investment's we are looking for at Trade Club and hopefully answer some frequently asked questions
First Off the disclosure: Investing in the stocks discussed on Trade Club comes with inherent risk. Do your own DD and make sure what you invest your money into meets your risk profile. Assume that the moderators, influencers, and members of Trade Club have long positions in the tickers being posted about and talked about on any of the Trade Club forums/platforms.
Simply Stated Trade Club is looking for stocks that we believe are undervalued by a significant margin (>30%). These consist of SPACs, low market cap companies, companies that have new management and are undergoing a turn-around, Covid-19 Recovery plays, Sector Rotation and Seasonal Rotation, and yes Short Squeezes.
The size of our group will play a big factor in the size of the companies that we will be screening for. Primarily we will be looking at exchange traded stocks (not OTC) that are nanocap, microcap, or smallcap growth stocks.
Market Cap and Float Size These would be stocks with a Market Cap between $5M and $20M that appear to be trading at a discount to previous prices. First we will consider the Float Size of the stock.
Current Ownership. Then we will look at the Insider Ownership, whether the Insider's seem bullish on their own company and Institutional Ownership Levels. Are there any recent Insider Purchases or Sales of their own Stock? Has there been a change in management? Remember the CEO has the ultimate insight to the company. If the CEO and Insider's are buying they probably think the stock is trading at a discount. Does the company have a stock buy back plan in place? At what price are they buying back company stock? When is the last time the company bought it's own stock? Can we purchase at a price lower than the company is buying back it's own stock?
Short Float and Short Ratio. A Stock should have a Short Float of at least 25% to be considered as a Short Squeeze candidate. A Stock with a Short Ratio > 8 would indicate that shorts are less likely to cover and may compete with each other to exit their positions meaning they will be buying at the higher prices. However a higher short ratio may also mean that the stock is less liquid in terms of daily volume. It's important to note that stocks that meet these criteria may have a large outstanding float and it may take some time for the general market to accumulate and hold that float. Therefore as an individual investor it may be beneficial to select less stringent criteria and look for low total float outstanding. Check these links for some additional information:
Company Filings Read the company's 10-K and 10-Q Filings and any Investor Relations materials from the company. This is worth repeating... Read the company's 10-K and 10-Q Filings and any Investor Relations materials from the company. This is where the company will explain why they had a down year and what steps they are taking to move forward. Did they have a big contract that got delayed and pushed out to next quarter? Where they impacted by COVID? Look at the company materials.
Publicly Available Forecasting and Analyst Coverages What is being said about this in the news and analyst forecasting? What does coverage from the major outlets say about 1 Year Price Targets? What is the upside based on analyst consensus estimates versus what the stock is trading at now? Based on the Mosaic of information gathered from above, do we believe the company has a high potential to beat those forecasts?
Sector Rotation and Seasonal Rotation For example Retail Outlets tend to make the majority of their profits during the Christmas Season. Knowing that if a Retail Outlet is trading at a discount in July would it make sense to buy and hold until December/January? Market Sentiment often changes as well for various sectors. Is one sector out of favor right now? What is the best stock in that sector is is oversold/undervalued? Can we purchase at a discount and wait for it to come into favor? As Charlie Munger told Warren Buffett "Buy Wonderful Businesses at Fair Prices".
The above are suggestions for analyzing a stock and proposing it to become a main discussion thread on TC Discord. https://discord.gg/azRJBQXTzv
You are welcome to keep coming back here to see new content. However, a better option is to join the discussion on discord.
What is Trade Club?
Trade Club is a collective of like minded individual investors looking to share investment ideas and information.
How can I join the discussion?
Join Trade Club on Discord: https://discord.gg/azRJBQXTzv
Follow Trade Club on Twitter: https://twitter.com/TradeClub4
Join Trade Club on StockTwits: https://stocktwits.com/r/TradeClub4/
How often will the Ticker Channels Change?
Tickers will be changed when there is a consensus that the stock has reached a fair value.
How does a ticker get it's own channel?
Trade Club Moderator's and Influencer's (Senior Members) will monitor the chat feeds and if a particular ticker is gaining traction in the general discussion it will be considered for addition of it's own channel. There must be supporting due diligence and overwhelming group support before a ticker will be considered for its own channel. If multiple tickers are up for debate a vote will be taken amongst the Influencers. The number of tickers with their own specific channel will remain small by design (the current limit is 2).
How do I become an influencer?
Provide meaningful commentary in the discussion boards and get yourself noticed. Preparing and sharing due diligence is the best way to do this.
What is the Time Horizon or Target Price?
Trade club does not provide an official time horizon or target price. Trade Club does promote the sharing of due diligence and individuals opinions. Each individual investor should set their own time horizon and target price and perform their own due diligence. Ask around in that particular ticker channel to see if your anticipated time frame and target price match that of other investors.
What is the moderator-chat? Why can't I view it?
The moderator-chat is a place for the moderator's to communicate with one another. Generally about housekeeping business such as discord settings, reddit page updates, twitter account settings, etc.. trust me it is boring stuff.
What is the influencer-chat channel? Why can't I view it?
The influencer-chat channel is a private channel for those who have earned influencer status. This is a place for the Influencer's to direct the mods on how they want their community to operate. The good news is you can become an influencer by adding meaningful comments in the other channels.
Copyright © 2021 Trade Club - All Rights Reserved. This is not Financial Advice. Trade Club is a loosely organized group of Individual Investors who like to discuss stocks for educational and entertainment purposes.
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