Stock Market - What are junk stocks

Question

I'm not going to invest in them I was just curious about junk stocks ? what are they? I'm new and trying to learn about the stock market

Answer 1

Those selling below a certain price--one dollar.

Answer 2

Although there is no "junk" term for stocks that's commonly used.  Some analysts and traders consider stocks that have very bad financial and poor value as "junk".

Nonetheless, the investing value of 'junk" is always reflected in the market price,  The lower the market price, the closer to junk stock become

If you want to learn to invest get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance.  (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why.  This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are

Investopedia - http://www.investopedia.com/  Stock Charts - http://stockcharts.com/

http://www.investorshub.com/  http://www.1source4stocks.com/



Visit some of the more professional websites like Zacks - http://www.zacks.com/

Smart Money - http://www.smartmoney.com/  Schaeffer’s – http://www.schaeffersresearch.com/

Some of these web sites will have advertisers who are worth looking into also.  And remember, if they offer free information, get it.

Answer 3

Some of the largest profits are made on "junk stocks".  With gains also come the risk of large losses.  

Answer 4

Below a dollar and generally not listed on a major exchange.

Answer 5

Actually, the term "junk stocks" is not not an official or commonly recognized investor or Wall Street term. I have seen the phrase in some blogs, ads, and in a couple publications to sell magazines, but by Wall Street's view, there is no official definition.

There are "junk bonds." - "A bond rated 'BB' or lower because of its high default risk."

http://www.investopedia.com/terms/j/junk...

There are "penny stocks." - "a common stock that trades for less than $5 a share and are traded over the counter (OTC) through quotation services such as the OTCBB or the Pink Sheets."

http://en.wikipedia.org/wiki/Penny_stock

But no official definition for "junk stocks."

I think what the bloggers are are saying is that these stocks once had a higher valuation, and now they have a much lower valuation.

This would not imply they are "junk" or a bargain. This means the previous valuation was incorrect, and the market has repriced the stock(s) to the perceived correct current valuation.

I would be careful about a blog hyping up some "junk" stock. The blogger probably has a position in it, paid more than what it is currently worth, and is trying to get other people to buy it in hope to push the stock up.

The blogger is then trying to influence the market which is silly because The Street doesn't follow bloggers as part of the investment or trading strategy.