I was wondering if anyone could help me out in valuing penny stocks.
How do you decide what a 'fair' price is for a penny stock?
I have seen previos values calcualted as
value =(yearly revenue/# outstanding shares)*industry multiplier.
What are some common multipliers for pink sheets?
Would appreciate any thoughts anyone may have here.
Thank you
Posted by stockvaper on :
Balder, I think you're pretty close. I look for a company's filed SEC Income statements. I will use EPS (Net Income / # O/S shares) and then multiply this * Ind. Muliplier. This works for me. I look for stocks that are extremely undervalued based on earnings (net income) and future potential. I've found that the PPS will eventually catch up to the above formula. Sometimes it takes a year, but it always catches up. Good luck and good hunting.