We will compare two micro-cap companies in this session of “STOCK SCHOOL”. Today’s idea involves picking a company that has a healthy business model and is practical. This is the most basic of all OUR strategies but can save thousands of dollars and hours of regrets.
COMPANY OPERATIONS (BUSINESS MODELS)
ELAY (eLayaway, Inc.) has been under the radar for quite some time now, today the company cashed out at 0.0008 (a 100% gain for the day). A little closer look shows the stock at 1.5 cents about 9 months ago. The Florida based group specializes in payment/ retail technology. A quick trip to eLayawayMALL .com and you are introduced to some of your favorite products from known retailers and brands. The merchandise is broken down into a customized payment schedule. Sounds Good? Wrong. Several reasons make this stock sour: one, consumers are making a payment on a payment schedule for a product they have not received yet, thus their incentive to pay is diminished. Two, interested parties are paying eLayaway, Inc. processing fees to broker the deal between the customer and the retailer, and not receiving a guarantee on the product ( the site offers no rain checks or product guarantees). Finally, with the availability of in-store credit cards offered by most merchants the business idea of eLayaway is not practical. From a investors standpoint oneMUST consider the most simplest variables about the business. In this case the business model is already a red flag because it isn’t an idea I would invest CAPITAL into. If the business doesn’t seem like it will make money then stay away.
NPWZ (Neah Power Systems, Inc.) has been a favorite for some time now for several reasons. The Washington State based technology developer offers powerful, practical device power solutions; at an affordable price. NPWZ is offering product technology BEYOND its name. This means the product lines and innovations it has made are MAKING a name for the company, it is UNDERVALUED. As a micro-cap investor you want a company that has the potential to connect dots and yield exponential growth. In this case NPWZ is trading at 0.04 a share, with great volume and several other investing fundamentals we will go over in later articles. So with a 0.04 share value matched with the company’s product lines in general make NPWZ a healthy pick. What pushes this company over the edge is that it offers an exclusive line of “buzz bar” products that can power devices in emergency situations or when power isn’t available. This makes NPWZ a power buy because several things can happen to the company’s stock because of its product advancements. It will always be a gamble to put any money into stocks or the micro-cap investment markets, but we can increase our chances of profitability by using several effective investing strategies outlined in our “STOCK SCHOOL”.