I believe that stock market prices in the long run are a function of shareholder earnings. But in the short run they are dictated by market forces, notably supply and demand. One of the easiest ways to capitalize on the short-run market forces is to find situations where larger investors look to what previously was mostly owned by smaller investors. One of the better ways I've found to do this is when companies uplist from the OTC/Pink Sheets to the major exchanges such as
New York Stock Exchange
and American Stock Exchange.
New Energy Systems
just crossed on the AMEX from the OTC. For those who have been following the story, it's about time, right? Who is on deck to follow New Energy? Let me revise that question: Who is cheap and on deck?
is looking to score a coveted Nasdaq listing, up from where it currently trades on the OTCBB. The company recently initiated a conversion program that enables investors to convert their warrants into common shares.
Gold Horse International
is a company I've been following for a few years now. The market cap is $7 million, which is embarrassing. My calculations put it at levels of cheapness that I'd rather not talk about, because I'm happily accumulating on the bid. Gold Horse is reverse splitting 40-1 and looking to uplist to the AMEX.
is working with JPMorgan, recently authorized a share buyback, and is theoretically bringing a blockbuster drug to market. From a pricing standpoint, the market is pricing China Medicine as if to say, "We don't believe you!" I'll go out on a limb and say that uplisting is even closer since the company has added three new directors.
China Infrastructure Construction
is looking to go to Nasdaq from the OTCBB. Likely? I think so.
is looking to do the same.
One thing you should know is that both CHNC and ENHD received assistance in coming public on U.S. exchanges from
, which is pretty much owned and run by Jim Bickel. As such, if one makes the leap, odds of the next one making the same leap are pretty good.
Let me close by discussing a topic that I know a lot of people reading this article are waging internal battles over. Should they trade or own? I want to say that the market trains people to be traders -- to get in and out with a small, quick profit. My word of caution would be that I believe that this strategy could leave you missing large runs as I've found that a majority of my gains come from a few stocks that exploded several times from the price I bought in at.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider the stocks mentioned in this article to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Bradford had holdings in all the companies mentioned
This commentary comes from an independent investor or market observer as part of TheStreet?s guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.