It's safe to say that anything that seems to be too good to be true probably isn't, but that doesn't stop scam artists from trying out their ploys on unsuspecting cell phone users. Many more people are finding unsolicited text messages on their phones, offering stock tips that will make them rich, but are these messages really designed to help the phone user out?
While email messaging can be filtered with junk mail filters, text messaging isn't able to do so. Scam artists are finding this mode of communication most effective in getting their scam to someone who might think that it's well-intentioned. Because the cell phone user believes that their number can only be used by those that they have sanctioned, they initially believe that the information is coming from a truthful source.
The scam is known as the ?pump and dump? whereby the scam artist gives the victim misleading information about a stock (this is the pump part). When enough people have taken this information and used it, the demand for the stock then goes up and thus so does the price. The scam artists will then sell the shares that they purchased in this same company, lessening the price and leaving the victims with worthless stocks.
A stock tip scam is easily identified when a person takes the time to use their common sense. If a person should receive a tip about a stock that will rise in price and value significantly, that may be an indication of a scam. The text message may also include a low priced stock (often fifty cents or less) that can be more easily targeted. These identifiers along with a pressure filled message and approach are almost definite signs of a scam on stocks.?
It's always smart not to take the advice of anyone that you have not requested information from. Unsolicited advice is something that can be misleading in an attempt to fraud the recipient of the message. ? While it might seem simple enough to ignore the message, a person can also report the source in order to possibly stop the text messages to everyone else. These messages can be forwarded to the NASD via email. Other possible ways to block the transmission of such messages is via the government's Do Not Call list. More than one number can be registered so long as the person has a working email address.
Some text messages may include options to opt out of further messages, so a person can also complete those forms to be left out of the next round of stock tips. Other people find that avoiding chances to opt into third party offers on websites that they have visited is a great way to cut back on the unsolicited messages. Leaving a false phone number is another way to avoid receiving these kinds of annoyances.
There are laws that are in place to prohibit this kind of scam, but vigilance is the best defense as is using common sense.
In publications such as Investors Business Daily there are typically several pages devoted to software programs and web sites that promise hot picks for quick trades.
Obviously, if all of these so-called hot stock picks were as hot as their pervaders proport, then they wouldn't need to hock them in cheesy commercials. Most of these systems and programs promise easy money, but sensible people know that nothing comes easy on Wall Street.
Instead of promising a foolproof system for chart-based trades, this article delivers truly hot picks for 2007 and beyond, based on the actual business fundamentals of the underlying companies.
A word of caution about these hot stock picks: These hot picks are solely for entertainment purposes. I mention these stocks only to offer my own thoughts and opinions, and to perhaps spark some ideas.
I am not recommending that you buy these hot stock picks without first doing substantial research and then discussing them with your financial advisor.
With that out of the way, on to the hot picks. I have broken the stocks into two groups:
Hot stock picks for companies with substantial opportunity for growth, and hot picks for companies with share prices that have recently been beaten down and may now be undervalued.
Hot Stock Picks: Growth
My hot stock picks for growth companies are EZCorp (EZPW) and Paychex (PAYX).
EZCorp is an amazing, unheard of company that has been on a path of torrid growth. The firm operates pawn shops and payday loan centers under the names EZPawn and EZMoney, respectively. Currently, the company has over 500 stores in 13 states, with plans to establish another 125 locations in the works.
What I love about this company is that its business model allows it to do well in good times and in bad. In 2005, it loaned close to $600 million to cash and credit constrained customers, and the company's earnings per share (EPS) has more than quintupled in the past four years.
With a recent P/E ratio of just 25, the price hasn't kept up with the growth of this, the first of my hot picks.
The second of my hot stock picks in the growth arena is Paychex. This is another unknown, but it shouldn't be. Paychex is the nation's second largest payroll processing firm, next to Automatic Data Processing.
It has recorded fifteen consecutive years of record profits, and it continues to diversify its business model in order to accelerate growth. Recently, it moved into benefits and human resources management. Another thing I like about this firm is that it has the small business market cornered, and has erected substantial barriers to entry for would-be competitors.
Hot Stock Picks: Value
Microsoft (MSFT) and Intel (INTC) need no introduction. They have both been beaten down badly in recent times and may have nowhere to go but up.
Microsoft's Vista operating system should be a great catalyst, and after that, the firm has room to grow in the telephony industry.
Intel has suffered from intensifying competition with rival AMD, but it certainly has the resources to engineer a turnaround. Since most Windows-based machines run with Intel chips, Vista will also be a great catalyst for Intel.
Some would scoff at the characterization of such mega firms as Microsoft and Intel as hot picks, but the fact is that people have lost their senses when it comes to these great American companies, and they are just too cheap to ignore.
Growth companies should be bought each time they reach new highs, but beaten down value stocks like Microsoft and Intel, with solid business fundamentals and great brand names and products, should be purchased on dips.
Both Joel Arberman & William Smith are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Joel Arberman has sinced written about articles on various topics from Bird Flu, Initial Public Offering and Investments. Joel Arberman is the Managing Member of Stock Aware, LLC. We publish a free investment research and analysis newsletter. Learn more at. Joel Arberman's top article generates over 27100 views. to your Favourites.
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