Investing in Business with More Potential Than Penny Stocks

Investing in Business with More Potential Than Penny Stocks

You may want to start avoiding low prices and focus more on businesses with legitimate potentials.

Penny Stocks is attracting many investors. It is because you can purchase plenty of shares with a small cash outlay. Also, if the shares you bought increased, a rise of a little dollar amount turns in no small percentage. As a result, penny stocks lures a lot less sophisticated investors.

But even though it is indeed tempting, most of these stocks worth lower than the actual price during the trading. However, there are better buys in the market than the typical penny stocks.

Chinese Stocks

Investing in Chinese assets seems to be a little out of the choices right now. And this may be true because of the arising complications from unresolved trade disputes with the United States, which might affect the performance of otherwise bright companies in China. But on the other hand, even with all the trade issues and stuff, Baozun appears significantly less unsafe compared to most penny stocks. And at the same time, it still offers quite substantial upside.

The business of Baozun rotates around giving customizable e-commerce websites and support services for major Western brands which seek to develop their presence in China's online retail market. But this position comes with bizarre dangers. For instance, some risks are from escalating trade disputes.

On the other hand, the firm still appears advantageous for investors who are brave enough to take the risk in pursuit of huge returns. Also, the company is different from other penny stocks because the business already has stable profits, and its trades are earning multiples. Aside from that, the stock's price is almost 34 times higher than the expected earnings this year. And still, it presents commendable outputs despite the trade dispute and some slowdown in the economic growth of China.

Last quarter, Baozun achieved a sales increase of about 40% year over year. Also, its operating income rose 61% against the prior-year period. The field of e-commerce will only continue to develop. And China became the world's largest e-commerce market by a wide margin.

Above all, when investing in Baozun, you are likely to encounter some bumps. But it grants exceptional prospects compared to penny stocks, plus it can deliver excellent long-term growth.

Penny Stocks

Penny stocks usually trade for, guess what, pennies. And they attract investors who believe they can make a lot by buying lots of shares for just a small amount of dollars.

Now, the dilemma with that way of reasoning is that stock is cheap to produce. All it takes is a vote by the board of directors and some filing of paperwork if the shares are publicly issued.

On the other hand, Berkshire Hathaway's Class A stock trades as high as $355,900 per share, let me repeat, per share in the past 12 months. And penny stocks won't even go that far.

So next time you think of investing in stocks, you might want one to consider the outcomes rather than purchasing just because it costs less.

   

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