UnThreaded | Threaded | Whole Thread (90) | Ignore Thread Prev | Next
Author: TopLineFirst One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 264724  
Subject: Re: New screen - votes needed Date: 2/10/2013 1:22 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I don't see a real problem there. For any given company, a large number of relatively low-price shares is not obviously inferior to a small number of higher-price shares. Obviously having more shares will also decrease FCFPS, but it won't alter the ratio.

I agree. Reflecting on Elan’s response and your response, I realize that I was attempting to find a rational to support a pre-existing bias in spite of the backtester results. (No form points on that dive.) The other criteria in the screen keep one far removed from the penny stock considerations I brought up (and described poorly).

A better reason for favoring a minimum price in certain screens is a bit of self-fulfilling investor psychology. Historically investors have preferred stocks above $10 per share, and the option-availability rules and delisting rules are derived from that preference. Companies occasionally like to do a second public offering, and company executives typically hold a chunk of shares, so they like to keep their share price up in the preferred range. A company that can't do so is in some way a higher risk, either a young and unproven company or an older company in trouble... thus justifying the preference that started the cycle.

Great points. Thanks. I really appreciate your input. TLF
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (90) | Ignore Thread Prev | Next


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.