Pink Sheets Stock Exchange is a Treasure Chest of Cheap Stocks
The Pink Sheets Stock Exchange, unlike the NASDAQ or the OTC, is not an actual stock exchange. Rather, the Pink Sheets Stock Exchange refers to an electronic quotation system which broker-dealers use to display buy and sell quotes. The Pink Sheets Stock Exchange started as a daily quote service from the National Quotation Bureau. The quotes used to be printed on pink paper, and that is why they’re called “Pink Sheets” today.
Companies that are too small to be listed on one of the big exchanges can be listed on the Pink Sheets Stock Exchange. The reporting requirements are less expensive and less convoluted for Pink Sheets companies. Companies who are listed on the major exchanges had to list their shares as a traditional American depositary receipt/share (ADR or ADS) after Sarbanes-Oxley. The Pink Sheets Stock Exchange doesn’t require this information, although they encourage their companies to do so.
The Pink Sheets Stock Exchange has something of a “Wild West” reputation because it has fewer requirements for listing. Investors are warned that investing in the “Pinksheets” is dangerous, and that the stocks are shaky, cheap, unknown companies with shady histories.
In truth, a company may have many reasons for choosing to list itself on the Pink Sheets Stock Exchange. They may not want to list an ADR, with the hassle and expense of doing so. A company’s unwillingness to list an ADR is a not necessarily a sign that it’s weak or shady, and investors shouldn’t jump to that conclusion.
To toss out all Pink Sheets listings, based on this rumor, is the same as throwing out the baby along with the bathwater. Many of the companies on the Pink Sheet Stock Exchange are solid and financially fit, and investors are pleasantly surprised to discover some well-known names here.
In fact, some of the companies on the Pink Sheet Stock Exchange include, for example, powerhouse foreign companies such as Nestle, S.A, or BMW Group.
Pink Sheets (also sometimes called “pinksheets”) can represent some of the best profit opportunities for investors. Many of the stocks on the Pink Sheet Stock Exchange are usually undervalued, and mostly overlooked by Wall Street, because they are small, which creates some excellent buys for investors.
Covering the Pink Sheets Stock Exchange is just one of the ways we help you find some of the best undiscovered cheap stocks. Sign up on the right to subscribe and you’ll be among the first to get alerts on the most promising cheap stocks on the Pink Sheets Stock Exchange.