Everyone that trades in the stock market is aware that microcap stocks are more susceptible to frauds and swindlers because they are less regulated than other stocks, and often are not required to file their financials with the SEC. </p>
There are a number of ways to take advantage of unsuspecting traders, but knowing what those are and being aware that they are possible is one of the best ways to protect yourself. Check out these devious practices: </p>
An overview of March earnings for several microcap stocks:
APNC - Earnings increase by 155% YoY, on the back of a 69% increase in the first quarter. Already earned more in the first 6 months than the entire year in 2010. Still reviewing strategic alternatives to unlock shareholder value
Sparton Corp (SPA) reported a small decrease in sales for the second quarter of fiscal 2011. In the midst of a dramatic turnaround, the company has focused on removing unprofitable contracts, leading to increased margins across the board.
Two new acquisitions should help boost the sales figure going forward and the backlog has increased for 5 consecutive quarters.
A Journey Through the Pink Sheets – 3,698 Stocks Later
However, we have all heard this boom bust story regarding China before. Investors may see not hot penny stocks like returns in Chinese stocks, but history has shown us that it’s usually near the bottom when the media is calling for a crash. We are not saying to take a contrarian attitude and go long Chinese equities, but take the bad news with a grain of salt.