Tag Archives: Trade Tip

Solars will be PennyStocks in 2012???

It was early 2008, and DRYS (Dryships) was topping $110 per share. DRYS was a dry bulk shipping company, and with shipping rates at all-time highs, they were reaping the rewards. DRYS was one of many bulk shippers trading at high multiples based on it’s earnings growth potential. By fall 2008 dry bulk shipping rates declined nearly 90% in the market downturn. DRYS went from high flying stock, to Pennystock in a staggering decline over a very short period of time. DRYS and the Dry Bulk shippers have never recovered, and most trade under $5(PennyStock Status). Demand has improved, but dilution from fund raising has caused irreparable damage to these once darling stocks.

BDI Index
BDI Index

Fast Forward to 2011, and we have a similar sector undergoing the same struggles. Solar manufacturers have come under severe selling pressure in 2011, on surplus supply and lower demand concerns, a lack of government subsidies that was growing demand in Italy and German,  as well as an overall weakening global economy. There is also a feeling that China is helping to flood the market with low cost panels, exacerbating the situation. One may look at former market leaders of this sector like these once $100+ stocks FSLR and STP, as undervalued based on the severe sell-off. But based on the current and future market conditions, one has to think these companies are in trouble and their stocks will continue to be under pressure from sellers and short sellers. Only time will tell, but my prediction is that all of the solar companies will be pennystocks in 2012.

Stock Options – Big Gains Without All The Drama

Stock Options are likely to lure those penny stock traders who have been staring at some very boring action lately.  Penny stocks seem to be dieing a very slow death.  Stock options, however, are a live and well.  Stock options offer the potential for some amazing returns.  Just this past week we had some amazing moves higher including X calls that surged from $.03 to $1.83 on Friday.  A $300 investment could have netted you $18,300.  That is the allure of stock options and exactly why penny stock traders are leaving their moribund market for stock options.  What better place to learn, chat, and trade options than right here at option millionaires?