HOW TO CHOOSE CORRECT PENNY STOCK

If the company not earning profit .the company is doing loss so don’t look like that company only because you have to do a profitable business. If the company not profitable then direct avoid hat company stock you can never have profit from the loss-making company.

Don’t invest in any stock good has been done if the company is doing loss then the company bank also may you must have seen reliance communication .jay Prakash association is not a company profitable so much stock so that ‘how

We should do stock strictly avoid .if the business not profitable then do not even see the stock such penny become trapped by retail investors by investing in stock and he loses his money in the stock market.

For example, just Yash bank is not earning a profit then the stock of Yash bank will fall more than 90% if you select any penny stock. Then the penny stock company should have a business profit. If the business profit is not there then the company should avoid it. And if the company is viable. Profitable then you should make more search. Doing the company avoids if he is in a loss.

Pledging of share

Pledge to be mean share like we pledge gold and take the lone or take home against loan exactly the same way loan from against bank of stock means pledging of share. This is called the encumbering of share. Then when a share is a pledge become share Coreldraw security. Mean if borrow and iron can sell the lender. Share if able to pay and could sell that and take out this money.

Pledging can be done by both promoters and retail investors promoters when the stock pledge is considered a negative sign. For that company because it meant that promoters are taking the stock’s against the loan for a purpose so the company’s final conditions are not good. This loan he can also apply for any expansions of the company either he may have any personal expansions of this loan is applicating a meaning full expansions utilizing.

So it can also be a positive sign. But in that case, also the amount of pledge of share should be less. When the stock is pledge banks look at the price of share a loan full value but never gives the loan. Bank of full value as bank keep holding. Like 15% and 20% because the share price is less than in that case bank will come in problem so the bank wants to be saved from its side. If the share price is reduced after giving a loan than the promoter asks for more shares or else. Can demand as the amount to cover shot form if promoters are not able to loan banks. Can withdrawal there money by sell.

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Pledging of share general is considered a negative sign. It indicates that the company is unable to operate. And the company has been on to share the pledge to run, so whenever news of pledging to share by promoters fall in the market. Investors thing promoters are playing mean company financial condition is not good. Investors start sharing sales and prices are.

Pledge the money which is coming will be used for any expansion than positive sign can also be but in that case, also you will have research on how the companies. General financial conditions are and how the money is utilized and there more of a case. Pledging amount is more than its negative sign than no matters the money is also utilized. The company expansion as we expect liability and its debt will also below. That is why investors have a significant loss that is why the place of share is a danger ring to investor so as far as possible the company whose amount of share of a pledge is high you stay away from the company.

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