This article talks about how some stocks can go up very fast and make people money quickly, but sometimes they can also lose value. The writer suggests looking for stocks that are going up fast but still have a low price, so you can buy them and maybe make more money later. They give an example of a company called Americas Gold and Silver Corporation, which has been going up in price recently and might be a good choice to invest in. Read from source...
1. The title of the article is misleading and exaggerated. It implies that investing in fast-paced momentum stocks like Americas Gold and Silver Corporation (USAS) is a surefire way to make far more money in lesser time, without considering the potential risks and drawbacks involved.
2. The article contradicts itself by acknowledging that determining the right entry point for momentum stocks isn't easy, but then it suggests investing in bargain stocks with recent price momentum as a safer approach. This is not necessarily true, as bargain stocks may also have limited growth potential or other issues that prevent them from reaching their fair value.
3. The article relies on the Zacks Momentum Style Score and the Fast-Paced Momentum at a Bargain screen as the main sources of information and validation for its investment thesis, without explaining how these metrics are calculated or how they measure the momentum strength and sustainability of a stock. These scores may not capture other important factors that affect a stock's performance, such as valuation, earnings quality, profitability, etc.
4. The article selectively focuses on the positive aspects of USAS, such as its recent price increase, 12-week price gain, beta value, and momentum score, without providing any context or comparison with other similar stocks in the same sector or industry. It also ignores some of the negative factors that may impact USAS's future performance, such as its high debt level, low profit margin, high short interest, etc.
Based on the information provided, I would suggest the following investment strategy for Americas Gold and Silver Corporation:
1. Buy the stock at its current market price of around $2.50 per share.
2. Set a stop-loss order at 10% below the entry point, which is $2.25 per share. This will limit your potential loss in case the stock price drops significantly.
3. Set a take-profit order at 20% above the entry point, which is $3 per share. This will lock in your profits once the stock reaches a certain level of appreciation.
4. Monitor the stock's performance regularly and adjust your stop-loss and take-profit orders accordingly based on the market conditions and the stock's momentum.