Today there is a lot of shiny object syndrome in the investment world. Meme stocks and even some highly questionable cryptocurrencies are separating investors from their hard-earned dollars at a faster rate than their value warrants. Yet, even with all the money pouring into Webull and Robinhood, OTC Market stocks are a fantastic investment opportunity. Finding these hidden gems is part of the homework necessary to ensure the buy is suitable for your portfolio.
OTC stocks or over-the-counter stocks are still an opportunity to turn sizeable profits. Many emerging growth companies are in a position to develop into hot commodities. They climb the rungs towards the NASDAQ, NYSE, and global exposure. Investing small amounts in a way that helps limit losses can still turn to substantial gains.
Some of the unique benefits to the OTC Market include:
- Ability to buy non-standard quantities of shares
- Getting in on the ground floor of companies that are ready to break
- Making purchases at low prices allows for a high volume of shares
- Less stringent listing requirements to enable budding companies to make headway in the market
- The ability to invest in the early stage means prices that are not going to come around again as the company ascends into the global market
Get to Know the OTC Market
The OTC Market is home to companies that do not yet qualify or have decided not to submit to the stringent qualification standards of the open market. However, these companies still pay for OTC Market services and are arranged in different tiers.
The Expert Market is for brokers-dealers who want to publish unsolicited quotes representing limited orders from institutional and retail investors. It is a private market restricted from the public and carries restrictions around issuer requirements, security attributes, investor accreditation, and even suitability risks.
OTC Pink, or the Pink Open Market, is available to companies with a minimum of 1 million outstanding shares. These are the most speculative OTC Market Group platforms, and they do not carry the same degree of disclosure requirements as those listed on major exchanges. For this reason, you will not see Robinhood or Webull trade OTC stocks from on the Pink Open Market. Instead, these are also traded directly with dealers.
The OTCQB is the mid-tier equity market, and its focus is on emerging companies in the markets. Investors can find small companies with massive ambitions in this market and rising profits with minimal initial investments in this space. These stocks submit to an annual verification, adhere to minimum reporting standards, and must also pass a bid test.
Waiting for a company to IPO before turning profits has left big money investors standing with the inside players. However, investors can still find small companies on the OTCQB market carving out their footprint in the landscape.
OTCQX is the premier tier of the OTC Market. These stocks meet even more stringent requirements than the other tiers and are subject to SEC regulation. It is also known as the OTCQX Best Market, and it follows high standards that improve transparency. It is for companies that already list on qualified international stock exchanges.
Multinational companies that are seeking U.S. investors can appear on the OTCQX market. Companies recognized the importance of having a U.S. market to trade their securities, and the OTCQX was the answer. Companies need to provide an introductory letter from an approved OTCQX sponsor for listing approval.
Descriptions of a few of the gems on the OTC Market are in our next segment. There is still time to learn these stocks and make genuine gains, as they are ready to run. However, knowing where to find them and what to look for is crucial before their exposure turns them into household names that carry household price tags!
Hidden Gems of the OTC Market
EDXC – Endexx Corp.
Endexx Corp (stock symbol $EDXC) has a unique position in the plant-based nutraceutical market. As the CBD-based product market expands, these share prices will not always stay in their current range. Founded in 1997, the Arizona-based manufacturer and seller have shown substantial sales revenue year-over-year. The company has gone from $1.1 million in revenue in 2019 to $1.97 million in 2020. In addition, innovative CBD wellness products are set for growth as Jamaica reopens its borders since the slower days of the COVID-19 pandemic left an impact on the cruise industry to the island nation.
CLIS – Clickstream Corporation
The mobile app builder Clickstream Corporation (stock symbol, $CLIS) has red hot share prices under $1, but they may not stay there for long. The HeyPal app from the company’s subsidiary Nebula Software just saw downloads pass 367k at the top of Q4 in 2021. The language learning app focuses on exchanging language between users for a more immersive experience. In addition, the app saw an Android launch, which means users of more than 70% of the world’s smartphones have access to the app.
IQST – iQSTEL Inc.
iQSTEL Inc. (stock symbol: $IQST) is a company with a bright future ahead. If the CEO’s letter to shareholders indicates what’s on the horizon, this telecom and tech services provider may be COVID-19 proof! Providing connectivity to electric vehicles, IoT solutions, and Fintech means the demand has never been hotter. Profitability is a priority for this group. They have shown resilience through a Q3 loss of only $111k. 2021s revenue forecast has shown an increase of 4% to $63 million, up from $60.5 million.
MSPC – Metrospaces Inc
Miami proptech company Metrospaces Inc. (stock symbol: $MSPC) has appointed seasoned entrepreneur Thomas Carter to the Board of Advisors, alongside successful CEO, Oscar Brito. The Deal Box founder notes an outstanding opportunity to pair blockchain technology and real estate through Metrospaces transition into the proptech space. After an October ’21 announcement of Shokwork’s significant acquisition of a minority equity position, Metrospaces has since made its first residential property acquisition.
BBBT – Black Bird Biotech
Black Bird Biotech (stock symbol, $BBBT) aims to reimagine biotech solutions. Revolutionizing natural farming with plant-based pesticides positions the Texas company to address lethal pests that ravage grape crops, coffee, and the budding cannabis industry. Their MiteXstream product also eliminates molds and mildews.
As the company expands its presence in the national landscape they are navigating FDA approvals on a state-by-state basis. Black Bird Biotech is the only food-grade plant-based pesticide on the market, so competition in the agricultural space is sure to heat up as their products come on stream in more spaces.
SFLM – SFL Maven
Once called the “Amazon of collectibles,” SFL Maven (stock symbol, $SFLM) has an emerging NFT strategy that is exciting plenty of prospective and current investors. Growing from their foundation into the digital landscape has shown the NFT space as the natural progression. Small-batch local artwork Is at the heart of their approach to rapidly build out this new segment.
CLNV – Clean Vision Corp
(Stock symbol, $CLNV) The August ’21 announcement of a filing for the Clean Vision Corps Global Plastic Conversion Network patent is only the tip of the iceberg. This US headquartered holding company recognizes that sustainable green tech and green energy business are fixtures of the future economy. Additionally, there is a growing 8.3 billion tons of plastic waste globally. Addressing an increasing challenge with modern solutions means this stock has the potential to generate lasting value.
The Impending Breakout
Companies that have consistently managed a positive cash flow and remain profitable are well-oiled machines. Addressing future challenges and delivering to shareholders is possible when the value of the products and services is established among the ideal client base.
It is not all a love story on the OTC Markets. Investors have found there to be volatility in companies financing debt in ways that would later lead to dilution from the companies into the marketplace. However, there have still been opportunities to make dreams for intelligent investors with greater transparency.
A strong buy will continue to mature and position itself for a breakout. A run to the NASDAQ, NYSE, and global markets is a genuine possibility. However, due diligence and plenty of homework are crucial in the OTC Markets. Companies that do not provide a Form 10 filing with the SEC do not lend themselves to the highest degree of transparency. Knowing which stocks are diamonds in the rough and which are better left alone is the difference between dipping into the red or maximizing your green.
While there are options to turn handsome profits, there are still things to consider carefully. Digging into the financials available for the companies you are interested in buying goes a long way. In addition, knowing how to spot the potential for dilution matters since low information around a company can lead to poor liquidity. While the Financial Industry Regulating Authority regulates the market, it is not obligated to provide financial sheets for its investors.
Get acquainted with the stocks and be sure that they are consistent with your risk/reward requirements and that the purchase is not purely emotional.
Every investor ought to complete their due diligence. These companies have been vetted as opportunities to buy affordable stock, but your risk appetite matters greatly. Patience and proper analysis go much further than getting rich fast opportunities. Remain a part of this conversation by staying updated on our future dives into the OTC Market.
DISCLAIMER: This article is strictly the author’s opinion. all stocks involve risks and the possibility of losing all of your investment. please consider all risks before investing and consult with an investment advisor if you lack experience. article provided in part by strategic innovations who are paid for by the companies for social media and research.