By Matt McCallApr 18, 2019
It’s rare for me to say that more regulations are a good thing. But they are when it comes to the big opportunity in Jumper Stocks that we’re focusing on this week.
They have to do with the stringent requirements to list on the NASDAQ and NYSE. They’re a big reason why all these companies want to get onto the major exchanges — to show that they can measure up.
It’s kind of like when a food product earns the “USDA Organic” label. Many grocery shoppers are just looking for that familiar green logo, and it stands out.
Similarly, when a stock uplists to a major exchange, investors of all sizes have more confidence, because they know the stocks have met certain criteria.
For example, to list on the NYSE, a company must be valued at $100 million or more with a minimum share price of $4, monthly trading volume of at least 100,000 shares, and 1.1 million shares held on the public market.
There are financial minimums, as well.
If a company can meet the NYSE’s “Earnings Test” or its “Global Market Capitalization Test,” it’s good to go.
1. In the first instance, the Jumper Stock must be able to produce positive earnings. Specifically, it must do so for the previous three years (each year), totaling at least $10 million. And the two most recent years must have at least $2 million in earnings.
When a company’s just getting off the ground, it often plows all its revenues back into building the business. So, the Earnings Test rules out a lot of these up-and-comers.
Luckily for them, they can skip that if they pass the other test:
2. Alternatively, the company can still uplist if it goes at least 90 days with a market cap of $200+ million.
Corporate governance must also be met. Basically, the company can’t just cater to shareholders and/or executives. It has to balance their needs with those of other stakeholders — like customers, suppliers, and yes, the government.
That includes things like having a majority independent board, and letting the public see its financials by filing an Annual Report with the SEC.
I mention all these requirements because meeting them provides a lot of validity to a business. So, executives of a company trading on the smaller exchanges (like the OTC) have plenty of incentive to reach them.
That may be doubly true for marijuana, which some people are deeply prejudiced against. When pot stocks make it into the mainstream, you can bet they worked twice as hard to get there.
Speaking of requirements…
I don’t just wait around until after a Jumper Stock makes it onto the NYSE or NASDAQ.
As I’ve demonstrated, you make the majority of the gains by buying into great companies before this game-changing event.
Now, as an early stage investor, you don’t want to get caught up in the hype when it is unwarranted. You have to reject a majority of the opportunities that present themselves. You’re looking for the diamond in the rough.
So, how do you find it? With a logical, objective, well-researched approach to picking the stocks.
I spent months developing criteria that any potential Jumper Stock must meet before I recommend it in Early Stage Investor.
For one thing, the stock has to show positive momentum. And what most people don’t realize is that you can’t just gauge that by looking at the price. You’ve got to look at volume, too.
The volume trend is a very important technical indicator. Take the number of shares that trade hands on a given day, average it out, and chart that data over the last 50 trading days.
If the trend line is increasing, it shows that more investors are piling in. The opposite is also true.
I talk a lot about Charlotte’s Web (CWBHF), which I fully expect to become a Jumper Stock and one of the Best Stocks of 2019. It’s also an example of the volume trend I like to see.
April has been a tough month for many cannabis stocks, thanks to weakness in big names like Tilray (TLRY) and Aurora Cannabis (ACB).
But on this chart, you can see the positive overall trend in Charlotte’s Web’s volume that’s been building for quite some time.
Charlotte’s Web is a very different company, with its focus on cannabidiol (CBD) oil derived from hemp. Now that the 2018 U.S. Farm Bill legalized hemp, the sky is the limit, as the company is a leading producer of high-grade CBD.
There’s another potential Jumper Stock that I alerted folks to in my presentation last Tuesday.
I see so much potential here that I’m giving away this pick for free.
You can also get a play-by-play of my Jumper Stock System by clicking here now.
P.S. If you’d like to get a better sense of the opportunity here before you buy…
I don’t blame you.
I get questions from people all the time: Why invest before it’s legalized federally? Or is it already too late — and I’ve missed the boat?
So, I just sat down with my Managing Editor Dave Gilbert to address your biggest questions and concerns.
It’s a quick Q&A that you can watch at this link.
You’ll walk away with a deeper understanding of this incredible opportunity and how my system really works.
Plus, I reveal a special development my publisher has agreed to for anyone who wants to dip their toes in the water. (I honestly can’t believe he’s agreed to let me do this.)
Again, you can watch this short, informative Q&A by clicking here.
Note: This is Part 4 of a series on the opportunity in pot Jumper Stocks. Click here to read Part 5 now.
Self-driving cars – aka “autonomous vehicles” (AVs) – represent one of the biggest investment opportunities of the next 25 years. This innovation will transform huge portions of our economy and create trillion dollar ripple effects through time. It will create huge new winners in short periods of time. It will demolish losers in equally short periods of time. It’s critical that you stay on the right side of this trend. Learn more here.
Marijuana has been outlawed most everywhere for decades… but now a wave of legalization is starting to sweep the world. This will create massive new markets and massive stock market winners. Learn more here.
If I had to make one bet for 2019 it would be that betting is going to be big. The Supreme Court’s May 14 ruling cleared the way for states to allow sports gambling. And in my 25 years of investing experience, I honestly cannot remember many things that come close to magnitude of the investing opportunity that opened up to us. Massive amounts of money are involved in sports betting, and I expect massive amounts of money will be made, too. Learn more here.
Don't miss out on the incredible megatrends that are shaping today's market. Gain access to the most powerful market insights and stock advice from Matt McCall absolutely FREE. Join Today!