One Line
Cheap stocks need a catalyst to start rising and small stocks currently have massive upside potential, but cheapness alone cannot guarantee profitable investments.
Key Points
- Cheapness alone is not enough to make a stock a good investment; a catalyst is needed to ignite its potential.
- Examples of cheap stocks that experienced massive gains due to a catalyst are provided, emphasizing the importance of finding a stock with a catalyst if one wants to invest in small stocks.
- Small stocks are currently undervalued with a price-to-sales ratio at a two-decade low and a price-to-cashflow ratio at a level not seen since the 2008 crisis.
- Chris Wood of RiskHedge recommends considering tiny stocks today for their massive upside potential.
- Valuation matters because a cheap $1 stock holds 10X more upside than the same stock trading for $10.
- RiskHedge offers free research and premium advisories for investors.
Summary
227 word summary
The excerpt is a collection of various sections from the website Riskhedge, including advertisements for free research and premium advisories. However, the main point of the article is that cheapness alone is not enough to make a stock a good investment. A catalyst is needed to ignite its potential. The article provides examples of cheap stocks that experienced massive gains due to a catalyst, such as Rubicon merging with Telaria and Atomera signing a game-changing Phase 4 deal. The article emphasizes the importance of finding a stock with a catalyst if one wants to invest in small stocks, as no valuation metric can predict when a stock will start rising. A cheap stock can gain more than an expensive stock, but it needs a reason to start rising. Valuation matters because a cheap $1 stock holds 10X more upside than the same stock trading for $10. Small stocks are currently very undervalued with a price-to-sales ratio at a two-decade low and a price-to-cashflow ratio at a level not seen since the 2008 crisis. However, cheapness alone cannot make you money and small stocks need a catalyst to go up. Chris Wood of RiskHedge recommends considering tiny stocks today for their massive upside potential. He recently released new research on an opportunity he says is as sure as it gets in the world of investing in small stocks.